Apr 24, 2011 64 comments

Unleash your Inner Hasselhoff for Greater Riches

“I drive a pickup truck because it’s comfortable and sometimes I need to haul things on the weekend”

“There’s nothing in the fridge right now so let’s just go out for dinner”

“I’ve read that Mr. Money Mustache claims to save $94,432 every ten years by riding a bike, but I don’t HAVE a bike, so that’s not an option for me”

“It would be nice not to have to drive an hour to work, but it’s just so much hassle to move to a new house”

Whenever I hear people explaining some of the biggest expenses of their lives, they are usually expressed in terms of emotions, hassle, and fear of the unknown. They are afraid of making changes in their lives because they are imagining a great tsunami of pain and inconvenience washing over them as soon as they try to change the status quo.

Oh no! I can’t deal with the hassle! My life is already hard enough!

But guess what? You’re already IN the tsunami, Sukka! How much hassle is it to get up uncomfortably early every morning, rush through breakfast, drive on a crowded and/or slushy road, stare out the office window as day after beautiful day slips by, and maybe miss out on bringing up your own children because you and your spouse both work full-time jobs?

So you’re already an expert at dealing with hassle. You do it every day, and the reason you do it is for MONEY. If you have a job that you keep mostly because you need the money, you are a professional hassle-manager. Let’s invent a slick new word for it – you are a Hasselhoff.

As a Hasselhoff, you should probably start looking around at who will pay you the most for putting up with hassle. Right now, perhaps you make $60,000 per year, which is $28.84 per hour. After all taxes, let’s say that is about $22 per hour. You can advance to a better job, but maybe there are some other ways to use your time where you’ll get paid even more.

What about the pickup truck owner at the top of this article? He has a 2005 Ford F-150. He drives it to work as well as using it for weekend ‘hauling’ and even road trips. But in truth, the truck is only loaded up with so much stuff that it wouldn’t fit into a good hatchback car about 4 times per year. He drives 15,000 miles per year at an average of 17MPG. This costs him $3300 in fuel.

If Mr. Pickup could grow a bit of a Money Mustache and switch to a normal 5-passenger car that got 32MPG, his fuel cost would drop to about $1750… saving $1500 per year.

Now he has $1500 to spare, and 4 days per year when he can’t quite fit everything he needs to haul into his Toyota Matrix. That is $375 per day. He has to either rent or borrow a truck to carry this stuff, or pay for a delivery truck. And he gets paid $375 to do it. Assuming the borrowing takes 4 hours longer than using his own truck, he is getting $93.75 per hour for his Hasselhoff abilities, compared to the $22 per hour that he gets at work!

Now that you see where I’m coming from, you can see that you ALSO are getting a raise over your day job by going to the grocery store, and spending the time to get yourself a bike.

But what about the biggest hassle listed above, moving to a new house?

It sounds like a big project. But I’ve done it a few times (currently on my third owned house and 9th address including rentals over the past 15 years), so on the most recent move I actually kept a work log of how much time it takes to move. I included sprucing up the old house for sale (or rent), house shopping, getting a mortgage and going to two closings, packing up the old house, doing the move in a $50 rented Uhaul truck, and unpacking into the new house. Overall, it took about 200 person hours, equal to about one month of office work including commuting, or one month of the average American couple’s combined television watching.

If this couple considers themselves professional Hasselhoffs and is earning $22 each per hour, then the move costs them $4400 of their time. If they are buying and selling a $250,000 house, and they lose 6% in realtor commissions and other closing costs, that adds $15,000. Yeesh, that’s about 20 grand in total. Will they ever get that back?

The short answer is YES – making a move like this actually saves them about $1600 a month – enough to pay for the 20,000 in relocation costs AND have about $1450 a month left over to turbocharge their ‘stash! (I included the math to back this up at the bottom of this post so you can review the calculations).

Using my usual 10-year example, this family who moves closer to work will be about $256,000 richer after ten years, just for moving! This is a gigantic part of what anyone needs to retire.

My job as Mr. Money Mustache is to teach you that whenever you hear the hassle bell ringing and trying to sway your purchasing decisions, make sure you sit down with a calculator and see if it’s actually a hidden opportunity to increase your pay as a Hasselhoff. If you’d like some help with the calculations and some free entertainment to go with it, send me a comment with your own situation and we’ll see how we can increase your pay.

—————
The Math:

Their new house is within year-round biking distance (3 miles) of one job and medium car commuting distance (10 miles) of the second job. The old house was an average of 25 miles (40 mins) away for EACH person. Let’s assume they both still drive for simplicity.

Old situation: 80 minutes round-trip x 2 people = 160 minutes/day = 53 hours/month.
53 hours/month x $22/hour = $1173 per month of commuting time
Plus driving costs of 50 miles roundtrip * 2 people * 20 days/month * 50 cents/mile
= $1000/month of commuting costs
Total: $2173/month for commuting

New Situation: 10 car-minutes for the close worker + 32 minutes for the further one, round-trip = 14 hours/month = $308 per month of commuting time
Plus driving costs for (6+20) roundtrip miles per day x 20 days/month x 50 cents/mile
= $260/month in commuting costs
Total: $568/month for commuting

Savings: $2173 – $568 = $1605 per month
If you use $150/month of this to service the debt on the extra $20k of moving costs, you have over $1450 left over.

Previous Post: Springy Debt instead of a Cash Cushion Next Post: Having “The Talk” with a Current or Potential Mate

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Jeremy Day May 24, 2011, 9:31 pm

Hi MMM,

Found you on Jacob’s ERE blog. You will find most of us are quick to correct any wrong math.

$150/month will not pay off a debt of 20k in 10 years no matter what interest rate you use. 150×12 months = 1800 x 10 years = 18k.

Sorry to correct you. I still agree with your overall point. Just wanted to point it out.

