OBJECTIVES: Use of substances (pan, chaalia, ghutka, niswar) is associated with serious health risks. In Pakistan most people use substances from early years of life which keeps them on risk of short life span. It is important to understand the cost implication and provide knowledge about the effects of these substances. The aim of this study was to estimate the costs of using these substances and to understand the reasons for using substances. METHODS: This was a cross-sectional study conducted in two residential colonies in Karachi, Pakistan during 2008 and 2009. Pre-coded structured questionnaire was administered to collect the data on socio demographics, costs, reasons for use of substances and use of substances per day. The data was analyzed on SPSS version 18.0. Possible measures were taken to ensure the confidentiality of all participants. RESULTS: From 124 randomly selected residents, 107 (86%) agreed to respond. All the selected participants were between the ages 10–71 years (mean±sd age 36.2±16.4). Of the total, about one-fifth of the users were females. Daily use of substances was significantly higher among males (p<0.001). Further, the use was higher among adolescents than adults (p<0.001) and interestingly less educated consumed less than high educated (P=0.06). Males are spending significantly higher on substances; Rs. 37±11.5/day [Rs.930 or (US$13)/month] compared to females. Overall, 41% of the cost is spent on cigarettes followed by 27% and 23% on local and branded ghutka respectively. The main reasons for using substances were peer pressure, easy availability of substances, stress, liking of taste and to treat toothache. CONCLUSIONS: This study concluded that use of substances is higher among young males and they are spending a lot on them. To prevent this population, regular awareness campaigns may be held at community and school level so that, continuous re-enforcement make them to quit from using any kind of substances.