I am stuck on a cross-country flight. Proceed at your own risk. Before proceeding, be sure to take precautions. Haha. It was a game-changer for me when I decided to commute this way. It has allowed me to use my time more effectively and taken the stress out of daily commute.

To save money, check it out and do the calculations on your own. When you crunch the numbers, you’ll be surprised at how much you can save. It’s super simple.

I live in Chicago, which is one of the top 5 worst cities to commute to work in the United States according to Trulia’s study on best and worst commuting cities.

A lot of people who commute to work spend a lot of money on gas and car maintenance, as well as parking. Commuting can be time consuming and expensive, but many people find the convenience of having their own vehicle outweighs the costs. Many people pay tolls and train commute costs are increasing. Many people look for ways to save money by using public transportation or even biking to work.

I was chatting with my friend Sam, who rents a parking space downtown for $150 a month, but the company that owns it wants to increase the monthly rate to $250. Sam is not happy about that huge increase in cost.

He asked me how he could save money on his commute, because the extra $100 a month will really add up. I suggested that he look into taking public transportation, as it could be cheaper than driving his car every day. To calculate his best option, we need to look at a few different scenarios. Before making a decision, it is important to consider the long-term implications of each scenario.

It comes down to time and money. It’s important to make the most of time and money. This question definitely does, but we will not everything.

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## How to determine your true commuting costs (and save money)

### First, we need to determine what his hourly rate is (including commuting time)

How much money do you make per hour? Knowing how much money you make per hour is an important part of budgeting. It is probably less than you think. You might be pleasantly surprised if you take some time to estimate the cost. Most people calculate their hourly wage by dividing their annual salary by 50 weeks and then 40 hours a week. It’s important to remember that not all jobs are based on a 40-hour work week.

Their commute time is what they miss. This time could have been used to relax, listen to music or read a book. If you want to calculate your hourly rate, you need to factor in how long it takes you to leave your house and return to the office. Adding this time into your calculation is necessary because it is the time you are spending for your job. You should consider any additional time spent on the job outside of what you initially scheduled, such as responding to emails or attending meetings. Many people are surprised by how this changes their hourly rate. Their financial situation can be impacted by the change in their effective hourly rate.

So if Same makes a $90,000 a year salary, let take a look at his hourly wage with and without commuting. This simple calculation can be used to replace $90,000 with your salary.

Hourly rate without commuting

$90,000 / 50 weeks = $1,800 a week / 40 hours = $45 hour x 0.70 (because he pays approximately 30% in taxes) = $31.50 per hour

Since this will make our savings calculation easier and who doesn’t want to know how much money they make per minute, let’s quickly determine Sam’s per minute rate. It would be difficult to gauge the progress of Sam’s project without this information. $31.50/60 = approximately $0.53 per minute

It blew my mind when I first did this calculation. It’s just a drop in the bucket now that I make more than double that. For a minute of my life, I was making $0.29. I had to keep going because I knew it wasn’t worth it. I knew I was worth more. You are too – here’s how to hack your boss and get a raise or build a profitable side hustle so you can increase your per minute compensation!

Hourly rate with commuting (approx 90 minutes commuting time every day)

$90,000/50 weeks = $1,800 a week / (4o hours + 7.5 hours commuting = 47.5 hours) = $37.90 x 0.70 (keep after taxes) = $26.53 per hour / 60 minutes = approximately $0.42 per minute

Sam makes $0.42 per minute at his 40-hour per week job. Commuting reduces his compensation by 20%. He is able to save money and time because of his commute. That’s an expensive commute!

## How to save money commuting

### 1. Driving (with parking space)

Sam rents his parking space from time to time for $150 a month. He is looking into ways to save money. It is the fastest way for him to get to work. He thinks taking public transportation is the best option for his commute. For the sake of simplicity, we are not going to include car depreciation since sometimes he uses his car and other times his motorcycle. Taking into account the fuel cost and parking spot fee will give us a good idea of how much his daily car commute is costing him. We will use gas. We will try to reduce our carbon footprint by using renewable energy sources, but we will also use gas as an alternative.

