The Finances of Addiction

It seems like just about everybody is addicted to something. For some, it’s an addiction to technology – like hours spent on Facebook or too much time wasted checking your iPhone. For others, it’s an addiction to something that on the surface isn’t all that bad for you, like food or sex, that’s gone overboard. And then there are those suffering from substance abuse addictions, anything from drugs to alcohol, even tobacco, that’s weighing them down.

The medical community – and even pop science aficionados – spends a lot of time telling us how our addictions hurt our mental health, or physical health, or our relationships. But have you ever stopped to put a price tag on your addiction?

Technology Addiction

I think we’ve all run across a technology addict at one time or another. Maybe it’s the teenage girl at the restaurant who is talking loudly on her phone through dinner. Perhaps it’s the guy who won’t stop playing Words with Friends on the airplane (yeah, I’m talking to you Alec Baldwin). What people like this cost themselves in wasted time – and in our frustration level – is immense. But that’s not the only problem.

Sure, social networking websites are free to join – despite the urban legends that Facebook or Twitter is going to start charging its members, there’s no truth to these rumors. And while you won’t be charged a dime to use these sites, or others like them – including Pinterest, LinkedIn, and Blogger – too much time online could send you overboard on your bandwidth limits or your cell phone minutes, resulting in huge overages that could otherwise be easily avoided.

And that’s only scratching the surface. Those with serious technology addictions – like one of my good friend’s brother’s-in-law – often find themselves waiting in line overnight to buy the newest iPad or video game, even though they already have the older, slightly outdated model sitting at home. Who needs an iPhone 4S for $199 or more when they have a perfectly good iPhone 4 in their pocket? Not you or I, but to some, it’s an addiction they manage to justify.

Addictions That Make Us Fat

There’s a popular saying that everything is ok – in moderation. You can have a Diet Coke this afternoon for lunch, but you shouldn’t have five; you can have a slice of pizza for dinner, but best not to down the whole pie.

It’s when we take our love of these simple pleasures and go overboard with them that they become an addiction. And the costs of these addictions are hurting your finances on two levels:

1. A 12-pack of Diet Coke at my nearest convenience store usually runs me around $3.99. That means the cost of having one a day is roughly $0.33. I recently watched a Dr. Oz episode (blame the fiancé) featuring a woman who goes through a 12-pack every single day. Over the span of a month, my one-a-day habit is costing me $9.98; her case-a-day habit is costing her $119.70. Extrapolate those numbers out over a full year, and she’ll spend more than $1,400 annually… on soda.

2. The far more dangerous affect of this type of addiction on your bottom line comes from the increased health care costs associated with obesity. According to the Centers for Disease Control and Prevention, just over a third of American adults – 33.9 percent – are considered obese; another 34.4 percent are simply overweight. That means more than two out of every three Americans are in an unhealthy weight category. A 2007 report by the Congressional Budget Office found obese Americans paid 38 percent more per capita on their yearly health care costs than an adult of a healthy weight.

Addictions That Can Kill Us

There are unhealthy addictions – things like overeating – and then there are those addictions that are so unhealthy they can kill us… and potentially those around us. These are addictions like smoking cigarettes or excessive drug or alcohol use. An informal survey of cigarette prices in all 50 states – conducted in 2011 by the website “The Awl” – found the average price of cigarettes to be between $4.74 and $11.90, depending on where you live. The median price was right at $6, so that’s what we’ll base our calculations off here. Say you’re a heavy smoker, going through a pack a day on average – that means you’re spending $42 a week on cigarettes; over the course of a year, you’ll watch as $2,190 goes up in smoke.

Of course, the price of cigarettes or the price of alcohol isn’t the only impact of these addictions on your finances. In 2009, the Huffington Post reported that smoking costs the federal government $96 billion dollars a year in direct health care costs; that means some of your taxpayer dollars are going toward this unhealthy habit. Alcoholism and DUI cases put a crimp on the American justice system as well. Smokers and heavy drinkers pay more in medical costs too and also face higher life and health insurance premiums. The saving grace is that in terms of abuse centers, many now accept private insurance (PPO/HMO).

Is Your Addiction Worth It?

It’s tempting to think that your addiction isn’t hurting your financial situation, but if you break it down, just about everything is going to have some sort of trickle down affect. Even someone with a so-called “healthy” addiction like exercising is going to pay the price – new work out clothes, worn out running shoes, a pricey gym membership, maybe even health care costs down the road like osteoporosis from not properly refueling their body.

Readers, what’s your addiction? Can you think of ways it’s costing you?

3 Responses to The Finances of Addiction

  1. Unfortunately I think I have an addictive personality. I’ve had phases of being somewhat addicted to things like alcohol, fast food, sugar, marijuana, computer games, etc. All of these things would have a big impact on my life and on my finances. At the time though, it’s far too easy to overlook the consequences and focus on the enjoyment you get out of it. You may even justify it by saying once a day is still moderation. Really though, if you need something on a daily basis like that, you should be stopping to think about why and how is affects your life.

  2. Frugal Portland says:

    Coffee is hands down my addiction. And it is so good.

  3. Julie @ Freedom 48 says:

    I think everyone has an addition in some way. Whether it’s food, cigarettes, drugs, video games, adrenaline sports, cell phones, coffee, shopping, exercising etc.

    All of those addictions cost money… it’s just a matter of whether it’s worth it.

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