This is Part 6 of our Stop Living Paycheck to Paycheck series. You can find all of the previous posts in this series HERE.
Written by Mr. Crumbs
Aight’, so we’ve written about 4 main areas so far to reduce your expenses, to help YOU stop living paycheck to paycheck. So far, we’ve covered:
Now we’re going to cover transportation costs/gas.
This 2013 article indicates that the average household spends over $9,000 a year on transportation alone.
This article states that the average family is projected to spend almost $2,000 on gas alone this year.
So what’s the problem?
That’s too much money to spend on transportation!
When Mrs. Crumbs and I first got married, we were spending over $11,000 on transportation costs. Between car payments, insurance and a job that required a long commute, we were spending WAY too much.
We now spend about $187 each month on total transportation expenses (gas/insurance) which makes our yearly expenditures roughly $2,244 for the year.
If you throw in maintenance, I’d say another $500 per year to be generous for tires and basic maintenance. That brings our total to around $2,700 per year.
What are you spending on transportation?
In reality, we could reduce these expenses even further by selling a car or lowering our insurance coverage, but we’re not quite comfortable with doing that yet.
Let’s look at 8 simple ways you can lower your annual transportation costs and clean up this line item in your budget!
8 Simple Ways You Can Lower Your Annual Transportation Costs
(1) Eliminate the Car Payment
Quoting this 2015 USA Today article, “Americans’ average new-car loan payment hit a record $482… car buyers were paying an average 4.56% for loans… the average length of the new-car loan rose to an average of 66 months…”
Ladies and gentlemen, that is too much!
To put things in perspective, consider the fact that a $100,000 mortgage will run you between $473-736 when financed between 15-30 years.
Car payments are costing the same each month as mortgages?!
While the average home runs significantly more, I think it serves to show that we are placing too much of a priority on our vehicles. Vehicles depreciate significantly over time, and with the average financing period for a vehicle being 66 months (5 1/2 years), I consider that slavery to your automobile.
So, eliminate your car payment.
If you’re stuck in a high payment, consider selling your car outright to get the highest possible value in the short term. Or, if you have the funds available, pay off your car loan early in order to save on the interest charges. You can do this in a lump sum (i.e. pulling money from savings and putting it towards the car note) or add more to your monthly payment. Even if it’s just $20 – it all adds up when you’ve got interest compiling on top.
The option of trading down is always a possibility, but generally does not work in your favor.
To get an idea of what your vehicle is worth before you sell it, or if you’re thinking about selling it, check out Kelly Blue Book to get the estimated value.
(2) Maintain it Yourself
Unless you have one of those awesome warranties/service plans that cover everything from regular oil changes to transmission failure, consider doing the easier routine maintenance yourself.
Oil/fluid changes, belts, air filters, spark plugs, wires and tire pressure are generally pretty easy to maintain yourself. You don’t need to be a mechanic with a full garage to perform these simple tasks either; usually a basic tool set will do the trick.
If you need help with a task, check out Youtube where hundreds of others have documented “how to” do certain auto maintenance – including serious jobs like full blown transmission repair!
Taking on the small tasks yourself could save you thousands of dollars over the course of owning your vehicle.
(3) Ignore the Dealership and Read the Manual
I don’t know about where you live, but practically every single time I’ve taken a relatively new car into a dealership/shop for simple, routine maintenance (like an oil change), they’ve come back with “you need such-and-such scheduled maintenance…” like a new battery or the tires need to be replaced or you need to flush every single fluid and change X, Y and Z.
Don’t fall for it.
Read your owner’s manual first before you agree to the “repairs.” You’ll read for yourself that in most cases, maintenance suggested by the dealership/shop isn’t required by the manufacturer, or it’s not needed for a long time. Here are some examples:
- You really don’t need to change your oil every 3,000 miles anymore. Many automakers now recommend intervals from 7,500-10,000 miles.
- You probably don’t need a tune-up until you’ve hit 100,000 miles.
- The tires on your vehicle don’t need to be changed just yet. 4 mm of tread is when you should start researching.
We’re pretty lucky in that we’ve found an honest shop nearby that’s affordable, so if we need basic maintenance performed we’re comfortable taking it to them. Otherwise, I’ll generally do it myself.
(4) Drive In (not so) Style
Heated seats, navigation, Bluetooth compatibility… sound familiar? It’s nice to have, but definitely not a necessity. Even powered windows aren’t really needed!
If you’re driving a car (or thinking about purchasing a new car) with these fancy options, consider stepping down to something much less.
One of the hardest vehicles we’d ever let go was a beautiful Toyota 4Runner. It had leather, heated seats that were SO roomy and comfortable… We sold it and ended up with a used Corolla. No leather. No heated seats. And definitely not roomy.
But we saved on our car payment, gas and insurance. We lost our dream car, but gained financial sanity by paying it off before our second child was born.
(5) Drive Less, Carpool More
Get out of your comfort zone and get to know your co-workers, or your neighbors. Find out who you can carpool with and work out a rotation to save big time on transportation expenses. You’ll not only save on gas, but in wear-n-tear and maintenance.
True story – when I carpooled at an old job, one tank of gas was lasting both my co-worker and I well over a month!
(6) Move Closer to Work
This might be a little extreme (and possibly impossible) if you’re a home owner, but consider moving closer to your job. That is of course, you have a stable job and love it.
