Stop Living Paycheck to Paycheck: Transportation

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:

1. The Household Budget
2. Utilities
3. Entertainment
4. Credit Cards
5. Vacations

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.

How do you save on transportation?

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