Lifestyle

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How to Save Money on Cell Phones

Posted on by David

The average cell phone costs $471 and the average premium phone costs over $1000! According to a Time Magazine poll, 84% of people surveyed said they couldn’t go a single day without their mobile device in hand. Given how important cell phones are, and how expensive they’ve become, how does one save money on cell phones?

Hardware as a Service

While a cell phone may seem like a one-time purchase, it’s getting harder and harder to treat it as one. Instead of being something you make last until it finally dies, the prevalent attitude about smartphones is to upgrade sooner rather than later. With the advent of the smartphone, the cell phone has grown to become a “hardware as a service model”.

What do I mean by that? Two things: 1) Each new model of smartphone comes with new features you may or may not want (Which you have to upgrade to get), and 2) manufacturers only support a certain model for so many years. It seems like every phone these days is advertised not by processing power or battery life, but by its better camera, new ID technology, and storage. These new features may be useful to you, but whether or not they are is irrelevant. The problem of “hardware as a service model” comes from the second point. Let’s look at an example.

In 2018 Google released a shiny new Google Pixel 3. With it came Android 9 Pie. The next year when Google released Android 10, the Pixel 3 was able to update and install it. Android 10 came with new software features like Dark Mode. It also came with new security patches. Google has promised support for the Pixel 3 until October of 2021. That means the Pixel 3 will be able to update to Android 11 and 12 and get security updates until October of this year.

But what happens after October 2021? Well if you have a Pixel 3, it means you won’t get any new software features that come with new versions of Android. For better or for worse you may want those new features or you may not. But more important than the new features, you will also miss out on the security patches that that come with Android updates.

Technical Security

I’ve personally never needed the newest smartphone features. I really just want my phone to be able to call people and surf the internet, but I’m very concerned with having the latest security updates. With more and more of our lives being online, technical security is a very real concern. In the US in the past 5 years there have been 6,469 data breaches totaling over a billion (1,026,000,000) records exposed. That’s three per person just in the last 5 years. And as I am morally against bad statistics, I am duty bound to remind you that since that includes children that are too young to have any online presence, that number is likely higher per person.

Source: Statista

These stolen records are usually credit card numbers, usernames, and passwords. The kicker in these data breaches is that nearly all of them could have been easily avoided by installing security updates. In these cases hackers exploited vulnerabilities in software that was either not updated or no longer supported by the manufacturer. This is why it is imperative that you update software on your electronic devices and that includes smartphones.

If your smartphone manufacturer no longer supports your smartphone, you are not getting security updates. Because of this, your phone will become increasingly vulnerable to the malicious intentions of bad actors.

To Upgrade or Not

All this to say that though in theory people don’t have to buy new cell phones regularly, in practice upgrading periodically is a necessity. In 2020 the average phone sold in North America cost $471 and increased by 7% annually. And as of 2018 the average smartphone user waited 24.7 months before upgrading. This comes out to an annual expenditure of $228.83/year on cell phones.

North America spends the most on cell phones. Apparently you can save money on cell phones by moving to Africa.
Source: Gizchina

So the average American spends $228.83/year on cell phones. $229 a year doesn’t seem like a lot of money but if you put that money into the stock market making 7% interesting, assuming a 7% increase in price, after 20 years that’s $16,536.93. In 2017 the iPhone X was released at a starting price of $1000. And as of 2020 the average premium smartphone is now over $1000. If you bought the flagship iPhone model every year for 20 years, it would set you back $72,330.55! This number, of course, is assuming a 7% increase in price.

That is the cost of buying new smartphones. Obviously very few people buy a new iPhone every year, but the average American is spending hundreds of dollars a year, and losing out on thousands in potential savings. How can they possibly save money on cell phones?

iPhone or Android?

I know this seems counterintuitive, but buying an iPhone is the better financial decision. I say this because, while Android phones are cheaper, Google only supports them for a couple years. They’ve promised to support their own phones, the Pixel line, for three years. Other high end Android phones, like the Samsung Galaxy line, usually get 2 years, and some of the cheaper android phones don’t get any updates. Google is working to change that because of security risks, but they won’t ever get more than 2 years of updates.

