I recently traveled for work, from Los Angeles to Mississippi. The evening prior to my return was a beautiful gulf coast evening. The air was crisp and cool, the beach was almost empty, the sun reflected a deep red off the water, and as I strolled along I couldn’t help but envy how relaxing everything felt. It was a completely different feel from that of Los Angeles. There were no car horns, no road rage, no concrete highways 8 lanes wide, and best of all, no traffic. Oh, and this was a Thursday….
When I finally got to my car, got out of long term parking, and hit the freeway, I was ready to drop the windows, feel the wind on my face, blast some Bob Seger, and rock that Hyundai Accent all the way home. It was now 5pm….on a Friday…..on the 405 freeway.
What happened next you might be wondering? Well for anyone that’s been in Los Angeles you already know what happened next. I spent the next 150 minutes, 2.5 hours, and traveled a grand total of 40 miles. As I sat there, parked on the freeway, I did a little people watching. There was the business man sporting the Mercedes, the soccer/yoga mom in the Porsche Cayenne, and the badass in the Audi, cutting lanes like he was actually going to get somewhere. Every car I could see, in every lane, had a whopping grand total of one person in it. We all looked like freaking zombies, staring blankly ahead into the vast expanse of red brake lights. I'm pretty sure I was drooling at one point, or foaming at the mouth. Either way, I'm sure it was sexy.
As I sat there I thought to myself, why do we put ourselves through this? Why do we choose to work in jobs that force us to commute for hours on end every week? Why do we work in one city, and live in another? Why have we accepted that 40 minutes, an hour, 1.5 hours, are reasonable commute times? And why the hell do so few carpool?
The average travel time to work in the U.S. is 25.4 minutes!
If you get really crazy and extrapolate it out over a 30 year work career, you’d spend nine months of your life behind the wheel. This is just time cost, let’s also look at the dollar cost.
Let’s run a few numbers using my life as an example. I’ll detail what the typical commute costs are for many of my co-workers and why I refuse to let it bankrupt my future.
First, 80 minutes round trip driving adds almost 7 hours of time to our work week. Essentially, we might as well be working 6 days per week, for 5 days’ pay. The actual dollar costs are even more ridiculous.
According to the Department of Transportation, as of 2014, the average cost of owning and operating a vehicle is 58 cents per mile. For my 90 mile round trip, this would equate to $52 per day. At first glance, this seems extremely high, but you have to remember, this isn’t just the gas and tires cost. This would include ownership costs as well, such as depreciation, maintenance, and finance costs. Judging by the fact that many of my co-workers are driving around in new cars with borrowed money, I’d bet this estimation is pretty accurate.
Assuming roughly 260 work days per year, they’d be paying $13,500 per year. Over a decade they’d be looking at $135,200. Now this is where I’m going to blow your socks off. It’s significantly more than $135,200 that they’re truly missing out on.
Those work commutes are really pissing away more than $171,500 over a decade.
- $52/workday is roughly $1,100 per month they could be investing.
- A conservative 5% annual return (remember the historical average is 7%) carried out 10 years
- Ending value: $171,500
Here’s the deal, whether you love your job, or you chose your living location based on good schools, or you took whatever job you could get after a layoff, whatever the reason, it’s not the commute that’s the problem. It’s what you choose to do during that time.
If you’re going to accept a commute for work, you must absolutely consider carpooling or some form of public transit.
Best of all, my employer incentivizes vanpooling by covering the majority of the cost of an official rented vanpool. This year, it’s fully covered. Previous years, I’d end up paying something in range of $30 per month. Still way better than driving myself.
You’d be surprised how many companies out there actually incentivize carpooling, especially in the big cities. However, even if it’s not company sponsored, I urge you to consider carpooling. Not only will you save thousands of dollars, but you’ll also be able to use that travel time to do other things you’d normally do around the house anyway.
Whether you’re reading the latest investment book, listening to a financial podcast, writing you’re next blog entry, doing stock analysis, or even sleeping, riding as a vanpool passenger provides that freedom. Yes, I’m a nerd. Those are the things that I do on my vanpool. The beauty is that I’d do them anyway, so knocking them out on the van provides me more time to spend with the family when I get home. I’m sure you can think of 20 things you do at home on any given day that you could knock out on the way home from work. As long as you’re making good use of the travel time, then in my book it’s no different than if you didn’t have the commute and were home an hour earlier each day.
Let’s be practical, commuting has become a way of life for the majority.
Remember, even carpooling with one person cuts your costs in half. You don’t need to cram like sardines into a 14 passenger van to realize the financial and time benefits. If you’re not currently carpooling you should do your best to determine what you’re true commuting costs are, or you can just use the DOT value of 58 cents per mile.
If I were to drive myself, my costs would come out to something close to what’s shown below. You can see that I’d be significantly lower than the DOT estimate. This is mainly because I paid so little for the car.