This is a good opportunity to correct some major misconceptions. I'll be brief and avoid being technical because this is introductory biology.
First, genes are present on DNA, and "store instructions" on building proteins, among other things. Poor diet, lifestyle and sleeplessness do not primarily affect the DNA itself, but rather the reading of it and the production of the proteins. Genes seldom get lost or damaged in a way that affects the next generation, at least in modern humans. Analogy: genes are the recipe in the cookbook, not the prepared dish. Lifestyle choices affect the dish.
This is because the aforementioned "bad habits" must affect cells responsible for the next generation (sex cells) - which is unlikely - unless the effects of the "bad habits" are strong enough to influence the entire system and cause damage to the production or maintenance of sex cells or their DNA. Sex cells are well isolated from the rest of the body. The other foreseeable way these habits can affect the next generation is to affect pregnancy itself. Poor sleep or smoking during pregnancy is obviously not advised. Gestation is a critical period in development.
In short, the expression and action of genes is certainly affected by sleep, diet, and so on, but the genes themselves are much less affected. Mutations may build in the body and contribute to the formation of cancer and other disease, but the sex cells specifically are very likely to remain mostly unaffected; it is these cells' DNA that is passed down to children.
As for the I have some relatives of mine with really good genes that are worth passing down* statement... That's a matter of eugenics and short-sighted opinion, which is strictly not scientific. Let's not address that!