Apple on the other hand doesn’t promise any specific support window, but they’ve consistently supported phone models for 5-6 years. That means that if you pay $800 for a new iPhone that lasts you 5 years you’re spending $160/year on a smartphone. On the other hand if you buy a budget $400 Android phone that is supported for 2 years, you’re spending $200/year on a smartphone. As you can see in this case the iPhone is a cheaper option even though it initially costs twice as much.

As a rule of thumb I like to keep my cell phone budget to less than $100/year. If I spend $200 on a smartphone I hope to keep it at least 2 years. But I won’t keep a smartphone past its support window. This is the same reason I don’t use Windows XP: using software that’s no longer supported is a security disaster waiting to happen. For example I spent $190 on an iPhone 7 in fall of 2019. It should continue to get security updates for at least another year. If Apple stops supporting it in fall of 2022 then it would have cost me $63/year to use this phone.

Both iPhone and Android suffer from a short support window. Microsoft supports their operating systems for like 10 years. Shame Microsoft is awful at making phones.
The people that fight about which mobile operating system is better are much more entertaining than either phone could ever be.

Buy Used

The easiest way to save money on cell phones is the same as saving money on cars: Don’t buy a new phone. There are many ways to purchase used smartphones. Aside from general sites like Craigslist or eBay, there are several sites specifically for buying and selling used cell phones.

Swappa

Swappa is a site where sellers can list their old phones and buyers can buy from them directly. In that way it’s like eBay, but Swappa has specific rules such as the phone has to be working, clean, and not blacklisted from any carrier. I originally used them because they had a deal with Ting that would guarantee with phones worked with Ting and would come with a free SIM card. They are also usually the best deal I can find.

Swappa is mostly for phones, but they also have computers, tablets, and video games. They currently have the iPhone SE 2nd Gen starting around $215. And since the SE will probably be supported for another 3-4 years, that comes out to only spending $70/year on an iPhone!

Gazelle

Gazelle is a site that buys old smartphones, refurbishes them and then sells them at a discount. I bought my wife an iPhone SE 2nd Gen for $265 last fall. The SE 2 was new that year at $400 so $265 was a great deal. If Apple supports it for 5 years, that comes out to $53/year. Nearly half of my phone budget! I didn’t actually have a good experience with Gazelle or their customer service team, but I did get a great deal.

Back Market

Back Market is another site that buys old smartphones and refurbishes them for sale. I’ve never used it, but I’ve heard good things.

Conclusion

In conclusion, smartphones are hardware as a service. Because they shouldn’t be used outside of their support window, customers need to regularly upgrade to stay safe. Because of this you can’t just buy a cheap phone and use it forever like you can most things. This is why I propose the $100/year cell phone budget. I aim to spend no more than $100/year on cell phones.

This means I buy my phones used and then keep them until their manufacturer no longer supports them. Furthermore I pretty much exclusively buy iPhones because Apple supports their phones much longer than Google does. That said I don’t really have brand loyalty. I would by an Android if it were a better financial decision but for now I believe iPhones are the better deal on a per year basis. I recommend, as always, that you do your research.

What do you think? Which phones do you use? How much do you spend per year on cell phones? Let us know in the comments below!

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Save Money on Your Phone Bill with Ting

Posted on by David

The average cell phone bill is $70/month or $840/year for a single line according to JD Power. And a family of 4 can expect to pay anywhere from $120 to $220 a month for 4 lines from a major wireless carrier according to Tom’s Guide. Allconnect estimates the average cost of a single cell phone plan at $113 and $170 a month for a family of 4. My cell phone bill was just $11/person per month last year. How did I accomplish that? Here’s how to save money on my your phone bill with Ting.

Full disclosure, this post is not sponsored. I’m just a happy customer.

Ting has been around since 2012 and got their start by buying airwaves from Sprint. There was a flat rate for the number of lines you had and the rest was billed in buckets of minutes, text messages, and data across those lines. If you didn’t use your cellphone as your primary phone (ie, you had a landline) and didn’t use much data, it was a great alternative to an expensive phone plan with the Big Four carriers.

