Costs of Addiction - Financial Consequences of Substance Abuse

The Economics of Addiction
How Drug and Alcohol Addiction Impact Financial Health

Although it is impossible to put a dollar amount on the total cost of addiction one thing is certain: Addiction is expensive. Most people don’t realize the true cost of addiction because it is a slow insidious drain on finances, friendships, careers and eventually…life itself. Take time to inform yourself about the economics of addiction to understand how substance abuse will impact your financial health for years to come.

1. Money Spent. The actual cost of buying drugs, alcohol or even cigarettes adds up fast.  The following information is based on the purchase of an inexpensive domestic six-pack of beer (pre-tax).  Other forms of alcohol, such as wine, whiskeys, rum, and liqueurs cost significantly more.
   
   

   Six Pack of Beer Purchased Weekly	Weekly Cost	Monthly Cost	Annual Cost	10 Years	20 Years
   One	4.40	17.60	211.20	2,112	4,224
   Two	8.80	35.20	422.40	4,224	8,448
   Three	13.20	52.80	633.60	6,336	12,672

   Estimates for illicit drug expenditures are not 100 percent accurate because it is impossible to get reliable statistics for illegal drugs so the figures below are conservative estimates based on surveys and studies. 

   Drug Habit	Daily Cost	Weekly Cost	Monthly Cost	Annual Cost	10 years	20 years
   Marijuana	2.89	20.25	81.00	972.00	9,720	19,440
   Cocaine	26.57	186.00	744.00	8,928	89,280	178,560
   Heroin	29.85	209.00	836.00	10,032	100,320	200,640
   Methamphetamine	12.42	87.00	348.00	4,176	41,760	83,520

   
   
2. Loss of Productivity. The economics of addiction don't stop with the purchase price alone; substance abuse is associated with increased absenteeism from work, fewer promotions and increased risk of unemployment.
    
3. Lifestyle. The time spent searching for drugs, using drugs, recuperating from the use of drugs and then repeating the cycle could be better spent learning new skills to increase job opportunities, exercising to take better care of one’s health or simply spending quality time with friends and family.
   
   
4. Illness. Drug and alcohol abuse eventually result in higher medical bills, increased risk of injury or illness directly – or indirectly – related to addiction, and long term loss of earning capacity due to illness, disability and medical costs.
   
   
5. Insurance. Plan to pay more for almost every type of insurance ranging from car insurance to health insurance due to substance abuse. The average person dealing with an addiction is charged with 1.4 DUI’s that result in increased car insurance rates of up to 300 percent – if not outright cancellation. Co-morbidity, illness and injury caused by intoxication further increase the cost of all types of insurance leaving the entire family more susceptible to all kinds of accidents, injuries or other financial down-turns.
   
   
6. Legal Bills. In addition to increased insurance rates, DUI’s, arrest warrants and other legal problems are common among those that abuse drugs or alcohol.
   
   
7. Loss of Earned Income. Substance abuse is strongly correlated with dropping out of school – whether high school or college – creating a lifelong loss of earned income. Worse, Social Security and retirement benefits are correlated to earned income so the loss of annual earnings will even impact retirement.
   
   

   Education Level	Average Annual Earnings
   NO HS Diploma	$18,734
   HS Diploma	$27,915
   Bachelors Degree	$51,206
   Advanced Degree	$74,602

   
   
8. General Money Problems. Late bills, higher interest rates and bad credit scores are common problems. It only makes sense; money that should go toward paying down debt goes toward buying drugs instead, accidents and higher insurance rates result in increased charges for buying everything from a new car to qualifying for a mortgage. Not only does it hurt the person suffering from the addiction but impacts the lives of spouse, parents and children for years to come.
   
   
9. Add it Up. Take time to tally the results from each of the above areas to understand the real threat to your financial future. The sooner treatment begins the better the chance for success. Early intervention reduces the risk of illness, injury, increased legal and insurance rate and completion of educational or professional goals.
   
   
10. Compare. The cost of treatment amounts to very little in the big picture; the difference in annual income for one single year between finishing school and failing to complete a degree more than compensates. Even using the most conservative estimates, the economics of addiction create a devastating financial impact for years to come. The cost of treatment often amounts to only a few weeks or months of use when the total impact is calculated.

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