Cheers,
Jeremy

Reply
- MMM May 24, 2011, 10:26 pm
  
  Hi Jeremy, thanks for reading!
  
  I definitely appreciate any math checkers out there since I do a lot of furious typing on various calculators when I write these articles.
  
  In that footnote you are commenting on, I meant that the $150 would more than permanently pay the interest on the 20k moving cost, if one were to borrow that amount.. not that it would fully be paid off after 10 years. The idea I meant to portray is that sometimes moving to a house with a higher monthly cost is actually cheaper if it cuts your monthly expenses more than the added cost of the interest on the debt.
  
  Does this make sense with that added explanation? If not I’ll just re-work the numbers in the article itself to avoid confusing future readers.
  
  thanks,
  MMM
  
  Reply
  - Jeremy Day May 24, 2011, 10:48 pm
    
    Oh yes, makes perfect sense. It is good to look at how big changes, such as buying a car or a house, can help bring down your overall expenses and help you save more in the long run.
    
    Ultimately, people need to review their finances on a regular (probably monthly or quarterly) basis, and take a big picture long term approach to making decisions.
    
    Good stuff!
    
    Cheers,
    Jeremy
    
    Reply
  - Damian March 3, 2015, 8:01 pm
    
    Maybe the US is different to Australia… but don’t houses increase substantially in cost as you move closer to the city?
    
    For a typical 3 bedroom house on a small section, Melbourne prices would start at several million USD within the inner 5km circle, then drop perhaps $50,000USD per km in a fairly linear fashion moving away from the city.
    
    On bike commuting distance… my (3x per week) commute is 37km each way, I ride with many others who ride around 22-25km each way daily… I’d almost consider 3 miles (4.5km) walking distance…..
    
    Reply
    - Chad June 25, 2015, 5:39 am
      
      Prices absolutely do get higher as you get closer to cities, but you’re over-simplifying here. The person might already live within a big city, or be commuting out of one, or into similar area that’s just distant. Obviously you need to look at the larger picture.
      
      But I would say 3 mi is at the fringe of walking distance. That’s about an hour long walk at typical speeds. At walking effort, your commute is a two hour affair. Now, you could run, or bike faster to eliminate time on either, but at the cost of increased effort. That’s not a light commute by any stretch. I certainly would consider moving up to something faster if I had to spend four hours a day getting to and from my job. Personally, I consider one hour maximum walking/biking distance. Whatever I can cover comfortably in that time is as far as I’m happy going via either method of travel.
      
      Reply
      - Wookey February 1, 2017, 6:36 am
        
        I thik that’s a very good rule of thumb. Actually when I had an hour long bike commute (55mins, 13 miles), I got fed up of spending that much time commuting after a while and got an e-moped instead to do it in 35mins, which was much better (but less excercise, and thus very cold in winter). An illegally-fast e-bike that you pedal would have been the best solution (legal e-bikes in the UK are no faster than cycling, annoyingly).
        
        So I guess my rule of thumb is actually ‘no more then 45mins’ whatever for of transport is used, preferably half an hour. (I’ve since changed job so my commute is 6 mins by bike, which is exceedingly civilised (but not enough exercise).
        
        Reply
    - Katherine November 6, 2018, 3:15 pm
      
      I agree with this. My hubby and I (us and urban based) could pay dramatically different prices were we to move outside of our city where the suburbs have wonderful public transit available for commuters. Currently, we walk 1 mile to work and bike everywhere else so we save a ton of money in our commute, at least $480 not factoring in the value of time saved. However, we pay at least $1000 more for our home, less sq footage as well. We selected a home with an English basement apartment and rent that out on short term rental which reduces our rent by about 60% therefore making it dramatically cheaper for us to live in the city with our ridiculously convenient commute than outside of the city. I think cost of housing is really important to weigh in this issue, but through careful consideration, we were able to work it out so that its to our benefit :)
      
      Reply
Oskar July 22, 2011, 2:49 pm

When we moved into our current house I included the transportation to and from work in the calculation of ‘total cost of housing’. We compared houses within walking distance, others within 15-30 minute distance but with public transportation alternatives and also some houses that were further away with 1 hour drive and no publictransportation possibilities. I out town it showed that the further out you got the cheaper the house but also the more driving, the options ended up being cost neutral and we ended up buying one about 15 minutes from work, as it was the house and the community we liked most. I think this shows you need to look at more than what the house costs when you are looking for a place to live.

Reply
- MMM July 24, 2011, 10:57 am
  
  This is a Very inspiring tale, Oskar. Most people drastically underestimate the value of their time and the cost of extra car ownership and driving when buying a house. If they did the math correctly, nobody would be car-commuting even 30 minutes to work except in rare cases like jobs in Manhattan which pay $300k per year and the housing prices drop by many thousands of dollars for every mile you get further from the employment center.
  
  Reply
  - Meadow June 4, 2012, 10:22 pm
    
    Yes what do we do if we work in Manhattan ?
    
    Reply
    - Mr. Money Mustache June 4, 2012, 10:45 pm
      
      If you’re following the principles of this blog, you’d find the best compromise you can between proximity and cost, live like a pauper, save up a shitload of money, then get the heck out of that area to enjoy a nice early retirement!
      
      Alternatively, if you really like the work and have nothing better to do with your time, you keep working, maybe spend a bit more along the way, and eventually end up with several more shitloads of money – a sufficient amount to pay the higher cost of living there indefinitely, even after retirement.
      
      Just remember, great jobs are often available in much less costly areas if you look around enough. Always do the math. Never drive an hour a day for something as commonplace as a sub-$100,000 job.
      
      Reply
      - Meadow June 4, 2012, 11:02 pm
        
        Ah! I see. I wasn’t sure if the idea of having a short commute was not in effect in/near Manhattan.
        
