People often argue that the reason they don’t have any savings, or why they cannot pay off their debts, is because they simply don’t have enough money. Yet little do we realise how much our bad habits are really costing us.

The real cost of smoking

If you smoke a pack of cigarettes a day you are spending around R1 113 a month on the habit. If you quit smoking and rather paid that amount into your R1 million mortgage each month, you would pay off your bond a massive five years earlier, saving around R340 000 in interest.

Once you gave up smoking you could save around R290 per month on life cover of R1 million. Add that to your mortgage repayments and you cut your mortage payment period even further – paying off a R1 million bond six years earlier and saving R400 000 in interest payments.

The cost of alcohol

According to the World Health Organisation, a woman should consume only around 14 units of alcohol a week and a man around 21 units (a single glass of wine measuring 175ml is equivalent to 2 units of alcohol). If you decided to cut back from two glasses of wine an evening to one glass, not only would it be better for your health, but you would save around R360 per month. That’s enough to kickstart a Tax-Free Savings Account – if you invested in a growth fund with a 10% per annum return you could expect to have around R75 000 saved up within ten years.

The cost of procrastination

If you delay your retirement savings by five years, you could have 40% less saved for retirement. An individual who starts saving R1 000 per month from the age of 25 would have R3.8 million saved by age 60 – assuming a 10% per annum growth rate. A person who saves R1 000 per month from the age of 30 to age 60 would have only R2.2 million. That is the real cost of waiting to save!