A Cigarette

This is the third installment of a monthly series that shows the effect small simple changes in our life can have on our finances. Last month, we looked at beer. This month, we’ll look at cancer on a stick… cigarettes.

It’s amazing how much money people spend on these things. I met a lady who smoked two and a half packs a day… TWO AND A HALF PACKS A DAY. Around where I live, smokes cost around $10 a pack. That works out to $750/month. That’s almost my rent. To be fair, most smokers I know smoke between a half to one pack per day.

Meet Ms. Chimney

Ms. Chimney really likes her smoke breaks, her coffee breaks, her lunch breaks and getting off work so she can sit on her patio and have a good smoke with a glass of wine. She averages about a pack a day. Let’s see what she could save if she slimmed her consumption by 25%. Let’s assume that the money she saves goes into an investment which yields an average 8% return.

The Results

A pack of cigarettes usually runs around $10. At a pack a day, that’s $300 a month. If Ms. Chimney saves 25% of that she’d be putting away $75 every month. Let’s see the numbers…

  • 10 years – $9000 contributed, $11,748 market value, $2748 earned
  • 20 years – $18,000 contributed, $31,253 market value, $13,253 earned
  • 30 years – $27,000 contributed, $63,634 market value, $36,634 earned
  • 40 years – $36,000 contributed, $117,394 market value, $81,394 earned

I don’t smoke personally, so I need to apologize beforehand since I have very little idea of how difficult this sort of change is. I suspect, however, that this is a great segue for someone who is already exploring the idea of quitting and/or wanting to save money.