        Both my boyfriend and I currently make just under $100k each (for now). I commute over an hour a day by train and he commutes 45 minutes by car, but we are moving into Manhattan to a frugal apartment which is just minutes from my workplace, and he can ride his bike to work easily. We could virtually eliminate our transportation expenses which are currently eating up $500-1500 a month in train tickets, car insurance and gas.
        
        He’s unfortunately tied to the city (city job with pension) for the next 13 years, so based on your advice, our plan should be to save a shitload of money up for the next 13 years (and either me “retire” much earlier than him or we both retire at around 43-45). Even if we stay put, we might be able to retire here if we live as frugally as possible. Even here in NYC, the major costs are transportation and housing and once we no longer need to commute and our potential house is paid off, huge expenses will be gone but high part-time salaries could still be tapped if needed.
        
        Just thinking out loud. Thanks for the late night advice!! I gasped out loud when I realized that MMM himself had responded to my comment! We are totally on board with this ER plan.
        
        Reply
- Izak June 29, 2014, 1:38 pm
  
  Years ago when we bought our first house, we eventually ended up buying 20km away (in the next town) because real estate costs about double per square meter in the town where we worked. I remember my response was: for the difference, I can buy a car and two years of fuel.
  
  One big problem, unfortunately, is you never know where you’re going to work next. But this actually turned out okay for me. Four years ago something bad happened, which turned out to be a blessing in disguise: I lost my job. I was in the middle of buying a new house and there was no cash-cushion… so I called up all my friends, got enough work to do and about a month later I started calling back companies to cancel scheduled job interviews. I had accidentally started my own business. I now live zero km from work. We’re moving the kids to schools closer to home. I fill the car’s tank once a month, and it will last many more years. It’s a Diesel… downside, it’s actually more expensive than a Petrol because it does not save enough fuel to compensate for service costs. Upside: They are generally good up to half a million kilometers, and I’m at 100 000km now, so 40 years left in it… :-)
  
  Reply
Chris November 19, 2011, 8:36 pm

Just found this blog and I have to say I am enjoying it! However, I have a quick comment about the example that you use in this post. Your example seems to assume that you can replace the time you are commuting with hourly work that pays at the rate of $22/hr. But that is often not the case. I agree that people should value their time when trying to decide whether or not to live closer to work, but in the end, the savings you calculate in this post do not help with retiring early (unless of course if you can replace your commuting time with paid work).

Reply
- MMM November 20, 2011, 7:37 am
  
  I think your time after work is even more valuable than your time at work! See the later domestic outsourcing, the health=wealth, and the self employment articles for ideas on why.
  
  Reply
- Chad June 25, 2015, 5:53 am
  
  Alternatively, you can think of it this way.
  
  If you make $25/hour, and work an 8 hour day, you make, before everything, $200/day.
  
  But wait, you have a 1 hour commute each way, so you’re actually “working” 10 hours a day.
  
  So now you’re making $200/10 = $20/hour.
  
  But wait, it’s worse. You’re also consuming gas, and wearing down your vehicle during that extra commute, which eats even more out of that number. Using MMM’s numbers of $0.50/mi and 25mi in 40min at a one hour commute you’re traveling 37.5 miles one way, or 75 miles a day, five days a week, 50 weeks a year. That’s $37.50 a day of direct transportation costs.
  
  So now you’re making $200-37.50 a day, or $162.50/day
  $162.50/10 hours of “work” = $16.25/hour
  
  So, after taking in transportation costs and time, your $25/hour job ends up only paying you $16.25/hour.
  
  Reply
  - Convis July 30, 2015, 2:54 pm
    
    I like this way of looking at it chad! I was going to say that i disagree with the outlook that every hour of your waking life can be equated to dollars… If that is the mentality then why don’t we just take speed and never sleep and work constantly! I am joking of course, but the point i am trying to make is that these tradeoff’s we look at such as the $25/hr work wage vs: free time are an overly simplistic. We don’t have to fill every minute of free time we have in a day with money making activities. I think MMM is hitting on that health=wealth section
    
    Reply
- Jonathan May 31, 2017, 1:28 pm
  
  I had the same thought Chris. The calculation assumes that you are filling up the void of driving time with another hour of paid work. I get MMM’s premise, but I would only be calculating the lower fuel cost and car usage.
  
  Reply
Chris November 19, 2011, 8:37 pm

Forgot to mark the “notify me” box. Hope the discussion continues!

Reply
John June 26, 2012, 4:49 am

Hi mmm

I am really enjoying your blog… I am also a DIYer and solved the material hauling problem with a $200.00 4 by 8 foot utility trailer from harbor freight. I drive a 9 year old accord sedan with a trailer hitch. The trailer costs less than 30.00 to register and insure each year and it carries everything (drywall, plywood, insulation, core aerator, mowers, trees, etc.). It folds up vertically in the garage, taking up less than 2 feet of floor space. It is a far better solution than a 15 mpg pickup or suv….

Thanks for the inspiring website

John

Reply
- Mr. Money Mustache June 27, 2012, 2:58 pm
  
  Kick Ass, John! I am glad to hear the reassuring tale of trailer ownership. I mentioned the idea in this later article: http://www.mrmoneymustache.com/2011/12/08/turning-a-little-car-into-a-big-one/ but I have never owned a trailer myself yet. Sometimes I toy with the idea of selling my construction minivan and Scion Xa, and going to a single 2005 Prius with a trailer hitch. But with registration/insurance costs negligible in my area, and gas prices still fairly low, the numbers don’t quite justify it – especially since the van doubles as a hotel occasionally :-)
  
  Reply
  - Gerard January 11, 2013, 10:17 am
    
    Are you saying you wouldn’t sleep in a 4×8 utility trailer?
    
    Reply
  - Allen May 23, 2013, 6:33 pm
    
    Actual ‘hotel prius’ is surprisingly workable. I often sleep in my prius when I go to referee a Judo tournament. I use the prius as a hotel, wake up in the walmart parking lot, brush teeth/rinse off/change into referee outfit, do my thing and then drive home. It saves me literally $100+ every time I do it. The low cost of driving the prius to events saves as well.
    
