Anyone who travels outside of North America recognizes that Americans drive more than nearly anyone else in the world. Even in the wealthiest cities of Europe and Asia, most people live close to work and commute via bus, train, or bicycle.
Not in the United States. Remaining true to our heritage of roaming cowboys, coming and going as they please, Americans embrace the mobile lifestyle. From the sixteen year old who works two jobs over the summer to save up for his first car, to the blue-collar retirees who cruise the country in a motorhome, travel appears to be one of the foundational pillars of the American lifestyle.
Of course, leisure travel is a valuable and enjoyable way to spend one's money. The real financial dilemma arises from the work professional's daily commute. A vast majority of Americans commute 15 to 90 minutes to work – each way. If this is you, the following few paragraphs may inspire you to make a few life adjustments.
The Cost of Your Commute – The Car
The IRS estimates that every mile driven costs $0.545. This amount incorporates fuel costs, wear-and-tear on the vehicle, and the price of insurance and registration. Depending on where you live, this amount may be higher or lower. However, this government-approved amount makes doing the math easy because it suggests that you pay about $1 for every mile that your house is from your office.
In other words, a fifteen mile commute costs you $15 every day. A forty mile commute will result in $40 a day for car expenses. Multiply this amount by 5 days a week, or 250 days a year, and it doesn't take long to discover the true expense of this commute. The 15 mile commute costs $3750 a year. The 40 mile commute costs $10,000 each and every year!
The Cost of Your Commute – Your Time
Most people forget to incorporate their time into the cost of their daily commute. A 30 minute commute results in 5 hours of lost time every week, and a 60 minute commute results in 10 hours of unproductive time – essentially adding more than a 6th work day to your weekly schedule. For someone who works 50 weeks a year, this adds up to 250 hours and 500 hours of lost time each year, respectively. Multiply this time by your hourly wage to determine how much this time is worth.
Of course, many people don't consider their commute time as time that they could be working. However, this time could be spent with family, on leisure activities, or doing freelance work online. In short, this time is still valuable.
The Annual Cost of a 20 Mile Commute – $11,250
For someone who makes an average income of $25 an hour, $11,250 is the annual cost of your 20 mile, 30 minute commute.
For someone considering a move to the country or a higher-paying job in the next town over, discovering the true cost of your commute is not only beneficial, it's necessary. Many people have hindered their financial progress by making a move or taking a job that they anticipated would improve their lot in life. In actuality, the costs of their commute caused the decision to have a negative financial impact.
Are you considering a new home or occupation? How much will this cost you in the long run? Furthermore, how much is your current commute costing you? It's something to think about.
From the historical archives of BankVibe.