A cigarette here, a few drinks there and choosing potato chips over baby carrots all add up. Indulging in vices is often portrayed as the fun part of life, but letting bad habits go unchecked can have a deleterious effect on your wallet -- not to mention your health.
But don't worry; you can change. A study by researchers at University College London in the United Kingdom shows that it takes a little more than two months on average to break a bad habit and form a new one.
The first step to kicking a bad habit is to understand exactly how it impacts you. Here's how a few of the most common bad habits wreak havoc on your budget every year. Bankrate shows how you can reverse the trend and amass some serious money instead by annually investing those funds in a long-term savings vehicle that returns a modest 6 percent a year on average.
Yearly cost: $2,555
Savings after 30 years of compounding interest: $201,994
Cigarettes retail for about $5 to $12 a pack, depending on where you live. But factor in increased medical expenses, insurance costs and the impact of secondhand smoke to society, and the real price increases dramatically. Researchers from Duke University and the University of South Florida estimate that, for a woman, the all-inclusive cost of smoking over a lifetime is $106,000; for a man, $220,000. This includes social costs imposed on others via Medicare, Medicaid and Social Security.
Richard Kappers, director of marketing at Cigna, says smoking not only drives up life insurance costs by 20 percent and increases health insurance expenses, it can also impact your ability to qualify for either.
But renouncing the habit pays off. Quitting smoking at age 39 can reduce the "excess risk of death from any cause" by up to 90 percent, according to a January 2013 article in The New England Journal of Medicine, and can qualify you for the same insurance rates as nonsmokers, says Kappers.
"Generally, they want you to be tobacco-free for 12 months before you can get the nonsmoker rates," he adds.
It's difficult to put a price on smoking for an individual. Considering just the cost of the cigarettes themselves, smoking a pack a day at $7 a pack will leave you $2,555 lighter in the wallet per year. If you instead invest that amount annually, after 30 years, you will have amassed $201,994, assuming a 6 percent return.
Yearly cost: $1,560
Savings after 30 years of compounding interest: $123,331
Unlike smoking, casual drinking won't drive up insurance costs. But heavy drinking can cause liver damage and other health issues, says CFP professional Anna Molin, an independent insurance agent with Huntington & Wheatsworth insurance and financial services firm in Towaco, N.J.
"They will do a blood and urine specimen (during insurance medical underwriting)," she says. "(Alcohol) is tested in there, same as drugs. That could increase your premium," though how much depends on the level of the damage.
Drinkers who get behind the wheel and land a conviction of a DUI (driving under the influence) or DWI, (driving while intoxicated) will also have to cough up around $10,000 in fines, bail, towing, insurance, legal fees, treatment and license reinstatement costs, according to the Georgia Department of Behavioral Health and Developmental Disabilities.
Drinking can still take a financial toll even if it's done in moderation. Consume five drinks per week at a cost of $6 per drink (budget more if you're swigging cocktails versus beer or wine), and you'll rack up a $1,560 tab by the end of the year. If you instead invest that amount annually, after 30 years, you will have amassed $123,331, assuming a 6 percent return.
Poor eating habits
Yearly cost: $432 to $4,879
Savings after 30 years of compounding interest: $34,153 to $385,725
More than 1 in 3 U.S. adults is obese and therefore more prone to obesity-related health conditions, including heart disease, stroke, Type 2 diabetes and certain types of cancer, reports the Centers for Disease Control and Prevention. They're also prone to higher health and life insurance costs, medical expenses, food and clothing costs, decreased productivity, and lost wages from missing work.
A study by researchers at George Washington University in Washington, D.C., estimates that extra pounds cost the average overweight man $524 per year and the average overweight woman $432. For the obese, costs dramatically increase. GWU estimates that the annual cost of being obese in the United States is $2,646 for men and $4,879 for women.
Weight issues not only drive up costs; they can also prevent consumers from getting the coverage they need, says Kappers.
"Now you see diabetes and weight issues at the top of the reasons why people are getting declined (for life insurance coverage)," he says. "They're hand in hand."
Yearly cost: $1,200
Savings after 30 years of compounding interest: $94,870
"Human beings are simply wired to spend," says Jean Chatzky, author of eight personal finance books and head of the online financial literacy program Money School. "Our brains get a lot of pleasure out of rewards that we can have right now and very little, if any, pleasure out of waiting for things."
That may partly explain why the U.S. savings rate is currently a dismal 2.5 percent, according to the Bureau of Economic Analysis. Research shows that overspending isn't just fun; it's easy to do without noticing. According to a survey from the life insurance and capital management company Country Financial, more than 1 in 5 respondents said they spend more than they earn for at least half the year, but only 9 percent classified themselves as living beyond their means.
"If it's a minor problem ... then track your spending for a little while. You'll see where the holes in your budget are and should be able to stop yourself," says Chatzky.
Keep in mind that overspending costs you in the long term, too. Exceed your paycheck by just $100 per month -- the equivalent of a modest date night -- and you'll rack up expenses of $1,200 per year.
Yearly cost: $600
Savings after 30 years of compounding interest: $47,435
We're wired to overspend, but we're also naturally inclined to put off things we don't want to do until it's too late. Witness the hordes who don't sign up for their 401(k) plans even though they get matching contributions from their employers. Even modest procrastination comes at a cost. Lose $50 monthly to an unused gym membership or grocery coupons that never got clipped, and you'll lose $600 per year.
"If the cost of procrastinating something is high enough, you won't do it," says Dean Karlan, an economics professor at Yale University and co-founder of the goal-setting site, stickK.com.
One way to avoid procrastinating, Karlan says, is to make the cost of skipping that to-do item so high that you won't avoid doing it. Sites such as stickK and apps such as GymPact allow procrastinators to attach a financial reward (or punishment) to their goals. But for incentives to work, Karlan says you have to want to change first.
"There is some needed self-reflection for any true behavior change," he says. "It doesn't have to be superdeep and intense, but there does need to be some 'aha!' moment."