Using Ting it's very easy to save money on your phone bill

It worked for my family because we had a landline and we didn’t use much data because we had wifi at home (like nearly everyone in America).  The four of us usually kept ourselves under 500 minutes of talking, 1000 text messages, and 100 MB of Data. So it rarely costs us more than $41/month.

After moving out my sister and I started using our cell phones as our primary communication devices so minutes and texts went up. We combated this by getting google voice and using that for our longer conversations. It helped for the most part, but even if we went over on minutes or texts, Ting was still wildly cheaper.

Then I got Married

After getting married we added Courtney onto our mobile plan for a total of 5 lines. That extra line tipped us over to the next bucket for several of these. (That year Pokémon Go also came out but I’m sure that didn’t affect my data usage at all *cough* *cough*). At 5 lines, 1000 minutes, 2000 text messages, and 500 MB of data, our monthly bill was looking more like $66-$83 per month. That is still so much cheaper than just about any other option. Especially for 5 people.

We did this for a while, then Ting was bought out by Dish. We’re still not sure what that means for customer service or reliability, but after this they changed the billing system. Their new plan is much simpler: Unlimited Talk and Text for $10/line plus $5/GB shared across all lines. They have other plans if you need more data, but this has worked great for us.

New Ting plan has unlimited talk and text
New Ting plan has unlimited talk and text

So with 5 lines and never going over 1GB of data our bill comes out to $55/month or $11/person!

But what if I need Data?

I’m going to say something a little controversial: you don’t need that much data. It’s been my experience that no one needs data, or at least no one needs as much data as they think they do. No one needed it ten years ago and now that nearly every home, business, and restaurant has wifi, there’s no need to use cell data. The most data we use is for Pokémon Go and even that only ends up being like 200 MB/month.

Everywhere I am has wifi. The only places that don’t are when I’m actively driving and at the park. And you don’t need to use your phone when driving or enjoying the outdoors. You can stream music or watch YouTube videos on data, but you don’t need to stream music or videos when you’re out. But what if my work doesn’t have wifi I can access? You’re working, you don’t need to be on your phone. If you want to watch something while on your lunch break, download it before you leave home. Netflix allows a variety of episodes and movies to be temporarily downloaded.

Some people stream music when they’re driving or running, but that’s just a modern luxury. Just pretend it’s the distant past circa A.D. 2010 and put some music onto your phone. Modern phones have a crazy amount of storage now. You can put so much music on them! With the money you save by not paying for data, you could buy several albums a week.

What carriers do they have?

Originally it was just Sprint, but now they have deals with all the major carriers. We’re currently using them on Verizon’s airwaves, or the “Red Network” as they call it. Never had a problem with coverage.

Do I have to buy a new phone?

No. Ting works with nearly any phone. They have a phone checker that will make sure your phone is compatible with their networks, but pretty much any modern phone will work now that the government has forced the Big Three to play nicely. If your phone doesn’t work on Ting or you just want a new phone they have a shop where they sell compatible phones at or below new prices. That being said I only buy used phones from Swappa.

What if I *actually* need data?

They have other plans that are more data-friendly, like unlimited talk and text and 5 GB of data for $25, but for the most part we don’t *need* as much data as we think we do. The less data you use the more you can save money on your phone bill.

What about Google Maps?

Google maps uses surprisingly little data. An hour trip might use like 30 MB. If you use Google maps a lot, you can download an offline map while at home then you won’t need data to use the GPS.

Captain Picard saved money on his phone bill by switching to Android
Captain Picard saved money on his phone bill by switching to Android

Conclusion

I like Ting a lot. Our family spends roughly ¼ of what the average American does on cell service. And now that they have unlimited talk and text for $10/line it’s pretty hard to complain. I don’t use much data and frankly have never felt that I needed more than the 1 GB we use. Even for a family of 5, we only ever use a few hundred megabytes. Remember mobile data is a luxury, and while it’s ok to indulge in the occasional luxury, they aren’t needs.

What do you think? How much do you spend on cell service? How do you save money on your phone bill? Have you been looking for a new cell plan? Let us know in the comments below.

