December 7, 2020
Americans drain a huge portion of their income on transportation.
It eats up roughly 16% of our income every month, the majority of which is spent on car purchases ($331 per month), then gas and oil ($176 per month), and then insurance ($81 per month).¹
But what if you made that money work for you?
Here are some simple ways to spend less on getting around, so you can save more for your future!
Drive the speed limit
Speeding is never a good strategy. Zipping around town with your pedal to the floor is dangerous for you and others and realistically doesn’t save you much time.¹ Even worse, speeding can cost you money in the long term.
Obviously, speeding tickets are expensive. They cost about $150 on average.² They also have a nasty habit of increasing insurance premiums by up to 25%.³ But that’s not all. Rapidly accelerating and suddenly stopping reduces the efficiency of your engine and can cost you at the pump as well. Stick to the posted speed limit, accelerate gradually, and drive safely!
DIY the basics
There are plenty of car maintenance basics you can handle from the comfort of your own garage. For instance, a new air filter can boost your gas mileage by up to 10%.⁴ They’re also cheap and usually easy to change out once they get dirty. Even something as simple as inflating your tires can boost your car’s performance.⁵ Remember to do your research and consult your car’s owner manual.
Take the bus
If public transportation is available, use it! Research says trading your car for a bus or train can save you over $10,000 annually.⁶ The cost of tickets and metro passes pales in comparison to car insurance premiums, car maintenance, loans, and gas.
Don’t have access to public transportation? Stick with used cars and drive them as long as you can.
New cars almost always lose value. By the end of their first year, a new ride will shed 20% to 30% of its value. Over 5 years it loses 60% of its value.⁴ Unless you’re restoring a vintage masterpiece or have cash to blow, you’re much better driving an older model of the same car for a fraction of the price.
Remember, how you get around is a practical problem. It doesn’t need to be fancy or flashy when you’re starting your journey towards financial freedom. Utilize local transportation options, buy a clunker that you maintain yourself, and drive the speed limit. Your wallet will thank you in the long term!
¹ “The Average American Spends Way More on Transportation Than You’d Guess, ” Christy Bieber, The Ascent, Apr 28, 2020, https://www.fool.com/the-ascent/credit-cards/articles/average-american-spends-way-more-transportation-youd-guess/
² “The True Cost of a Speeding Ticket,” Lars Lofgren, I Will Teach You to be Rich, https://www.iwillteachyoutoberich.com/blog/cost-of-speeding-ticket/
³ “Managing the Hidden Costs of Car Depreciation,” Nicole Arata, Nerdwallet, Jul 17, 2017, https://www.nerdwallet.com/article/insurance/auto-insurance-rates-after-speeding-ticket#:~:text=Car%20insurance%20typically%20goes%20up,clean%20record%2C%20our%20analysis%20found.
⁴ “Changing Your Air Filter Can Improve Your Gas Mileage,” Harris Tire, https://harristirecompany.com/changing-your-air-filter-can-improve-your-gas-mileage/#:~:text=A%20clean%20air%20filter%20can,a%20typical%20tank%20of%20gas.
⁵ “The Importance Of Proper Tire Inflation,” AAA, https://www.aaa.com/autorepair/articles/the-importance-of-proper-tire-inflation
⁶ “Public transit users can save $10,160 annually, says APTA report,” Metro, Jun 8, 2018, https://www.metro-magazine.com/10032643/public-transit-users-can-save-10-160-annually-says-apta-report#:~:text=Individuals%20who%20ride%20public%20transportation,more%20than%20%24847%20per%20month.&text=The%20savings%20are%20based%20on,owning%20and%20driving%20a%20vehicle.