Kip Tips


Two Costly Habits to Quit

Cameron Huddleston

New taxes on tanning and cigarettes are another reason to give up these habits.



I recently saw a billboard ad that said, "I'll stop smoking when cigarettes cost ..." I'm wondering if some New Yorkers are ready to quit given the news July 21 that the state will have the highest cigarette tax in the nation. A new law adds another $1.60 in taxes to each pack of cigarettes sold starting July 1 -- bringing the average cost of a pack to $9.20 across the state and $11 in New York City, according to the New York Times.

ELEVEN DOLLARS! If you had a pack-a-day habit, you would pay more than $4,000 a year to get your daily fix. Just think of all the other ways you could spend (or save) that money: to pay down debt, to start an emergency fund, to contribute to a Roth IRA, to buy a used car, to open a 529 college-savings plan for your child.

I know, I know -- you're thinking, "Spare me the lecture." Kiplinger's is not here to tell you what is good -- or not good -- for your health. But we are here to help you save money and must point out all the ways that your habit takes money out of your pocket. So let me throw out a few more figures.

Smoking significantly increases the cost of life insurance. For example, a 40-year-old smoker pays triple the rate of a non-smoker. The best way to cut your rate is to stop smoking for a year or more. Some companies require you to be smoke-free for three or five years to get their best rate (see Get the Best Rate on Life Insurance).

Advertisement

You'll pay several hundred dollars more a year for health insurance -- and health care. (Go to eHealthInsurance.com to get quotes for smokers versus non-smokers.) You'll pay more for homeowners insurance: Non-smokers typically get a 10% discount on their premiums. Many auto insurers also offer a discount (up to 5%) to non-smokers. Add in various other expenses and the true cost of smoking adds up dramatically over a lifetime -- $86,000 for a 24-year-old woman over a lifetime and $183,000 for a 24-year-old man over a lifetime, according to The Price of Smoking (The MIT Press).

Tanning to get more expensive, too

A new tax on another cancer-causing product also takes effect July 1 -- a 10% levy on indoor tanning services. So instead of paying, say, $90 for a package of visits to the tanning salon, you'll now pay $99. As with cigarettes, the true cost of tanning -- which the World Health Organization lists among the worst-know carcinogens -- is higher than just the price you pay each time you go to the salon. So spare your skin and save some money by avoiding tanning beds.



Editor's Picks From Kiplinger


You can get valuable updates like Kip Tips from Kiplinger sent directly to your e-mail. Simply enter your e-mail address and click "sign up."

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement

Market Update

Advertisement

Featured Videos From Kiplinger