As a Public Transportation user for the entirety of my career, 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 if you want to Save Money on Transportation Costs.
Eating up almost 14% of a person’s 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 definitely not out of reach.
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 canceled 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 by 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 snowstorm, 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?