    Also, if you want to be a wuss in cold or hot temperatures, you can run the Prius A/C or Heating all night long for very little gas as the engine only pops on to charge the battery. Sure, you could also tough out the weather, but if you don’t want to and don’t want it to fog up inside, it’s a MINOR marginal cost and a major savings vs a real hotel.
    
    http://cheapgreenrvliving.com/priusliving.html
    That was the website that motivated.
    
    Reply
The Perpetual Student July 14, 2012, 12:32 am

Holy Moly, Mr. MM, it would be great to share your posts and great writing with my counterpart, the Professional Musician.

We live where we live because it’s halfway for us. As a pro musician, he commutes all over our fine state of CO, teaching as far south as Castle Rock (!) once a week when we live in Longmont. I take classes and work in Fort Collins, but with my student pass I can take the bus a lot and save gas $$ that way.

I have barely any income at all, as a full-time student, and the Pro Musician makes not so much either. I want to grow a big ol’ ‘stash but it’ll be a challenge, as I’m going to start professional school this coming year (with luck) and will be racking up a monster amount of student debt.

I’d love to live close or bike or something, but the Pro can’t bike his drum kit up and down the front range. What to do?

Reply
Teacher Mom December 16, 2012, 9:13 pm

I’m starting at the beginning and reading through your blog tonight. My husband has a stressful job with a long commute (2 hours in the car per day, 5 days per week). Company provides the vehicle/gas (but only for 2 more years, then back to personal vehicle). A similar job in the same field and closer to home is currently available. He could walk, but would earn less and it seems like there would be less job security (subjective assessment, there). We are very tempted by the job change, but talk ourselves out of it because he gives up a pension if he leaves his current job. His pension allows him to retire in 15 years (at age 50) at the salary he will be making when he retires (probably around $85k). No pension with this other job opportunity. Is there any chance that changing jobs so that he can walk to work and generally have the flexibility that goes along with working near home would be a better alternative than the long commute with a higher salary and a pension? How would we figure it out?

Reply
- Mr. Money Mustache December 16, 2012, 11:54 pm
  
  Oh my goodness! Tell him to switch jobs tomorrow and never look back. Where we’re going, we don’t need ‘pensions’, and we retire well before 50! Read the later post called ‘the true cost of commuting’ (you can google that phrase).
  
  Reply
  - chrism January 19, 2014, 11:48 pm
    
    MMM
    
    I (43yrs old) live about 30 minutes North of Seattle. I currently work from home but only make approx $45 gross a year. My wife (45 yrs old) is a school teacher of 20 yrs and has about $120K in retirement. I only have $10K. We are debt free except for $300k mortgage. We have two kids, a 7th grader and 4th grader. She makes approx $62K gross. We do have approx $1,300/mo extra a month. I do love my job as I get to see my kids in the morning and I’m there when they get home at 4pm. I don’t get any benefits with my current job. I dilemma is I could change jobs (same industry) and possibly make as much as $20-$30k more a year with full benefits and take a bus to work which would be about 45min commute. What would you suggest?
    
    Reply
  - des February 1, 2014, 7:11 am
    
    I could tend to agree with you, especially if the job is stressful and he is not happy, but man giving up 85% of your salary for life would be hard, especially with only 15 years to go. I’d rather look to see if there are opportunities to find another department to work in (with less stress), even if it meant a little less pay.
    
    Also, it would depend on how much they had already saved on their own, but I’m guessing not much. I’d have to see the math, but it would mean they’d have to do a lot of hard core saving on their own which they probably haven’t been doing, so it’s even harder to achieve.
    
    Reply
- Jonathan May 31, 2017, 1:49 pm
  
  At the rate that the defined benefit pension plans are going, I can’t imagine that the employer would be able to actually make those payments for the remainder of life. Of course, that is a generality. I don’t know the solvency of your husband’s particular pension plan. But pensions nationwide are hurting under the weight of retirees, and will not be able to pay all the claims, in full, on time. Some have already slashed benefits drastically. Especially multiemployer plans. This is why I always assume that there will be no retirement money for me other than the money I make myself. Many people my age (late 20s, early 30s) that I know, also do not consider Social Security in our retirement calculations, for to similar income-outgoing problems.
  
  Reply
Bean February 12, 2014, 7:06 pm

My work is in an industrial area. The closest neighborhood is super ghetto. I just can’t bring myself to raising my kids in that area. Can I be forgiven for driving 30 min to work so my kids can grow up in a decent hood?

Reply
- Mr. Money Mustache February 13, 2014, 11:01 pm
  
  Sure, if that were really the only option, driving would be better than having kids grow up in a genuinely bad area.
  
  But I bet if you start looking around and considering all jobs, cities, neighborhoods, transportation options, cars, and houses, you might come up with a better situation than whatever you have now.
  
  It’s all about not closing the door on constant improvement. You’re stuck with a huge car commute FOR NOW.. but not forever unless you decide it is so.
  
  Reply
jenmalli April 22, 2014, 7:25 pm

Obsessed with you blog, MMM, and would love your help. In my former life as a financial idiot I bought a certified pre-owned 2007 car with a 3.84% interest rate, totally on credit. I currently owe $17500, but the blue-book value is only about $11,000. It’s an excellent Volvo with only 50,000 miles, so I’m thinking I should try to pay it off quickly and then drive it rarely so it will last forever. But does it make more sense to sell it at a loss and buy a cheaper car? It gets terrible gas mileage (16 miles/gallon) and will eventually probably require expensive repairs… Thanks for any advice!

