Smoking 5 Cigarettes A Day Can Cost You A Crore
If the dreadful pictures on cigarette packs can't make you quit smoking, here's a more alarming warning.
Smoking burns a bigger hole in your finances than you can possibly imagine. A leading newspaper estimates that a 30-year-old who smokes five cigarettes a day would lose over Rs 1 crore due to the habit by the time he is 60.
As the world observes No-Tobacco Day on 31 May, we did some number crunching to find out the real cost a smoker pays. The biggest drain on the wallet is the price of cigarettes. Cigarettes are priced around Rs 10-15, but we have assumed a price of Rs 12 per stick. If a person smokes five cigarettes a day, he spends Rs 60 daily — or Rs 1,800 a month.
However, this is not a static cost.C igarette prices have risen by an average 20% every year in the past four years, and will keep rising every year as taxes on tobacco products go up. We have assumed a more conservative rise of 8% in cigarette prices per year. Extrapolated over a period of 30 years, the smoker will spend Rs 24.47 lakh on cigarettes. Now comes the interesting part. If the money spent on cigarettes was instead invested every month to earn 9% returns a year, it would grow to Rs 69.23 lakh in 30 years.
The next big cost is the higher medical expenses that smokers incur due to poor health. You don't need a medical expert to tell you that smoking leads to health problems. In its mildest form, smoking accentuates bronchial problems. But it can also lead to cancer and enhances the risk of heart attacks. We have assumed that a smoker will spend an average of Rs 400 a month on medical expenses. Again, this cost will keep rising. Medical inflation is very high compared to consumer inflation. Prices of drugs, doctor's consultation charges and diagnostic charges are rising at nearly 15%. Assuming a 12% rise in these costs per year, a smoker will spend Rs 11.59 lakh over a 30-year period. If this money was invested to earn 9% returns, it would grow to Rs 26.70 lakh in 30 years.