How to Save Money on Transportation Costs

By | 2016-09-19

As a Public Transportation user for the last 5.5 years, I have taken the savings for granted. I knew my bus pass was cheaper than driving, simply because a month of parking was more than my bus pass. One comment from a co-worker motivated me to sit down and actually figure out how much we are saving. Keep reading is you want to Save Money on Transportation Costs.

Eating up almost 14% of a persons paycheck on average, transportation costs are the second highest expenditure, only housing costs were higher. That number surprises me a little, but when I think about how many families have multiple vehicle loans it is definetely not out of reach.

The Comment

The person sitting next to me showed how little people think about spending money. After working at our company for 3 years, he told me he finally cancelled his bus pass because he was driving most of the time anyway. He was paying $45 a month for a bus pass AND then paying for gas and parking. It takes under 3 minutes to cancel a bus pass, we have an electronic form that goes directly to HR.  $1,620 could have been saved in 5 minutes. Come on MAN, you are KILLING me.

We save over $3,500 a year taking the bus

Like I mentioned before, I knew it was the right financial choice to take the bus, but I had no idea the savings were that high. I put the actual math below, but I will quickly highlight the numbers here.

$90 a month for 2 bus passes = $1,080/Year

Cost to drive 1 Car for a year = $2,845.24

Since there are multiple times per week Mrs. AE and I end up on different busses, we would not be able to get by with 1 car 100% of the time. I am going to conservatively multiply the cost to drive 1 car by 1.25* to see our actual savings.

$2,845.24 * 1.25 = $3,556.55

Honestly, I think that the $3,500 is a conservative estimate. Our second gas does not get as good gas mileage and daily parking is $10 a day. If gas prices ever go back up our savings would tick up even further.

*25% of the days we would need to take a second car – meetings and varying work schedules are the main cause

The math behind our Savings

If you are interested in the actual breakdown you can read through this section.


Our car gets about 27 miles per gallon and we live about 13 miles from work. That works out to about a gallon of gas/day (might be a little more considering we would hit traffic most days).

22 Work Days/Month * 12 Months *$2.25/gal = $594 per Year 


Monthly parking contracts are outrageous, around our building it costs anywhere from $125 to $210 a month to get a spot. If you want to park in a heated garage it would run closer to $250. For these calculations I will use $140 as that was the most common price close to our building.

$140 * 12 Months = $1,680 per Year


If we had to drive to work every day, we would stack an extra 6,760 miles on our vehicles. Extra miles equals Extra Maintenance. I found a study by AAA that states maintenance costs equal about 4.9 cents per mile.

6,760 Miles * 4.9 Cents = $331.24 per Year


Using Public Transportation allowed us to drop our second vehicle down to Low Mileage insurance coverage saving about $20 per month.

$20 * 12 = $140 per Year

For the Healthy Crowd

There are a lot of people at our company that don’t even own vehicles and use a combination of Public Transportation, biking and walking to get to and from work (or anywhere). The savings are huge, you get to completely drop vehicle maintenance, insurance and registration from your yearly budget.

One great thing about the buses and trains in Minneapolis is you can store your bike for the ride. Even the actual train has bike racks so you can start biking once you get downtown. Weigh in if this is common in your city, I am curious if we are an outlier or if this is a normal practice.

This is more difficult for people with families, getting to and from daycare with a small child would be an interesting challenge.

The Time Factor

Sitting in traffic is my nightmare, it makes me cringe to think about all the wasted time not moving forward. Public Transportation saves time on 2 fronts for Mrs. AE and I.

  • Decreased Travel Time – The buses are allowed to use the shoulder, and we cruise by all the traffic, all the way to our house. This saves us at least 20-30 minutes a day in travel time. When there is a major snow storm, it can save hours.
  • Increase in Productivity – Our commute is about 20 minutes each way, that means I get 40 minutes to read all the awesome blogs out there while someone gets paid to drive me around.

Saving an hour a day is worth it to me without the huge savings. Not wasting that time to go to/from work helps me mentally as well, I don’t feel like work is sucking as much time away because I am able to do something I like on the way there.

Living near public transportation

In order to drastically cut your transportation costs and save time, you need to live closer to Public Transportation hub. If you are looking to move put Public Transportation towards the top of your list. If you are spending $1,000’s a year and wasting hours a day just getting to and from work, it might be worth moving just to cut those two categories.