If you have a move or job change coming up in the short or long term, consider moving closer to the job, or finding a job that’s closer to where you live.
(7) Public Transportion
Catch a bus, ride a train, take the subway!
While it often takes longer to get from point A to B on public transportation, it usually comes out much cheaper in the long run than owning a vehicle.
If you go this route, take advantage of the quiet time each day to listen to a podcast, meal plan for the week or read a good book. Or use that time to finally create a household budget!
(8) Ride a Bike or Walk
My favorite solution of all time. Cycling takes longer than traditional transportation, but it nearly eliminates the need for a car and lowers your expenses DRAMATICALLY.
You also get a nice workout and can skip out on the gym membership (although my rule of thumb is 10 miles one way max).
By the way, bicycle maintenance is VERY cheap. Usually less than a few hundred per year and you only need a very small toolkit. There’s Youtube tutorials for that too, or you can check local shops like REI if you’re not comfortable doing it yourself.
We save on transportation by only having one vehicle. We have been a one car family for 9 years now. Fortunately my husband and I work a few blocks from one another and our son’s school is close by our work locations. Sometimes it can be a challenge to arrange schedules when we both need to be in different places, but we have made it work for a long time.
Annie, bumping down to one car is a great way to save! We should have written that in the post (maybe we’ll update it)!
We were a one car family for about 3 years while my husband was a bike commuter. We loved it. Couple minor inconveniences, but nothing we couldn’t handle and he was in great shape 🙂
I gave up my car a couple of years ago, it was not worth having a car to only use it a couple times a month. I freed up almost 500 dollars a month by not having a car payment, insurance and upkeep.
I purchased a bike for less than what one month of car costs were and have never looked back. In our city it takes almost an hour to go 10 km on public transportation (faster to walk).
The only thing I found was when we needed to purchase large items at the grocery store. I found that we only did this once a season. Things like toilet paper, paper towels, flour etc etc either we got a cab (which upsets me about the price but still cheaper than a car) or got a friend to drive us.
I never thought I would be one of those people who like to bike everywhere, but I am and I do not miss being in a car at all.
That sounds awesome! Bike commuting is such a great option, and it’s SO healthy! It’s amazing how much faster it can be by taking a bike vs. public transport isn’t it?
My husband bike commuted 20 miles a day (round trip) for 3 years and loved it. He said he had virtually zero stress and slept like a baby every night 🙂
$100,000 on a mortgage loan? Who lives in this fantasy world?
In many parts of the Midwest, $100,000 will get you a decent house! We used to live in Fort Worth, TX and our first house was $117,000. It was brand new, 3/2/2 and 1500 square feet (with a yard).
I had no idea. I guess it does depend on where you live. The mid-Atlantic region is quite expensive. I live in Philadelphia. Any house less than $200k is probably condemned or in an extremely bad neighborhood.
Have been enjoying on Facebook. Love all the suggestions.
Thanks Barb!
Do you have a suggestion for a good bicycle? Our local bike shop the prices for recommended bikes were 500 or more. We only have one car, which our seven people barely fit in. But the bicycle seems like such a huge investment, especially for something which could only be used in nice weather and I’m not sure how long the lifespan of it is. My son’s bike only cost about 120, but it’s wheels are now broken after only 2 years.
Hi Amy!
If you’re looking to get long time use out of a bicycle, I’d buy a used one off of Craigslist. Reason being, the bike shop bicycles (Trek, Giant, Cannondale) are generally of better quality than the WalMart/Target bikes – and buying a bike used off of Craigslist allows you to get a nicer, higher end bike for the cost of a WalMart bike. (I only know this because my husband is a bicycle nut).
Bottom line, you can easily save a TON going the used route. They depreciate faster than cars!
Great ideas, I am enjoying this series.
When you add a wheelchair into the mix, it gets even more crazy! When our son was smaller, I just lifted the chair into the back of the Suburban and it was all good. His new chair? Way heavy! I couldn’t lift it up that high anymore.
Thus, we went with the cheapest vehicle with a lift we could find–a used short school bus. Many people make fun of us, but it works for us! Much cheaper than a conversion job, we all fit into it (7 kids) and it has an amazing lift for our disabled son. Not to mention storage space! It’s ended up being the perfect vehicle for us.
A paint job is definitely on our “to-do” list, but until we save enough money, we will keep driving the yellow short bus!
Hi Lisa!
You do what you have to do right? Those conversion vans and suburbans aren’t cheap – and if the school bus works does what you need it to do (and then some) that’s a bonus! Plus, think of how much more room you have!
We looked at the new SUV’s not too long ago, and couldn’t believe the prices of cars nowadays ($30-40,000!!!! lol. We’ll be keeping our used CRV till it dies 🙂
I really like your practical mindset.
We bought a small Nissan Versa, and my husband takes the bus. We are also looking at purchasing an electric bicycle with a budget of about $2,000. We realize not everyone can or is able to do so (our daughter just bought a 99 Nissan Sentra for that amount!), but it should work well for our situation. Our reasoning is two-fold – we live in sunny southern California, so we can ride it year round and we both work within 10 miles of home, so either of us can use it, depending on the day.
Hey Tiffany- thank you for citing our research in this piece. I wanted to let you know that the numbers in there are up to date as of 2015. (You’ve said this is a 2013 article in your piece).
Just thought to chime in in case any of your readers think your references are out of date. 🙂
Best,
Madison
Thanks Madison!