Are you still smoking? OMG! Are you living under a rock? That stuff will suck the life out of your savings!
No, I’m not a born-again evangelist for non-smoking. (I hate those guys.) I used to be a two-pack-a-day girl myself. When I quit I couldn’t believe how much money I had to do other stuff, like save.
If you’ve got a pack-a-day habit, and your 20-pack costs you $9, you’re sending $63 a week up in smoke. Over a year, that’s $3,276.
I’m not delusional enough to think you can cut back to nothing in one quick motion. Hey, it’s a drug. But if you cut your consumption in half, you’d save $1,638 a year. Take that and invest it in a TFSA at just 5%, and over 10 years you’ll have packed away over $4,800. That’s just $31.50 a week for 10 years.
Imagine you did this for a little longer … say, 20 years. Your savings: $12,742. Over 30 years your savings would be $25,800.
And once you quit entirely and had the whole $3,276 to send to your TFSA each year, at 5% over 30 years you’d accumulate more than $52,000.
Now imagine that you managed a return slightly higher than 5% … let’s say 7%, which you could do with a diversified portfolio over the long term. You’d have well over $76,000 in your savings carton.
Hey, you can keep smoking and look forward to not having to save so much because you’ll die before you run out of money. Or you can exchange an expensive bad habit for a good one that will give you more options down the road. It’s your life. You decide.