How are health and personal finances related?

Health and personal finances are related in many ways. Perhaps the simplest association is the high cost of unhealthy habits. Kick a $5-a-day smoking habit, for example, and you can save $1,825 annually. Invest this amount with an 8% annual return over 25 years and you’d accumulate more than $130,000. One study found that the typical nonsmokers’ net worth is roughly 50% higher than light smokers and roughly twice the level of heavy smokers.

With respect to another health problem, …

How do health savings account (HSA) contributions affect your income taxes?

By contributing to an HSA, taxpayers will save on federal and state income taxes. If your employer offers a high-deductible health insurance policy, you may be able to make pretax contributions, as you would with a flexible-spending account.

If you open the HSA on your own, your contributions will be deductible when you file your taxes, even if you don’t itemize. The total amount of savings depends on a taxpayer’s federal and state income tax bracket and the amount that …