3 Reasons Why Your Daily Commute Is Making You Poor

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Do You Have a Long Daily Commute?

Do You Have a Long Daily Commute?

Most Americans commute to work and most commuters travel by car. The morning commute and evening drive home are often seen as an inevitable part of modern life – and many people find things to enjoy about their commute, whether it’s stopping for coffee or listening to music or their favorite drive-time radio programs.

But have you ever thought about how much your commute is really costing you?

I recently saw a great infographic posted on the Elance blog about “The True Cost of a Commute.” This eye-catching chart will show you why commuting by car, for many Americans, is an expensive, time-wasting, budget-busting activity that too many of us take for granted as “just part of life.”

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Here are some of my favorite facts on the True Cost of Commuting:

1. Every mile counts.

Each mile you live away from work costs you $795 in commuting costs per year (in terms of the “driving costs” of gas, car depreciation, oil, maintenance, plus the “time costs” of the time you spend driving, multiplied by the hourly rate for the value of your time).

2. “Drive until you qualify” is dead.

There’s an old saying in the real estate business: “drive until you qualify.” Since most people can find a more affordable house if they buy a home that is farther outside the downtown area of the city, many real estate agents have advised homebuyers to consider buying a house that is farther away from work in order to get a more affordable monthly mortgage payment. However, the cost of a house is only one piece of the puzzle.

If you consider that each mile away from work costs you $795 in commuting costs, this means that if you take the costs of commuting into account, you can afford to spend $15,900 on a house that is one mile closer to your office – or spend $477,000 more on a house that is 30 miles closer to your office. If you’re buying a home, don’t focus too much simply on the cost of the house; instead, consider the overall “cost of living” and cost of commuting that goes with owning that house.

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3. Commuting is keeping people poor.

If you live in a two-car household where both spouses work, and you each drive an average of 19 miles to work each way, the cost of your commute over 10 years adds up to $125,000 (total of 38 miles per day x $0.51 per mile, which is the federal standard for the value of a mile of driving – gas, depreciation, etc.). That’s a lot of money that could have gone toward buying a home, saving for retirement or starting a child’s college fund – instead of being burned up in the car’s gas tank.

How can you save on commuting costs?

We’ve written before about how to save money by using less gas, and that advice still applies to car commuters, but there are a few other considerations as well:

  • Maximize your workplace benefits. The problem with commuting costs like gasoline, tires, car maintenance and parking is that these costs almost always have to be paid with after-tax dollars – there are no “pre-tax savings” for commuting like what you get with your 401(k) plan or flexible spending account benefits. However, many employers offer benefits, savings programs or discounts that can help defray the cost of your commute – whether it’s a half-price bus pass or discounts on parking. Ask at work to see if your company offers any “commuter benefits” and take advantage of whatever is available to you.

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  • Share the ride. Many companies have employee ride share and carpool programs to connect employees who can then drive together to work. See if your company has one, and if not, perhaps you could start a ride share program of your own!
  • Telecommute. Most office jobs can be done just as easily from home. Ask your boss if you can have permission to be a regular “telecommuter” working remotely from home. Even working from home one day a week can save you hundreds of dollars per year in commuting costs.
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