Time to the office and home (round trip commute): 40 minutes a day, or 200 minutes per week, or 800 minutes per month

The cost to commute in a car per month:

Time: 800 minutes per month * $0.42 per minute (Sam’s salary) = $336

Gas: Approximately $80 per month

Parking: $150 per month

The total cost is $566 per month. The cost doesn’t include the cost of meals, tolls, or any other things that may happen during the commute. That adds up to $6,792 per year to get to work.

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $6,792 per year/$63,000 salary = 11%

### 2. Uber-Pool

The second option Sam is considering is pooling to work and initially believes he will save money but let’s look at the numbers. He is going to crunch the numbers to see if the strategy will be a cost-effective way to get to work.

Time to the office and home (round trip commute): 90 minutes a day, or 450 minutes per week, or 1800 minutes per month (that definitely adds up!)

The cost to commute using Uber-pool per month:

Time: 1800 minutes per month * $0.42 per minute (Sam’s salary) = $756

Total Uber fee: Approximately $10 per day = $200 per month

Gas: $0

Parking: $0

The total cost is $960 per month. All utilities are included in this cost. That adds up to $11,472 per year.

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $11,792 per year/$63,000 salary = **19% **

### 3. Bus & Train

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Time: 1800 minutes per month * $0.42 per minute (Sam’s salary) = $756

Total transit fee: $5 per day = $100 per month

Gas: $0

Parking: $0

The total cost is $856 per month. That adds up to $10,272 per year.

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $10,272 per year/$63,000 salary = **16% **

### 4. Walking

If you can move closer to work, then you should definitely consider it, as I have found it has saved me over $50,000 in the past 5 years. You could put that money towards your retirement fund or invest in a house closer to the office, which would give you even more savings. Sam is too far away to walk to work. It would take him about 3 hours a day to walk to work. He would be spending 60 hours a month just to get to work. Walking burns calories and makes you healthier, so there needs to be some calculation to determine how the workout offsets the cost. It’s important to take a short walk during your lunch break or after dinner to make sure you are walking regularly.

The cost to commute walking per month:

Time: 3600 minutes per month * $0.42 per minute (Sam’s salary) = $1,512

Gas: $0

Parking: $0

The total cost is $1,512 per month. All utilities and taxes are included in the total cost. That adds up to $18,144 per year.

The benefits of the exercise are shown in the % of after tax salary spent on commute. It could be worth the cost if you consider the time and money saved in the long run.

### 5. Biking

Cities are not designed to make it easy to get around on two wheels as more people are biking to work. Bike lanes are being built to keep cyclists safe and make it more convenient for them. Sam can only bike to work in Chicago about 70% of the time. He compensates for 30% of the year by taking public transportation. If he could bike all year, it would be the cheapest option for him. It’s possible that some areas don’t have the right conditions to bike year-round. It would take Sam about 60 minutes a day to bike to work. He would need to plan ahead and make sure he has the right gear for the job.

The cost to commute biking per month:

Time: 1200 minutes per month * $0.42 per minute (Sam’s salary) = $504

Gas: $0

Parking: $0

The total cost is $504 per month. All taxes and fees are included. That adds up to $6,048 per year.

$6,048 per year/$63,000 salary is the % of after tax salary spent on commute. Spending 10% of your salary on commute can be beneficial in the long run.

## Conclusion

We have a lot in common if you made it this far. Let’s get to know each other better. Let’s take a look at the results and seeif it makes sense for Sam to pay more for his parking space. We can come up with a plan of action for Sam to get the parking space he needs.

1. Biking: $504 per month

2. Driving: $566 per month

3. Bus % Train: $856 per month

4. Uber pool: $956 per month

5. Walking: $1,512 per month

So…. Sam can pay up to $299 more per month for his parking spot and will be saving at least $1 compared to the bus or train. He thinks that the additional expense will be worth it in the long run.

He thought it would be cheaper than it is. The ride was more expensive than he anticipated and he had expected to save money. It will be cheaper for Sam to drive. The environmental impact is reduced by using the pool, the bus, and walking. As they reduce costs and congestion on the roads, public transportation and rideshare services are great alternatives to driving a car. The carbon offsets of the commute methods would add more value to this calculation. I didn’t consider the environmental benefits of different commute methods. You can either bike or walk.