If you’re looking for another reason to quit smoking, consider the cost of buying packs of cigarettes year after year.
And if those numbers don’t take your breath away, take a look at how your savings could potentially grow if you invested the money you’d otherwise spend on tobacco.
According to the Campaign for Tobacco-Free Kids, the average price of a pack of cigarettes in the U.S. was $6.16, including state sales and excise taxes in effect as of September 1, 2017. The state-by-state listing of prices and taxes on a pack of cigarettes shows large variations, with New York at the high end costing $10.44/pack (including state sales tax and excise tax of $4.75) and Virginia at the low end charging $5.04/pack (including state sales tax and excise tax of $0.55).
The table below extrapolates the cost of buying one pack of cigarettes each day over time. These figures are shown for the national average as well as for the highest-cost and lowest-cost states of New York and Virginia.
[Source of cost per pack: Campaign for Tobacco-Free Kids, STATE EXCISE AND SALES TAXES PER PACK OF CIGARETTES – TOTAL AMOUNTS & STATE RANKINGS, available here (includes all state sales and excise taxes in effect as of September 1, 2017).]
If a person were to quit smoking and invest the money s/he would have spent on cigarettes, the amount of wealth generated over the long term could be significant. The table below shows how much 30 years of monthly cigarette savings could potentially be worth if they were invested over time at various average rates of return, compounded monthly.
[Value of investing the savings from 1 pack/day for 30 years at different return rates, compounded monthly. Source of cost per pack: Campaign for Tobacco-Free Kids, STATE EXCISE AND SALES TAXES PER PACK OF CIGARETTES – TOTAL AMOUNTS & STATE RANKINGS, available here (includes all state sales and excise taxes in effect as of September 1, 2017).]
Due to the power of compounding, these figures could be even more astounding over a 40-year time frame (for example, if you quit smoking at age 25 and invest those savings until age 65).
[Value of investing the savings from 1 pack/day for 40 years at different return rates, compounded monthly. Source of cost per pack: Campaign for Tobacco-Free Kids, STATE EXCISE AND SALES TAXES PER PACK OF CIGARETTES – TOTAL AMOUNTS & STATE RANKINGS, available here (includes all state sales and excise taxes in effect as of September 1, 2017).]
Regardless of which state you live in or what your smoking habits are, these estimates will take your breath away. Even at a 4% return, the potential value of the invested savings over 40 years could be a nice chunk of change that could greatly help most people as they approach their retirement years (not to mention that giving up smoking will help them reach their retirement years in the first place). If the investments achieve returns at the high end over 40 years, the savings could range from just under a million dollars in Virginia to more than two million dollars in New York, both of which are more than a large percentage of Americans put away for retirement, period.
These figures send a clear message: if you don’t have money to burn (pun intended), you could save a lot of money and potentially increase your wealth (as well as your health) in a significant way if you quit smoking and invest your cigarette savings over time. Between your health and your wallet, it’s a win/win.
