My Bad Habit Costs $770,856.78

Have you ever thought about this? I’ve had some bad habits in the past and have managed to overcome a lot of them, but one thing I’ve learned is that it takes a hell of a lot more than committing to change. Your subconscious has a powerful hold over what you do, and breaking a bad habit is going toe-to-toe with your subconscious on its own turf; you’re going to need some heavy artillery to bust through that wall.

So here’s a weapon in my arsenal I use, in combination with many others, to really drive out those bad habits once and for all. It’s money. How much money are you losing because of that bad habit? Have you ever tried to calculate it? I did when I decided to quit smoking and was astonished at what I found out.

Direct Costs

A lot of habits have direct costs and, if you’re going to be a successful entrepreneur you’re going to have to get pretty darn good at ferreting out those expenses that aren’t producing any income. One of my habits was pretty obvious, smoking. $5 for a pack of cigarettes, a pack every other day, that’s $17.50 a week and $910 a year I was spending on smoking, and I wasn’t even a heavy smoker.

Indirect Costs

So direct costs were easy to figure out, but how about the indirect costs? Things like time wasted, energy wasted, opportunity costs for everything you could have been doing or spending your money on instead of your habit. So how did my smoking fare?

Well, a pack every other day is 10 cigarettes a day, and figuring that my average cigarette break is around 10 minutes, that means I waste 100 minutes, or just over an hour and a half, out of every single day choking down that foul pollution. That doesn’t even take into account all the trains of thought lost and momentary brilliant ideas gone forever because I got up and went outside for a smoke instead of writing them down.

How about energy? Well, it’s hard to quantify that, but I can say that when I started smoking, I quit running. I’m not sure which had the greatest effect, but I can tell you that I used to drink 1 cup of coffee a day to get me to a running start on my day, and ever since I started smoking I’ve had to drink around 5 cups a day just to keep from falling asleep at my desk. So, a 4 cup increase? Well, let’s be conservative and say that 2 of those cups were simply due to trying to keep an ultra high energy level at a high-stress job and the other 2 extra cups were due to an overall decrease in my daily energy level. So, conservatively, 1 cup to 3 cups due to smoking. Let’s call it a 300% decrease in my overall energy level. I don’t know what that equates to in lost performance, but why don’t we call it 30%? Well, maybe something like that.

Opportunity Costs

Ah, every person with even a little bit of money needs to be as familiar with this term as the back of his hand. Opportunity cost is what you could have had, had you chosen to not spent your money/time/energy on something else. So what was my opportunity cost of buying a pack of cigarettes every day? Let’s assume I could have invested in the stock market and earned a conservative return of 6% on my money. $17.50 a week at 6%, compounded annually, for 35 years (I’m 25 now) is $107,489.99!

Now what about my wasted time? Money’s pretty tight right now, so it’s hard to say what my time is worth, so let’s just be as conservative as possible with it. Let’s call it $10 an hour. We already figured I’d have an extra 100 minutes a day if I wasn’t smoking, at $10 an hour, that’s an extra $16.67 a day. Add that to our $17.50 per week at 6% for 35 years - we’ll figure I only work 5 days a week - and smoking, so far, has an opportunity cost to me of $619,425.82!! This is getting crazy.

The opportunity cost of energy spent is certainly not going to be the most accurate calculation in the world, but let’s try it just for shits and giggles. I figured I’d have around a 30% increase in performance as a result of my higher energy level from quitting smoking and running again. If a 30% increase in performance led to a 30% increase in income, quitting smoking would jump my hourly wage to $13 an hour. Now to add that to our huge and growing figure that represents opportunity cost. First, we’ll figure a $3 an hour, 8 hours a day, 5 days a week, which comes to an extra $120 a week. Now we have to go back to our wasted time calculation because that was based on $10 an hour, so instead of an extra $16.67 a day by saving time, we’re now making an extra $21.67 a day, which comes to $108 a week. So, here’s the rundown;

The Opportunity Cost of Smoking:

• $108 a week for time and energy wasted
• $17.50 a week for the cost to purchase cigarettes
• Total: $6,526/year
• 35 Year Opportunity Cost assuming 6% return: $770,856.78

If that’s not a reason to quit smoking, I don’t know what is!

Try this with your habits. How much are they really costing you?