Up In Smoke – Counting the Financial Cost of Smoking

We’re a lucky mob, here in Australia. We’re blessed with a free society and a standard of living that rates up there with pretty much anywhere in the world. Having said that, the reality is that many of us have seen our disposable income slowly whittled away over time. The cost of living has been rising steadily, and wages growth has struggled to keep up. Plenty of people on what would have been considered a decent wicket only ten years ago can find that they’re struggling to make their pay packet stretch through until the end of the month.

The media are quick to point the finger at the usual line up of economic boogeymen to blame for all our fiscal woes: rising electricity costs, petrol prices, skyrocketing rents and the list goes on. We can’t control the economy, or what we pay per kilowatt-hour or litre at the pump. However, that doesn’t mean we’re powerless. By looking at our own spending habits, many of us can likely find areas in which we can make significant saving and ease some of that cash flow pressure.

In a recent blog post, we looked at how the rise in gambling is costing the nation untold billions that many can scarcely afford. This time, we’re going to investigate the impact that tobacco is having on our budgets. We’re not here to lecture anyone about the negative effects of smoking on your health. There’s plenty of advertising and awareness out there already. However, Speckle is committed to helping people achieve financial security and independence. So if you or someone close to you enjoys a smoke, we thought we’d arm you with some financial facts to consider:

The Growing Cost of Smoking

It’s no secret that Australia has some of the most expensive cigarettes in the galaxy. Currently, the average pack of 25 durries is going to set you back around $30.00. Folks that is A LOT of money. So, how much do we, in fact, blow on the addictive leaf? Well, it turns out that collectively, we spend $13 per week on tobacco products. Ok, that’s not so bad, right? That’s less than $700 per year. Hardly the financial issue of the century…

Not so fast: that number applies to the average across the entire population. In a nation that’s just tipped the 25 million mark, that amounts to $325 million per year. The good news is that the number of smokers in this country has been declining steadily, and currently sits at 12.8%. The bad news is that if you or someone you know is one of that 12.8%, then your average share of that $325M amounts to $101.56 per week. That’s a whopping $5,281 per year. Now think about what could be done with that kind of money residing in the bank. That’s the equivalent of a new MacBook Pro and an iPhone X every year, and you’d still have a serious amount of change left over. How’s that for a sobering thought?

Let’s look at it another way: The average credit card balance for an adult in Australia is $3,260. If that sounds hauntingly familiar, the amount spent on a year’s supply of cigarettes could wipe that balance clear and have enough left over for a 10-day holiday in Bali; and that’s just in the first year! With one significant lifestyle change a stable financial life may be well within reach.

But wait, there’s more! 17.8% of smokers aged 18-44 and a staggering 30% of smokers aged 45 and over suck down a pack a day. At $30 a pop, that’s a dizzying $11,000 per annum that’s going up in smoke. Consider what $11,000 could do for the average Aussie family. Unfortunately, the most financially vulnerable in our society are grossly over-represented in the smoking ranks. It is precisely those people that can least afford it that are forking out this kind of money.

Cutting down on smoking will certainly help in the short term. However, the reason that cigarettes cost so much in Australia is that the tax man whacks a massive levy on tobacco to the tune of 80.726 cents per cigarette. This means that $20.18 of the cost of a pack of 25 goes to the government. If you think that’s bad, then bear in mind that the excise on tobacco automatically increases by 12.5% every single year. What does that mean? That $30 pack of cigarettes is going to cost $54 is 5 years’ time! At a pack a day that’s a scarcely fathomable $19,732 per year. Cut that habit by half, and by the end of 2023 a smoker will creep right back up to almost $10K, and growing.

With all this in mind, it is pretty clear that smoking is a financially unsustainable habit for the average person in Australia. Eliminating tobacco from your life, or helping a family member or mate to do so, may be one of the most effective tactics to get you or them back into the black.

Speckle was created to provide a safe and secure source of fast finance to people looking for an alternative to payday loans. Sure, it’s our job to provide small, quick online loans to people in need of short-term assistance. However, we’re not in this game to make an easy buck. Our primary objective, as part of the Good Shepherd Microfinance group, is to assist as many individuals and families as possible to achieve financial inclusion and economic stability. For this reason, we’d much rather that you never needed a Speckle loan in the first place. While it might not be the cure-all for everyone’s financial ills, eliminating cigarettes from your life will surely make a significant contribution to your wellbeing. If your efforts to get your head above water are not enough, then Speckle is here to offer fast cash loans of $200-$2000 to qualified applicants.

If you or someone you know needs help to quit smoking so you can feel better, be healthier and reap the financial benefits, then please contact Quitline today on 13 78 48.