Reply
- Mr. Money Mustache April 23, 2014, 6:23 am
  
  Yeah! I’d sell that behemoth whenever you can. Hopefully you will get more than bluebook due to the lower miles. But at 16mpg you are more than doubling your fuel bill over any reasonable car. That will make a big difference as you try to move ahead with your finances.
  
  Reply
  - jenmalli April 23, 2014, 12:16 pm
    
    Awesome! I feel freer already.
    
    Reply
Amazing Alice May 13, 2014, 3:12 pm

Hi Mister MM. I posted somewhere earlier, but forgot to tick the notify me boxes, sorry I going to ask again. What is your view on loans? I only have one buisness loan of $30,000 and we own every thing else. We have two buisnesses and are asset rich, cash poor. The loan in killing us and I find is near impossible to save and pay the loan. Should I really focus on the loan first and then save? Thanks

Reply
DB August 2, 2014, 9:53 am

Hi Mr MMM,
I love your blog! I wish I had found it years ago. I found it by mistake, but glad I did. I have this dilemma. I commute an hour to work (I live in the Los Angeles area). My rent is $1,400 and to rent closer to work would be $2,100. I make approx. $150K. I was considering buying property near the workplace, but decided that did not make sense, as I don’t know if I will stay at this job and want option to leave job easily. Homes (condo/townhomes) in the area close to work cost approx. $400 -450K and SFRs cost north of $500K. What would you recommend? I am single as well. Thank you!

Reply
- Mr. Money Mustache August 2, 2014, 5:32 pm
  
  Sounds like you could pay $700/month to save yourself about $800/month in direct commuting-related costs AND reclaim about 40 hours per month of your life, not to mention increased health and drastically reduced odds of dying in a fiery metal tomb. BEST BARGAIN OF A LIFETIME!! MAKE THE MOVE IMMEDIATELY!!!
  
  Reply
Cassie August 16, 2014, 12:53 pm

Hi MMM,

My husband and I are in a pretty bad situation. Though we are able to pay all of our bills on time, we are definitely on the treadmill. We have significant student loan debt as well as one whopping credit card balance. Recently my husband took a new, better job, but it is farther away—about 25 miles. Though we would save a lot of money moving closer to his work and biking, the houses in that area are more expensive than the one we currently live in. What is the better decision: (1) take the higher mortgage but save by biking to work, or (2) stay where you are and bike to work for 2 hours one-way? How does the math work in this case? I would bet you have a solution that I just haven’t thought of!

Thanks so much,
Cassie

Reply
- Mr. Money Mustache August 19, 2014, 9:51 am
  
  In general, you’ll probably save by moving closer to work. 25 miles each way adds to about $12,500/year in driving costs, so you could pay $1000/more in rent per month and still come out ahead. Plus, you get your time back which is worth even more than money. That might allow you to sell your car too, at least until the debts are paid off!
  
  Reply
Damian October 1, 2014, 3:06 am

So, what about a situation like Melbourne, Australia, where we save approximately $3472 in mortgage payments per month by living 37km from the city in a 4 bedroom house rather than 15km from the city in a run down Terrace?. You don’t seem to have considered public transport as a valid way to get to work, and $2/mile in incremental driving cost given US petrol prices doesn’t seem to make sense? Your income also strikes me as very difficult to live on in Australia with with staple food prices ($5US for a loaf of bread), a rough minimum of $16PA to rent a small 2 bedroom flat within the range of public transport, very low cost goods is somewhat of an American phenomenon. …

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aleksandar October 24, 2014, 2:30 pm

I just found out the articles and enjoy reading one by one.I totally agree with living close to work.I live and work(dentist) in the same building and its not only the money saving for traveling expenses but my clients also know that they can call me anytime and have some urgent treatment (out of working hours) and in the end there is the relax quality of life where if you have free 30-45 minutes you can have home nap or 13 o’clock lunch with the family (things that money can not buy)……..just sayin`

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Mark February 4, 2015, 11:07 am

A year after discovering MMM, our family of 8 decided to sell our gorgeous 3300 sq. ft. home on 2 acres out in the country because we were commuting 30 minutes round trip for everything (groceries, school, work, church, boy scouts, sports, etc.) and when we weren’t commuting or cleaning the house, we spent most of our time together in the family room. We found a 1600 sq. ft. rental in town with a nice family room, big yard, south facing windows, a wood stove, and it’s close to a park, bike trails, and lots of neighborhood friends. We LOVE it! Seriously, no complaints from anyone. We still spend most of our time together in the family room, but now have more of it because our commute and home maintenance / cleaning is less. We’re also outdoors together more, going for walks, bike rides, and playing at the park. We’ll save over a 180 hours this year of commuting time. That’s like 4 work weeks! Was it a hassle? Yes, big time. We moved during the holidays in a snow storm. Do I remember the pain? Yes, but it’s fading quickly. Do a lot of people think we’ve lost our minds? Yes. Would we do it again tomorrow? Absolutely. I’m so glad MMM gave us the insight and courage to put up with short term hassle in exchange for longer lasting benefits. We hope to find a place similar to our rental to buy, but maybe a little bit bigger (1800-2000) sq. ft. Thanks MMM.

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- Damian February 5, 2015, 4:50 pm
  
  30 minutes round trip commute?, thats almost nothing?… My walk to and from the city train station is 15 minutes each way, I really struggled to understand how a house in the countryside could be within 15 minutes of groceries, school and work unless you have a very different interpretation of ”country’
  
  Reply
  - Dillon October 22, 2019, 2:52 pm
    
    I live in the country – on 10 acres surrounded by horse pasture (not mine) and a nature preserve. While there’s a bar, a hardware store, and a party store within a mile of me, complete with a blinking light to help direct traffic during rush hour (ha!), it takes me 15-20 minutes to get into to “town” for the library, grocery store, school, gas station, post office, etc. 15 minutes if it’s on the west side of town – 20 minutes if it’s on the east. It’s 30 minutes to get into the actual big city of Ann Arbor. Am I desolate in the middle of Wyoming? No, but I wouldn’t think I’d need to argue that I’m in the country with anyone. The chicken poop in the driveway, deer eating my apple trees, lack of ANYONE who would deliver a pizza let alone an internet connection, and a gorgeous view of the night sky make that argument for me.
    
