Are you ready to kick start the new year with a bang?
To help you do just that, I have put together a month long financial boot camp, with one or two tips per week and a call to action. Together, we will review several aspects of your financial life to make sure you start the year in good shape.
We have already looked at your utility bills and I put together
Then, we talked about how you can reduce one of your biggest expense: your mortgage, and how you can challenge your council tax banding.
We also lowered your grocery bill. Today, let’s look at how we can save on the transportation department.
Are you paying too much?
Do you use your car every day when you could take the bus or walk?
Do you NOT use your car but still pay for a parking space, insurance and repairs?
Do you have two cars or more?
If you answered yes to one of these questions, you are probably paying too much on transportation.
How to lower your transportation costs
Unlike the previous installments of this series, where it was just about making a phone call to lower your bill or writing a letter to challenge your council tax banding, lowering your transportation costs is an ongoing effort. It is about changing your habits to
1. walk, cycle more
3. get rid of your car if you don’t really need it.
How much are your transportation costs?
I ran the numbers over at Reach Financial Independence, explaining that I didn’t own a car until I was 29, and it saved me at least £30,000 over 10 years. Yes, that much money. Your car costs a good bit. Then there is insurance, petrol, your parking space, maintenance, repairs, spare changes, MOT, tax disc…
I did have a parking space, but I rented it for £80 a month, or £960 a year. Would you rather have £960 paid to you or pay £3,000+ a year to own a car? With that money, I was able to rent a car every time I needed one. Enterprise has a weekend rate under £40, to rent a small car from Friday morning to Monday morning. Three full days to run all the errands, twice a month, for the price of my parking rental. No insurance, no worries, no maintenance. They even pick you up!
Back to the cost of your car. Unless you are commuting to an industrial estate with no bus service half an hour from home, let’s compare it to
1. Walking/cycling to work and renting a car once or twice a month.
2. Using the train/bus and renting a car once or twice a month.
Is the convenience really worth the price tag? In Guildford, most people can afford a nice car, however, the commute to London is long and painful, so they just sit on the train for 35 minutes, read a book, and get to their destination rested. No traffic, no car breakdown when you least expect it, just a (mostly, the train line isn’t perfect) smooth ride.
Walking and cycling to work
I was lucky enough to find a job before I looked for a place to stay, so I was able to live less than 10 minutes away from work, cycling. Some of my colleagues lived even closer, but took their car to work.
Remember that even if you run an errand on the way back or have a parking space at work, you are still spending a lot of money commuting by car every day. If you like cycling, check out the cycle to work scheme, that allows you to buy a bike tax free in 12 interest free installments via your company. I did that and saved about 40% off the price of the bike. You will need proper gear to commute in winter when it is dark and cold, a light, rain pants, gloves… you want to be as comfortable as possible or you will give up in a month.
Taking the bus or the train to work.
Most of the time, working out the train or bus schedule is not that complicated. The train can be expensive, but if you sit there, it is warm, you can read a book or get ahead on your work and leave earlier, or get back home ready to rest and forget about work. Most towns have a good bus network, and in big cities like London, it is a much cheaper and efficient way to get to work.
Getting rid of your (second) car
Most members of my family used to have cars in Paris, until it became an absolute nightmare to park. You could either go around the block for half an hour looking for a space, or pay exorbitant amounts to rent a parking space. Now they use public cars, that you can rent by the half hour for a small fee, or traditional rental cars to go on holidays. It is much cheaper than maintaining a car for the whole year. You do not need to worry about renewing your tax disc or taking a day off to go to your MOT appointment.
And you will always get a clean, functioning car, that has lower odds of breaking down than your old car.
Once you get used to public transportation, you may want to try it for long distance and your holiday bookings. When my family came to visit, I booked their train tickets from London to Edinburgh a few months in advance, two adults, three kids… for a grand total of £35. I know, that cheap.
Get a Family card, a Young person card, any train discount card if you are going to use it often. And an Oyster card if you use TFL in London.
I also use Megabus a lot, and have paid as little as £10 to take the bus to Paris, and £2 to Scotland. Then once you get there, you can rent a car if you need. Let someone else do the heavy driving.
Action for the week
1. Add up your transportation costs. Car loan, or purchase price divided by 10 years of use or so, insurance, petrol, MOT, tax disc, parking, additional expenses like carwash or tolls…
2. Look for alternative options. Ideally, getting rid of the car, renting the parking space, commuting by foot or bus, and renting a vehicle for your holidays. Otherwise, there is carpooling with a colleague to share expenses, getting rid of one of your cars, taking the bus twice a week and the car three days, cycling in summer etc.
3. Get a bus pass or a train discount card otherwise it may be just as expensive as your car
5. Drop me a line and let me know how much you saved 🙂
It will take you some time to fine tune your commute, but think about the money saved and that should motivate you. You will also be healthier, fitter, and spend less time taking care of your car. Good luck!