How Does Tobacco Use Negatively Impact Personal Finances?

How Does Tobacco Use Negatively Impact Personal Finances?

So just how does tobacco use negatively impact personal finances?

To answer that, think about this: Would an extra $300 or so each month help your cash-strapped employees?

It’s possible to add sizable dollars like this to their wallets when you help them quit tobacco.

We see EX Program participants regularly share stories of the financial benefits of not smoking.

For example, one participant used EX to quit her two-pack-a-day nicotine addiction. She saved $21,000 in 1,000 days since her last cigarette and applied those savings to buy a new home.

Another EX participant banked $500 in 50 days by not buying cigarettes. He is stashing away these growing savings to buy a new car since his current one is on its last leg.

At a time when many workers are emerging from the pandemic in a state of financial strain, HR leaders are looking to financial wellness solutions to fill the gap. Helping employees quit tobacco is an important way that you can strengthen workforce financial wellness.

Negative financial effects of smoking cigarettes

With layoffs, reduced hours, costly medical bills, and the accumulation of unpaid rent and mortgages in the wake of COVID-19, employees are more concerned than ever about their current and future financial states.

According to a 2021 financial wellness survey from PwC, almost two-thirds of employees said their financial stress has increased since the start of the pandemic. Survey respondents who reported that their financial strain had escalated were nearly 4 times as likely to admit their finances have been a distraction at work.

But one component that doesn’t often come to mind with financial health is helping employees reduce their out-of-pocket spending. When an individual quits tobacco, these potential savings include zero or reduced spending on:

  • Tobacco. Due to taxes, the cost of cigarettes varies per state, but it’s still a significant expense. The highest per-pack cost in New York at $10.45, so if a smoker has a pack-a-day addiction, that’s $313.50 per month. Even at an average per-pack rate that’s lower, employees will still be saving thousands of dollars yearly by quitting.

Table illustrating the top 10 states for annual savings when quitting a pack of cigarettes per day the savings when quitting a pack of cigarettes per day

  • Healthcare. Smoking harms nearly every organ in the body, resulting in higher healthcare expenses for smokers. The laundry list of costly health issues that tobacco use can cause include heart disease, COPD, diabetes, and lung cancer.

Annual healthcare costs directly caused by smoking in each state (paid in part by employees and employers) NY: $10.39 billion, PA: $6.38 billion, OH: $5.64 billion, MI: $4.59 billion, MA: $4.08 billion, VA: $3.11 billion, MO: $3.03 billion, IN: $2.93 billion, CT: $2.03 billion, OK: $1.62 billion

Source: The Toll of Tobacco in the United States

Once a person quits smoking, health improvements happen quickly. Minutes after the last cigarette, their heart rate slows. The risk of a heart attack drops sharply in 1 to 2 years after quitting. After 5 to 10 years, stroke risk decreases, and the risk of developing mouth or throat cancer drops in half.

  • Less obvious expenses. So how does tobacco use negatively impact personal finances? The costs of buying tobacco and healthcare expenses for using tobacco are well-known. However, some expenses tobacco users pay may be under-the-radar and add up to a financial hit over time. People who smoke also pay less obvious costs such as:

Lower resale value of their property. Smoking can cut a resale property value by up to 29%.

Increased dental bills due to higher incidence of gum disease and tooth loss. People who smoke are 3 times more likely to lose all their teeth. The price per dental implant to replace a lost tooth normally runs between $3,000 and $4,500.

Higher premiums for life insurance. Life insurance rates for smokers can easily be double or triple a non-smoking rate.


Campaign for Cash In On Quitting

We know from experience that highlighting the dollars saved by living tobacco-free can be a powerful motivator to boost financial wellness—and engagement in a quit-tobacco program.

For our client Montgomery County Alcohol, Drug Addiction and Mental Health Services (ADAMHS) in Ohio, for example, we created a custom campaign with billboards, a radio spot, social posts, emails, and other assets that solely focused on the financial benefits of quitting to residents.

Dubbed the “Cash In On Quitting” campaign, the client saw over 3 times the amount of expected registrants in the 2-month campaign.

While the campaign impact is impressive, it’s the participants like this one who really bring to life the reasons we do what we do.

financial benefits of not smoking

See our case study to learn more about the “Cash In On Quitting” campaign.

Financial benefits of not smoking

Financial wellness, like tobacco cessation, will remain a crucial part of employee health long after the pandemic has passed. But now is the time to address the topic and alleviate the financial strain felt by many who are trying to quit tobacco.

To see how the EX Program can help your employees improve financial wellness by quitting tobacco, please contact us to see a demo today.

Jessie Saul, Ph.D.
Jessie Saul, Ph.D.

Director, Strategic Insights

Dr. Jessie Saul brings 19 years of experience in research, program evaluation, and strategic implementation around tobacco cessation. She applies this deep understanding to improve EX Program performance and reduce tobacco use among populations. She earned her Ph.D. in Science and Technology Studies from Cornell University.

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