    Reply
Samantha March 1, 2015, 10:33 am

I’d love some insight into our situation.

We own a home valued at $175,000. We bought for $165,000 and currently owe $154,000.
It is a 3 bedroom home with approx 1300 sq ft of liveable space.
We have 4 children, so it is about as small as we can live in comfortably right now.

My husband commutes 3-4 hours round trip. He does have a company truck so we do not pay fuel, maintenance or vehicle payments for that commute.

Home of a similar size closer to his work (in the city) cost minimum $375,000 and would still have 1-2 hour commute because of city traffic. He works on job sites that are always changing.

We are right to stay in our current home, right?

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- Mr. Money Mustache March 3, 2015, 9:10 am
  
  Wow! That’s a tricky situation to be stuck with, although the company-paid driving certainly helps. I guess it depends on how much you value your time.
  
  Since time is now at the top of my list, I’d do whatever it takes to be within 10 minutes of the core of my work. Rent an apartment, live in a mobile vehicle, switch industries, states, or countries – no holds barred. But if you and your husband are happy with your situation as it is (free time, money, physical health, etc.), then you are probably doing the right thing.
  
  Reply
  - Damian March 3, 2015, 7:53 pm
    
    Within 10 minutes?… it takes more than 10 minutes to walk from a melbourne central city train station to an office building and go up the lift … (15 for me)..
    
    How is 10 minutes practical ?
    
    (it would be illegal to live in a mobile vehicle in the city in an Australian city, unsure about the US)
    
    Reply
    - Chuck March 7, 2016, 2:01 pm
      
      RV parks everywhere in Washington state. There are two RV parks on Joint Base Lewis-McChord (JBLM) military base in Tacoma. There are other places within a short bike ride to the base and local businesses. A friend bought a mobile vehicle in Oregon (No sales tax and his home state). Parked it at the base for $400 a month (closest civilian park is $425 with less amenities). Writes off the cost of the RV and associated fees since he needs a place to live while working in Washington. Our job is 50% stateside and 50% overseas with the US Army.
      
      Reply
Damian March 3, 2015, 7:46 pm

Hi MM,

I’d love to know your opinion for those living somewhere with somewhat higher costs of housing and living (Melbourne, Australia in this case).

We own a house, effectively fully offset due to inheritance monies and savings (so we’re paying no interest), thats an unusually lucky situation here given that our house is worth around $390,000 USD at todays exchange rates (half a million AUD, with the exchange rates of a year ago, half a million USD).

We live around 30km from the CBD, I work in the CBD and typically commute by bike (37km via mostly bike trails each way) 3x a week and by train the other 2x a week. (biking 4km to the train station each way)

My wife works around 35 minutes drive in another direction, with no public transport options and thats beyond her cycling capacity (especially while pregnant)

We live in one of the cheapest areas of Melbourne and have a reasonable sized house (4 bedrooms with a park over the back fence), house prices within 10km of the CBD exceed $1 million USD for run down terraces, with minimal light, no parking, no land etc and signficantly more for a house and very little access to ‘the great outdoors’ (this is nearby for us now), we currently have one child on the way. (I used to live in a one bedroom apartment 10km from melbourne CBD, this was worth approximately $420,000 USD and rented for around $300 USD/week)

There are very few jobs in my line of work outside the CBD (Software architecture) and, given the cost of living in Australia (A recently study found that a loaf of bread in melbourne approaches $5 US, petrol about $4.50 US a gallon dinner out for two, is generally over $80 US, consumer products like levi’s jeans are generally twice the price locally as they are in the US)

We are limited in any required house renovations in that anything remotely electrical, structural or plumbing requires the services of a certified professional at over $100 USD/hr rates (this is required by law), so DIY is limited, as such a recent (needed) straightforward kitchen rennovation with new appliances cost us $26K USD, our house still requires some refit of the non ensuite bathroom to be suitable for use in future (children)

Australian cities are very centralised, Jobs, other than service industry and manufacturing (basic labour) are rare outside of the major CBD areas, these roles would be a large drop in salary. (Could be as low as $28K USD after tax for me, plus i don’t have the skillset/work history) Regional cities and other such areas have major unemployment problems.

Currently we earn (at current exchange rates) around $137K USD a year combined, after tax this drops to around $100,000 US per annum. With a child on the way, this will drop to around $60,000 USD after taxes per year while my wife isn’t working from a couple months from now. (And may remain such with childcare costs around $160 USD per day, per child in australia)

On top of the house and two vehicles (a cheap 12 year old small Toyota and an 11 year old nissan van, used to transport bikes and comfortable for longer trips (Visiting relatives is a 140km trip for us, and I’m over 6′ and feel very cramped in the smaller car), we have maybe $40K AUD saved. I have a couple of bikes since i tend to brake spokes and such with my kms being 250lbs+

Cycling 3x per week plus short train station jaunts leaves me at about 220-240km a week cycling and starts to cause fatigue if i increase it much more, especially with hills on the way to the city.

Time however is precious, I typically leave home at atound 7:20am and arrive home around 7:30pm 5 days a week, timetimes arriving home at 8:30 or later, just from work+commute. (9-6:30 is typical in my office and many others here)

A very basic 3 bedroom house half the distance from the city (around 15km), would cost well over $1 million USD, even in less desirable locations, simply outside our ability to service the debt even if we were willing to borrow (interest rates are higher here than in the US). (baby boomers and substantial foreign investment in housing has caused a massive housing boom in australia).

