The long-term health consequences don't feel real when you're young. It's easy to dismiss, even if you logically understand the risks.
The expense is not a problem. Utterly unimportant.
The addictive aspect is a subtle beast. It creeps up on you slowly. At first, smoking is a great, fun thing to do every once in a while. It's a great, fun thing to do with friends. Slowly, every once in a while turns into every day. Then, a few times a day. Now you need a cigarette to start the day right. You try to cut back and only then realize you're addicted.