We moved within a half mile of the bus stop making it easily walkable (especially in the summer). I pulled up bus routes and schedules when we were looking for a new house. It was a top 3 factor for us.

Do you use public transportation? Would you consider moving to cut down on the cost/time of your commute? Do you have any other methods to Save Money on Transportation Costs?

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27 thoughts on “How to Save Money on Transportation Costs

  1. Financial Panther

    I’ve been a mass transit user myself ever since I moved to the Twin Cities. The bus and train system here are great and if you have a smart phone (which every millennial has) it’s very easy to figure out which buses get you where.

    A few years ago, I also found myself signing for the Nice Ride bikeshare system. This makes it really easy to get around town. If you live in a city with a bikeshare system, I highly recommend signing up for it. Great for those quick trips around town and helpful as a “last mile” mode of transport as well.

    1. Apathy Ends Post author

      Love the system we have here in Minneapolis, they have sunk some time and money into it and it is paying off.

      I know of a few others that use the nice ride and have nothing but great things to say about it. Thanks for the comment!

  2. Team CF

    “Weigh in if this is common in your city, I am curious if we are an outlier or if this is a normal practice”. Bikes in trains in the Netherlands are no longer permitted during rush hour (space issues). However, fold-able bikes are still permitted an otherwise you just get two and use one at either end. Still cheaper than using a car!

    Mrs CF actually uses public transport to get to work (paid for by the employer), I’m forced to use the car due to different work locations throughout the country that are not always easily reachable by public transport. Fortunately the employer provides a company car. In short, we have not costs for commuting (unfortunately I cannot use the company car for personal use, will be heavily taxed if I do), but therefore did decide to keep our car to keep some flexibility.

    Oh and great minds think alike, you have the same blog layout as Tristan/Jasmin from Dividends Down Under 😉

    1. Apathy Ends Post author

      Dividends Down Under is a great blog!

      Its nice that your employer pays for your transportation, pretty sweet perk. There are times that the amount of bikes causes a problem on the train but most of the time its not a hassle

      Thanks for the comment – I appreciate the read

  3. Matt @ Optimize Your Life

    I’m a big public transit guy as well. My office is right above a subway stop and my apartment is a few blocks from a subway stop. Plus rush hour traffic is miserable and the train ends up being faster than driving.

    Adding to the savings that you already outlined, I have access to a transit flex spending account allowing me to pay for my subway fare with pre-tax dollars. Public transportation ends up being so much cheaper than driving.

    1. Apathy Ends Post author

      I can’t stand traffic, I get crabby after about five minutes and Mrs. AE does not appreciate my attitude.

      Thats awesome on the Transit Flex Spending Account, I wonder if that is a state thing or if there is a federal program.

      Thanks for the comment Matt!

  4. Ty @ Get Rich Quickish

    Another bus commuter here. If you invested that $3,500 per year for 10 years, assuming 7% annual stock market return (adjusted for inflation), then you’re looking at nearly $50,000! Just for riding a bus. Nice move man !

    Our public transit system in the Seattle area also offers bike racks. Most buses can fit about 4 bikes I think.

    1. Apathy Ends Post author

      It definetely boosts our savings rate, assuming its one of the reasons we haven’t had to cut spending in a few other areas.

      Nice – glad to hear there are some other major cities making commutes convenient for the frugal crowd

      Thanks for the comment Ty!

  5. Tawcan

    I would love to take bus for daily work commute. But by taking bus it more than doubles my commute time (~25 min by car vs 1 hour 10 min by bus). For me the dollar saving taking public transportation isn’t worth my time. Not to mention I often have to get to work super early (like 6AM) and sometimes stays late. The bus schedule doesn’t work for these non-typical work times.

    1. Apathy Ends Post author

      Dang, thats unfortunate that the schedules don’t work out in your favor, I would make the same choice as you if we had schedule issues like that.

    2. S
      Sarah @ Couple of Sense

      I’m in the same situation and I don’t live that far out of the city yet it would take me about 2 hours on a bus vs 30 minutes in a car. That isn’t a tradeoff i’m willing to make. It would be nice to save some money as driving costs money and I also have to pay for parking. But my time is worth the difference so I suck it up.