It’s hard to see a way to have enough money aside to cover forward costs of living enough to retire early, especially as costs of living continue to increase and basics (unbranded clothing, food staples etc) are a lot more expensive here than in the US.

Any thoughts on how to follow the MM approach without the US advantages of super low cost basics/staples available, lower cost housing, secondary cities that actually have employment, shorter distances to travel (The next big city here is Sydney, 1000km away)….?

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Urbanista March 3, 2015, 9:17 pm

Damian, you might want to post your case-study on the Forum, where we have a bunch of Aussies hanging around. In my view, early retirement is possible in Australia. But forget about a short commute! (if you have young children and work in the CBD).

We are in a very similar situation in that we are professionals with 220K AUD gross (incl.super) income, living 25 km from the CBD. DH works in the CBD (over an hour commute by car & train), I used to work in the CBD as well, but had to sacrifice and move to work in the suburbs when our son was born (30 min commute now). We have no mortgage and will be financially independent in 4 about years.

How we have done so far:
1. I got back to work after a 12-months maternity leave. Duh. I have marketable skills, but they are going to be completely wasted had I stayed home for longer than 12 months.
2. Child care in Melbourne’s outer suburbs is actually a lot cheaper than USD $160 per day. Our centre charges AUD1200 per month for 5 days a week 12-hour days (this is out of pocket after government CC rebate).
3. We salary-sacrifice into super and get about AUD9600 back in tax.
4. Otherwise, we spend about 40K a year, not counting childcare and holidays. Obviously, we have no rent/mortgage cost but are not very mustachian (2 cars, 4-bed house).

What I suggest you do:

1. First of all, even if you are left with USD 60K net income after taxes, you can still save at least one third of it. Spending USD40K for a family of 3 is plenty, if there is no morgage.
2. Your wife might want to get back to work part-time after 12 months maternity leave. Child care is much cheaper if you send your child to a CC centre on a part-time basis. It will cost you about $50 a day after the CC rebate. Your wife should be able to earn USD20K a year after tax and child care fees. That way you can increase your savings rate to 50%. Also, don’t forget super: even employer contributions only should be at least $AUD8000 per year after tax. That will bring your savings rate to roughly 55% overall.
3. Since you have no mortgage, do salary sacrifice into super. Maybe not full 30K, but add 5-10K per year and save on tax. Bring your savings rate even higher. Make sure your super is invested in a low-cost index funds.
4. Invest your savings into index funds, such as Vanguard.

With a 50% savings rate, you should be financially independent in 16 years
With a 60% savings rate, you should be financially independent in 12.5 years

That’s how we are going to solve the issue of the long commutes: don’t go to work at all!

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Marcia April 19, 2015, 7:19 am

Another key point to consider in this conversation is for those of us whom have managed to reduce or eliminate our commuting time (i.e. moved closer to work to reduce my commute to 20 min), DON’t replace the time saved with more work for those of us whose goal is to have more time with family. Moving closer to work allows me to leave at 430 vs 5 PM because I now get in earlier, but I have had to force myself to shut down at that time vs working to 5 like I have previously. Some people don’t like it and are addicted to work, but I am learning to not let that be my problem since working longer is not always equivalent to getting more done! I work efficiently then like to head home and cherish the extra time I have with my two children and remember the value of this extra time with them. I am finding just an extra 30 minutes of quality time has been life altering for me because it is just focused on my family!

Marcia

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TrainCommuter July 1, 2015, 8:19 am

Hi MMM,

I was pointed to your blog by my boss at work, safe to say I love it. I’m now excited about saving. I already decided that I am going to ride my bike everywhere and avoid driving as I have no need for it. Can you believe I was driving to the train station about a mile from my house in a 17mpg SUV and paying $3/ day for parking. I was also driving 3 miles each way to church 4x/week. I look forward to seeing those savings add up over time.

I’m 25 Single and live with my parents in a nice house. I work from home 2-3 days/week and commute by train the other 2-3 days at a cost of $19.30/day. The job pays well. Plus when I’m on the train I am able to read/study, etc. Am I crazy for thinking that I wouldn’t give up my job to try and find one closer to home. I’m able to work from home 2-3x per week. Sometimes I ride in with others for free. I understand that the commute seems crazy, but it’s really not that bad because I have my hands and my brain free. I’ve read the true cost of commuting article but a lot of those calculations don’t apply to train commuting. As you still have the time and the cost is less than driving.

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Slee July 7, 2015, 8:03 am

I don’t see an improvement opportunity, but maybe someone will chime in. We live in the center of a city and were fortunate enough to buy in the right neighborhood at the right time. This gives my wife about the shortest commute time possible (barring working from home). For me, however, I commute 28 mi each way to work. On average I spend 80-90 min driving each day. Obviously biking is not feasible as I’d bump my commute time to 4 hours a day. Moving towards my job would increase my wife’s commute and we all know you don’t mess with a happy wife. I make a reasonably good salary at my current job and, overall, its not a bad / stressful one. I guess the only option is one of us changing jobs, but her job is actually a good one as well and she is already located perfectly. That leaves me as the only one who really has the option to switch. I guess I’ll start hunting. Are there any other obvious things I should be doing that I’m missing?

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David Herr August 29, 2015, 10:57 pm

Just a couple of thoughts on the math here — most of that $20K moving cost should not really be regarded as an out-of-pocket expense for which you have to borrow.

Unless you have to take unpaid time off work to move, moving is something done on one’s free time. If 400 person-hours (200 for each spouse/partner) are required to drop one’s commute cost by $1600/mo, then the proper frame of reference is not to value those hours at one’s work pay, but rather to value those hours at the return they generate, compared to other leisure activities you could have done. Few leisure activities are worth what a $1600 monthly savings grows into over 10 years at 7%!

