How this calculator works
The cost of smoking is simply the number of packs multiplied by the price, and quitting turns that cost into a saving. Convert cigarettes per day into packs per day by dividing by the pack size, multiply by the pack price for a daily figure, then by 365 for a year. Over several years the savings add up, but money left in a jar does nothing. The second figure shows what the same monthly amount would grow to if it were invested at a steady return, using monthly compounding. That number is a planning illustration, not a guarantee: investment returns vary and can be negative in some years.
Formula
packs per day = cigarettes per day / pack size. saving per year = packs per day x pack price x 365. saving over the period = yearly saving x years. future value = monthly saving x ((1 + rate/12)^months - 1) / (rate/12).
Worked example
Twenty cigarettes a day from a pack of 25 at $18 is 0.8 packs a day, or $14.40 a day and $5,256 a year. Over ten years that is $52,560. Invested at 3 percent a year with monthly compounding, the same $438 a month grows to about $61,207.
Advertisement
Frequently asked questions
Does the price per pack include tax?
Enter the price you actually pay at the counter, which already includes tobacco tax. That is the amount your bank account gains each time you do not buy a pack.
Why is the invested figure higher than the money saved?
Because of compounding. Each month the savings earn a little interest, and that interest earns interest in later months. Over ten years at 3 percent the difference is a few thousand dollars, not a doubling.
What return should I use?
A conservative planning figure is the long-run return on a balanced portfolio after fees, often quoted around 5 percent before inflation. Using a lower number gives a safer estimate; using zero shows the raw savings.
Should I include other costs of smoking?
This page covers cigarettes only. Lighters, higher insurance premiums, cleaning and health costs are separate, so the true saving is usually larger than the figure here.