MoneyRates Monthly Resolution #7: Savings Rates-and Health-Can Get a Boost from Kicking a Bad Habit or Two

At the beginning of the year, MoneyRates.com set out 12 monthly resolutions to help you save money. July's resolution can not only boost savings rates, but it can also give your health a lift. Make this the month you kick a bad habit.

"Bad habit" sounds judgmental, and nobody expects you to be perfect. Everyone is entitled to some indulgences, but thinking of your indulgences financially might help you reconsider whether or not they are worth the cost.

The High Cost of Indulgence

Take smoking cigarettes, for example. A pack of cigarettes costs about $6 or more, depending on where you live. At a pack a day, that would cost you $2,190 per year. That would be a pretty decent IRA contribution! Put it into a 401(k) plan with an employer match, and you could add even more to those savings.

That doesn't even include other financial costs of smoking, including higher insurance premiums and house and car cleaning costs. So your bad habit may not be just $6 a day--the full cost could be enough to represent a significant addition to your savings rate if you quit.

Of course, there are other indulgences that can cost a great deal of money in $6 increments. If you stop off every morning for a designer coffee and a muffin, that's about $6 a day. If you buy a six-pack of beer every week, that's $6 each time--and if you prefer to do your drinking in a bar, it's more like $6 a drink.

Again, you don't have to become a saint. Just take a look at your habits and decide whether you'd rather be spending that money on something else.

Taking Action on Savings Rates

It's easy to curse the low level of bank rates these days, though you can make things a little better by actively shopping around. What can make an even bigger difference is redirecting what you used to spend on bad habits into savings. Chances are, you'll feel better both physically and psychologically if you do.

At the beginning of the year, MoneyRates.com set out 12 monthly resolutions to help you save money. July's resolution can not only boost savings rates, but it can also give your health a lift. Make this the month you kick a bad habit.

"Bad habit" sounds judgmental, and nobody expects you to be perfect. Everyone is entitled to some indulgences, but thinking of your indulgences financially might help you reconsider whether or not they are worth the cost.

The High Cost of Indulgence

Take smoking cigarettes, for example. A pack of cigarettes costs about $6 or more, depending on where you live. At a pack a day, that would cost you $2,190 per year. That would be a pretty decent IRA contribution! Put it into a 401(k) plan with an employer match, and you could add even more to those savings.

That doesn't even include other financial costs of smoking, including higher insurance premiums and house and car cleaning costs. So your bad habit may not be just $6 a day--the full cost could be enough to represent a significant addition to your savings rate if you quit.

Of course, there are other indulgences that can cost a great deal of money in $6 increments. If you stop off every morning for a designer coffee and a muffin, that's about $6 a day. If you buy a six-pack of beer every week, that's $6 each time--and if you prefer to do your drinking in a bar, it's more like $6 a drink.

Again, you don't have to become a saint. Just take a look at your habits and decide whether you'd rather be spending that money on something else.

Taking Action on Savings Rates

It's easy to curse the low level of bank rates these days, though you can make things a little better by actively shopping around. What can make an even bigger difference is redirecting what you used to spend on bad habits into savings. Chances are, you'll feel better both physically and psychologically if you do.