Second, as to the costs of selling the old house: unless your house is underwater and you have to put cash on the table to close, the commission is deducted out of the sales price, so yes, it’s money you won’t receive on the sale of your old house, but since the cost of selling is always embedded into the value of a house, that money was never available to you anyway. The true out-of-pocket cost to sell is whatever you have to spend on materials and outsourced labor to prepare the house for sale, and the costs of packing and hauling. A pittance compared to the commute savings.

Being in commercial real estate, I have to drive a lot. At least I work from home, sparing myself office rent (and taking a home office deduction against both income and payroll taxes) and an office commute. If I ever expand my practice to merit a separate office, it will be one very close to home. The savings from no office commute saved my buttinski during the recession, when my income dropped a lot.

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Catie H July 13, 2016, 2:49 pm

Any thoughts on living close enough to take the train (vs bike)? We live in a nice part of the city, but my husband would have to bike through some dangerous and crime ridden parts to get to center city for work. The train costs us monthly, but it is a relatively short commute and he enjoys the walk before and after the ride.

Thoughts?

Thx

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Mustafa April 19, 2017, 2:28 pm

Expressing time in units of money definitely makes sense, because it should be factored into these calculations, but should it be in any way correlated with how much you make at work? If my employer offered to pay me my usual hourly rate to work longer, I wouldn’t do it. In fact, I would work less hours and make less overall if I could, but I didn’t come up with the US’s ‘work week’ social construct, and I need to be employed in my area of work to make enough money to live in the US.

I realize the numbers you are calculating are meant mostly to get a ballpark figure that puts a decision in perspective. However, if you attempt to answer questions such as “Will the amount of money you save be enough to pay off $x amount of debt”, accuracy is important. If that $22 an hour is based on a wrong assumption, then the numbers you are calculating really have no meaning.

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MJII August 27, 2017, 12:26 am

Great ideas… and good advice. I currently have a rental property that is outside the city I work in. I rent it out and live in another city where I rent a room for dirt cheap. I am about to buy another property and rent it out as well. What you’ve inspired me to do though is to find a room for rent (or half a room and live like a student/like I did in college) and thereby be able to walk or bike to work, walk or bike to the gym, etc. It drastically improves quality of life with a short commute or with a walk-able, bike-able commute. I’ve done it before for a couple of months. It feels amazing.

Not to mention all the money you’re saving, but you also get the health-benefits. Right now I am spending about 12.5 days of my life IN TRAFFIC COMMUTING. Although I do listen to self-development tapes or learn vocabulary words that is time of my life I could be using more constructively and time I am never getting back. So your blog is golden. I am going to apply this stuff to retire early.

Thanks!

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- Mr. Money Mustache August 27, 2017, 6:53 am
  
  Great plan MJ – there’s no such thing as dirt cheap living if it comes along with the highest cost of all – car commuting!
  
  Reply
Bry October 3, 2017, 7:42 am

I am so glad a co-worker showed me your blog. I stumbled across this post and its exactly what i need to see. Here is my current scenario. Any advice is greatly appreciated !

Current: Living in the city renting with roommates 2 miles from office.
Current Situation 60 minutes round trip= 60minutes/day= 20 hours/month (by bike or subway-paid for by employer)
20 hours/month x $23/hour= $460/month of commuting time.

Potential NEW: Buying my first home 50 miles away from my office.
New Situation: 150 minutes round trip= 150minutes/day= 50 hours/month
50 hours/month x $23/hour= $1150 per month of commuting time.
Plus driving costs for 100 miles per day x 20days/month x 50 cents/mile =$1000/month in commuting costs. (not covered by employer)
Plus tolls of 18$ x 20days/month = $360 (not covered by employer)
TOTAL: $2510.00/month for commuting
LOSS $460-$2510= – $2,050.00

My lease is ending shortly so its either a mortgage (with 100 miles round trip commute) or renting on my own with no roommates(4 mile round trip commute). Renting alone would be more expensive dollar amount per month versus a mortgage payment. Any suggestions?

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Armando Jr. April 23, 2019, 11:05 am

I currently make 60k and it’s a 50 min drive from home. Should I take a 40k job that is only less than 5 min from home? Any advice would be awesome. I’m 29 and looking for self financial awareness, and this website does a great job of answering most of my questions.

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Marshall November 19, 2019, 10:34 am

Hello, MMM.

I’m a newcomer here and reading through your blog like crazy. I’t inspiring and paradigm-changing. I currently live in Austin, TX and pay rent of $1400/month for a 2-bedroom condo a 10 minute drive or 30 minute bike ride from my job. My employer has a relationship with public transit, so I ride for free every day. This system extends to nearby communities within a 40 minute drive or 1 hour train ride (during which I could do my own work).

These other communities have property prices half of what I could find here. I want to buy a house, but at my current household income of $50k, I feel my only options for even qualifying for a mortgage are in these communities. Because I could commute with $0 out of pocket expenses and and get a more affordable house out of town, does that make sense as a choice of residence?

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Randy December 29, 2019, 5:32 pm

As far as the pickup truck goes, most people I know only haul stuff a few times a year, like you noted. I opted for a trailer hitch. Cost around $150 and just bolted on our car. Uhaul rents trailers starting at $15 a day. No insurance needed as our policy covers rentals. I rent about once a year. Another option is to rent a truck at Home Depot if you only need it for an hour or two.

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Andrey October 25, 2020, 6:09 am

This is stupid. Spending time commuting doesn’t cost you anything, you are not saving or spending 22p.h during that time.
Your time is valuable only while you get paid by your employer.

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- Mr. Money Mustache October 25, 2020, 9:33 am
  
  Thanks for pointing that out, Andrey! … but what if there were something MORE VALUABLE we could do with our spare time than complaining on Mr. Money Mustache’s blog? Perhaps various activities that generate even more value per hour than our main job?
  
  https://www.mrmoneymustache.com/2012/10/18/why-your-time-is-worth-way-more-than-25-per-hour/
  
  Reply

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The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!

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