      1. Apathy Ends Post author

        I wouldn’t make that trade-off either – 2 hours makes the day to long

  6. Dollar Engineer

    Nice this is pretty awesome and I love when the math is laid out for us too! What’s crazy is your co-worker who waited so long to cancel that bus pass. Even crazier is this is so common. I know plenty of people too who for whatever reason don’t cancel a service they are not using (gym membership, cable, Netflix, etc.). Whatever it may be I just don’t get why. The costs easily add up over the course of a year.

    1. Apathy Ends Post author

      Man, I still can’t believe he did that – then ADMITTED it. Companies love monthly payment, they are banking on people not cancelling their membership

      Thanks for the comment Mr DE

  7. The Green Swan

    To your question, yes the buses here in Charlotte also have bike racks. Public transportation isn’t quite as convenient here, but we still use it on the rare occasion. For the most part though, we can drive together and utilize the free parking spot my wife Lucy is given at work (about a ten minute walk for me). This helps us save pretty significantly. Parking costs are pretty comparable you what you see in Minneapolis. Crazy how expensive transportation can be huh?

    1. Apathy Ends Post author

      Still a little surprised the % is that high – guess I have been spoiled for five years.

      Nice that you two can carpool, I can’t imagine paying for two people to commute separately

  8. Dividends Down Under

    We’ve done a very similar article about how we have one car, and how only having 1 car will save us $171,500 over 51 years – that works out to an average of 3 entire years working. Utterly crazy, so any articles that affirm this idea I’m all in support of, more people need to realise how much their car is truly costing them!


    1. Apathy Ends Post author

      That is a crazy amount of money for doing something so simple. Thanks for adding your experience, now I know that I am not the only one saving a ton of money.

      Appreciate the comment Jasmin

  9. Financial Slacker

    I personally do not use public transportation much right now. For a long time, I worked in Chicago and regularly rode the train. But now that I’m working from home, most of my transportation time is spent driving the kids to various activities.

    If I were to start working outside the home again, I would consider it. My neighbor rides his bike 12 miles to work every day. Not only is he saving money, he’s getting his exercise. If you combine the time he would spend driving in a car with the time he would spend getting comparable exercise, it probably takes less time to ride his bike instead. And as you said, if it’s raining, he can load his bike onto a bus and take that home as an option.

    1. Apathy Ends Post author

      The bulk of our public transportation is going to/from work, we would be in a similar situation if we didnt have to go to work.

      Thats a pretty intense bike ride, I am amazed that some people have the drive to do that in the morning.

      1. Financial Slacker

        The bike ride is even more intense than you know. We live in the foothills of the Sandia Mountains. Everything in the city is downhill from us. So his ride is fine in the morning. It’s the afternoon that requires him to ride back up gaining about 1000 feet of elevation in the process.

        1. Apathy Ends Post author

          Holy smokes, that is a good workout – That is some dedication to health and frugal travel.

  10. ChooseBetterLife

    Buses in Phoenix have bike racks too, though I haven’t taken advantage of them.
    This is a great article, but you didn’t include the cost of the car itself. A friend posted a photo on Facebook yesterday of her hugging her brand new GIGANTIC truck. She said “Oh Yes I DID! The payment was the same, just longer, so I HAD TO!” That post got so many likes and encouraging comments it was probably one of her most-reacted-to posts all year, but it made me feel sad.

    1. Apathy Ends Post author

      that is sad, Honda has tried to pull that on me a few times – they even sent me a hand written note saying they could make me an “aggressive offer” on our vehicle.

      If you didn’t buy new cars you could double the $3,500 easily I bet

      Thanks for the comment!

  11. Finance Solver

    I’ve used the bus for 4 years during my college days. I’m so glad to have done so cause it saved me so much money. Nowadays, I use my car to drive 5 miles total per day (I’ll probably drive 5k miles this year, if that) to go to work. Free parking at my apartment and my job, doesn’t get any better than that!

  12. F
    Full Time Finance

    Honestly I’m not much for public transportation as I prefer to live rurally. However we have purposely moved to be closer to work. Besides the above mentioned cost savings we couldntb see us trapping our kids in the car for 2 hrs a day. We’re now 5 mins from work. But we need the car for our weekend hiking trips.

    1. Apathy Ends Post author

      We still use the car a lot on the weekend and I totally get the move closer to work – saving time is just as important as the money

      I don’t think putting kids in a car for 2 hours a day would be a good move for anyone’s sanity


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