Debt Free

It's true. Smoking is expensive, and the money saving aspects are one of the best reasons to quit smoking. When you're spending about $4.00 a gallon (soon to be more) for gas and an ear of corn is up to about .50, the last thing you need is another habit to siphon away your financial resources.

How much can you save by sending those Camels to the great ashtray in the sky? Well, simple math reveals that it's a heck of alot of money. If you're looking for reasons to quit smoking, you've just found another great one. Think about how much those little sticks of tobacco add up to. At around $5.50 a pack (more in some places, less in others, mostly predicated upon the local or state tax rates) a 3 pack a day smoker will spend $6,022 pretax dollars a year for the joy of sucking that smoke into their lungs.

$6,022 pretax dollars is a healthy chunk of change. If you're single and earning $50,000 a year your top marginal tax rate is 25%, and your average effective tax rate is about 17.7%. That means that everything you buy really costs 17.7% more than the sticker price. This is because because you have to earn that much more to actually have the purchase price in your pocket after you pay taxes (Federal taxes only, if you pay state income taxes you have to earn even more). So, if you're earning $50K a year, that $5.50 pack of cigarettes will really set you back about $6.47 each. If you'd taken those pretax dollars and invested them in an IRA instead of the profits of U.S. Tobacco, you'd have quite a nest egg by the time you retired.

For example, if you're 30 years old, earning the same $50K per year, and smoking 2 packs a day, you're spending $4,723 in after tax dollars on cigarettes every year. If you quit smoking and invest that amount, in an IRA earning 8%, it will grow to over $372,000 by the time you retire at 65. If you're a 3 pack a day smoker, sit down before you get sick. You're spending a hair over $7,000 in after tax dollars for smokes throughout the year. That amount will grow to about $560,000 by the time you're 65.

If you need reasons to quit smoking, think of this one; If you're still smoking at 65, you could be sitting there, bemoaning the size of your retirement account, or you could be heading out for a quick 9 at LaQuinta. It's up to you.