In order to find the total you would need to have kept track of what you actually spent, because using $6.25 assumes that you smoked the same number of packs each year and that the price changed only on (and every) January 1st of each year and by the same increment.
I smoked approx. 10 packs of cigarettes a week - which was true throughout almost all the years.
That would be approx. 1.43 packs a day. So if my average price was $6.25 for 1 pack, then my adjusted pack would be 6.25 * 1.43 = $8.94 per day.
I understand there are flaws in calculating this out, over the years with nothing being tracked. But being that we only have the starting and ending price - is this my ONLY way of tracking this and being "somewhat" (and I use that word loosely) accurate?
You might as well calculate it based on today's price. $10 today might be about equivalent to $2.50 back then. I would calculate it based on the price today and assume that's the value of what you smoked.
Yes, I seen that. And many others, but they are all calculating against today's price of cigarettes. I'm not sure I'm a fan of calculating it that way, it's such a skewed way of looking at it.
Thibault St john Cholmondeley-ffeatherstonehaugh the 2ndCommented:
Calculating on todays price isn't all wrong as your/the average income will have increased.
So if you originally spent a tenth of your income on cigarettes and still do, then you can depress yourself by thinking what else you could have done with the money.
Much better to look at what you aren't spending. I have seen prices nearly double since I stopped about 8 years ago. I find it amazing that people find that amount of money to spend, I don't think I could afford it now.
The procedure to use depends entirely on how accurate you want your answer to be.
Your procedure is completely correct for an estimate of what you spent.
The value of the time spent getting a better answer is probably not worth it.
It is all fudged, so
I agree that were you to derive the total quantity, then apply average, this is best without knowing more.
I recall per pack @.25, 5 pack per day non-filtered habits, carton prices from 20 to 8 to well over 40. I don't see where you have start date or avg pack per day either, or inconsistent usage or salary, so minimally considering leap year is even more negligible fudge, at best you can just use round # years and a calculator.
Given avg habit, avg price, for using excel the application to salary would follow to using its average rather than presuming it rose at same rate. While you may have began with minimum wage working part time, the amount of wage increase will likely decrease over time, the cost increase of smokes had been influenced more than inflation by the lawsuits applied across the industry, and effects are regional (NY vs bible belt tobacco producers).
For fudging the overall ROI consider other implications such as for health and insurance and fuel and time. For example, vehicle insurance costs for some was reduced for non-smokers (thus cost for smokers). Where you buy by the pack, what happens when you run out? Hop in a car to get more? (maybe buy a soda or candy as well, but for one with a habit admit to the why you went out). That's time and money, cost of fuel, vehicle wear and tear. For assessing that I think there's specific numbers IRS permits based on miles that could be averaged and amount to much than a day a year. Possible cost/savings on residence for smoking, time away from work or event where not permitted. Where time is money, your time smoking (and nothing else) can be translated to savings/cost.
Were you light or heavy smoker? Did you also get some from others, give some to others? I suppose using an average of pack and a half a day could be a norm, and the 10 packs per week could be as justified, suppose doing 5 during the avg work week of five days and double that or more during idle time of weekend having three nights (Fri,Sat,Sun). For average, there's ten in a carton so that's a carton a week.
Maybe your having quit helped you to save your job.
A lot of fudge factor any way you look at it, but your method is a good as any. even if 100% off either way, the exercise itself is worthy effort that'll give you a good "what if" for both the times of prior smoking and the present days savings - for what could have been bought before, what can be bought now. For the 10/week, fudge to 40/mo, find cost, what else can you do now having that much more available. Your $10 * a 40 gets to $400/mo (approx). Check out ads for cars on their deals and this can get to be more meaningful, more so now than back when.
To determine what you actually spent, you could assume a general rate of increase that makes per-pack costs to rise from 2.50 to 10.00 in the 21st year. An increase of 7.1773% per year gets pretty close (depending on rounding.) Increases will be a little greater as each year passes due to "compound interest", but that's similar to how costs actually rose.
To determine some kind of comparative cost based on current per-pack prices, you might as well use the current price. Units of currency were worth more in terms of purchasing power back then, so 2.50 bought what 10.00 buys today. (Not quite, but it's a meaningful thought.)
To determine how much money you'd have today if you hadn't spent it on cigarettes, you'd have to decide whether or not you'd have simply spent it on something else. E.g., would you have bought a less efficient car and spent more on gas? Gone to more movies? Paid for more cable channels? Bought more expensive food items? Fancier shirts?
Lots of people think they'd have more money, but in reality they would've just spent it in other ways. Not all, but quite a few. Only you know your tendencies. (I'd probably spend.)
Thibault St john Cholmondeley-ffeatherstonehaugh the 2ndCommented:
That's an interesting savings idea for a non-smoker Tom. You estimate how many packd a day you aren't going to smoke and put that amount of money away in a bank account each month. Not only would you have a nice little nest egg, but after 21 years you would have an accurate answer to this question - you could check ypur deposits over the period and see what rate the price rose.
Actuall there may be figures available, at least for the average price per yea from organisations that track the retail prices and cost of living after each government budget.
Thibault St john Cholmondeley-ffeatherstonehaugh the 2ndCommented:
That's an interesting savings idea for a non-smoker Tom. You estimate how many packd a day you aren't going to smoke and put that amount of money away in a bank account each month. Not only would you have a nice little nest egg, but after 21 years you would have an accurate answer to this question - you could check ypur deposits over the period and see what rate the price rose.
Actuall there may be figures available, at least for the average price per yea from organisations that track the retail prices and cost of living after each government budget.
Thibault St john Cholmondeley-ffeatherstonehaugh the 2ndCommented:
From the table in that pdf:
Price in nov 93 was 1.69
Price in Jul 07 was 4.34
so at the half way point 1.69+( 4.34-1.69 )/2 a pack may have been 3.01.
Looking at the prices during 2000 the price was very close to that. I think you can assume that at least for those years that the price increase was steady and you should be ok to use your average price.
That does indicate that today's price should be around 5.66 so more up to date data is needed.
Another way of looking at it -
Calculating the internal rate for a present value (the starting value) of $2.50 and a future value (the ending value) of $10.00 over a period of 21 years equals approximately 6.82%. Multiply the present value by 1.0682 = $2.67 to get the value at the end of year one, then that value by 1.0682 to get year two and continuing that for 21 periods results in a price at the end of year 21 of $10.00 (actual rounding made this $9.99). Add up each of the calculated prices per year and divide by 21 to get an average price of $5.70. The average price multiplied by 7670 (the number of days in 21 years) then by 1.43 (number of packs per day) would create a total cost of $62,533.84.
BTW, I smoked for more than 40 years, but quit in 1999 after suffering a heart attack. Glad you didn't have to wait for that wake-up call. Congratulations.