Financial Advice

Be a Wise Consumer


Good for You, Good for Your Wallet

Most of us have some habit we know we should kick, whether that’s indulging a sweet tooth or eating out less or skipping exercise. We know we need to make healthy choices for our own sakes and our family’s. But here’s some extra motivation: being healthy saves money.

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Studies from a 2018 National Bureau of Economic Research (NBER) found that people who are unhealthy earn less, save less, and accumulate less wealth over the years than healthy people. Why? Being unhealthy can affect a person’s ability to work, increase their medical costs, and shorten their life, losing time for investments to grow. Let’s look at some numbers:

  • The NBER study found healthy people earn about 28% more than unhealthy people across their lifetime.
  • Unhealthy people often pay more for health, disability, and long-term care insurance. A 2015 University of Michigan study found that the average health care cost for an unhealthy employee was about $7,000 more than a healthy employee.
  • The Centers for Disease Control estimated that losing 10% of a person’s bodyweight could save them $3,100 in medical costs in their lifetime.
  • One study from the Ohio State University’s Center for Human Resource Research suggested smokers lose about 4% of net wealth per year of smoking.

Even knowing that unhealthy choices hit your wallet as much as your quality of life, it can still be tough to resist temptation. It can help to break it down and think about how much each of those small choices can cost. Let’s look at how the numbers could add up, using a person living in Texas in 2020 as an example:

  • The average price for a pack of cigarettes was $6.69. At that price, a pack-a-day habit would cost $2,441.85 a year.
  • The average price of a case of beer was $20.17, or $0.84 a beer. If you drank 3 beers per week, that would cost $131.04 a year. The average price of a bottle of wine was $13.29. If you drank one bottle a week, that would cost $691.08. And many may be spending more — American Health Rankings reported that almost 20% of Texans in 2019 reported binge drinking.
  • The typical cost of a fast food meal was $6, and the average price of a restaurant meal was $10.78, compared to $4.25 for the typical cost of a home-cooked meal. If you ate fast food twice a week, that would cost $104 a year more than home cooking. If you ate out at a restaurant twice a week, that would cost an extra $679.12 a year over eating at home.

If those yearly numbers don’t give you pause, remember that these numbers are based on average prices and behaviors for one person for one year. Adjust those numbers for what you typically spend for your family and multiply that out for a lifetime, and you’ll see the numbers add up. Factor in how your health can affect your income, medical and insurance costs, and savings potential, and you’ll see just how much you can save by making healthy choices.