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How to be a Book Lover on a Budget

Posted on by Courtney
My actual bookshelf

Just about anyone that knows me knows that I love books. It’s been a passion from childhood. However, growing up without much, I had to support this passion on the cheap. We are going to talk about ways to help you acquire books, and ways to keep you reading for free.

Buy Secondhand

I know this seems obvious, but we may as well start here. There are several different ways you could get your hands on some gently used and cheap books, some more traditional and some more modern.

  • Used bookstore: Many towns that are over 5,000 people (I feel your pain if you’re in too small of a town, I spent my teen years in a town of 1,000) will have a used bookstore of some kind. Where we live there are Half-Price Bookstores, as well as several mom-and-pop style used bookstores. Their prices may not be the lowest possible, but you’re more likely to find nice quality books than you might from other places, and they have a larger selection since they’re dedicated bookstores. Also, they’ll almost always be cheaper than new bookstores unless you want fancy old books.
  • Thrift stores: I know thrift stores are very “in” right now, but that’s usually for clothes. I have friends that didn’t know thrift stores even had books! They’ll usually be in the back by the knickknacks and furniture. The books may not be in as great of shape as you can find them elsewhere, but it’s hard to beat the price!
  • Online used book stores: Places like Thriftbooks can be a really great alternative to eBay or Amazon (although in my experience some places list their books through multiple sites. I’ve found the exact same book on Thriftbooks and eBay before). You can also look at books and see which copies they have and what condition they may be in. Definitely a good option, especially when for Thriftbooks you can get free shipping on orders of more than $10!
  • Library sales: A lot of libraries will occasionally have sales where they sell books that are in slight disrepair or aren’t borrowed very often. These are great ways to get new books, especially if you go on one of the last days when books are usually half off! Also, check and see if your local library has a bookstore inside that does this year round. Ours does! It’s not quite as large a selection as the big sale, but definitely worth a check. 
  • Yard sales: If you’re looking for a specific book this isn’t going to work for you. But if you want to just look for something that seems fun, this may be the most cost effective way. During the spring and summer there are lots of garage and yard sales, and one of the things people love to get rid of are books (why??). They’re usually marked very cheap, and you may be able to haggle yourself a deal. Don’t forget to check out estate sales, as often a lot of books are sold there since family doesn’t have an emotional connection to them.

Free Access to Books

If you don’t feel the need to own every book you read, or if you’re occasionally able to deny the urge to do so, you can borrow or rent them! In our modern age there are a lot more ways to do this than there used to be, which is great news for us bibliophiles.

  • Libraries: Look, I know everyone knows this but sometimes you need to be reminded to actually use your library! Especially after 2020 where you may have gotten out of the habit.
  • Library Book Apps: On the topic of libraries, nowadays most libraries will grant you access not only to the physical books they own, but also ebooks and audiobooks! There are a lot of different apps, so be sure to look up which one your library uses. Your library may even use more than one. My old library in Nebraska uses both Overdrive (and it’s more interface-friendly companion app Libby) and Hoopla. Also, be aware that you may technically be in the jurisdiction of two separate libraries. Our local library and the county libraries both have e-library cards, and I can have both!
  • Librivox: Librivox is a crowd-sourced audiobook catalog. What that means is individuals can record themselves reading the books, upload it to Librivox, and then you can listen to them. Their library is entirely books in the public domain so that nobody has to pay either to upload their own version or to listen to the audiobooks. For me Librivox is hit or miss because anyone can upload, but you can definitely find some gems here!
  • Internet Archive: Internet Archive is a website that, among other things, has ebooks that can be viewed online (unfortunately they don’t have an app). They can be a little difficult to browse through, but if that doesn’t bother you then enjoy! You can either view books they have that are just available to be read, or you can use it as a regular library and check books out.
  • Google Books: Google has scanned and put lots of books and magazines online on Google Books. If the work is (once again) in the public domain, it will be free in its entirety either at the link or on the Google Play Books app. If it is not in the public domain, it may sometimes just be the first chapter. At least that way you can see if you like it without committing to buy it! They also show you where you can buy it, or nearby libraries that have it (at least on the website, I haven’t played around with the app).
  • Amazon eBooks: Public domain, we meet again my old friend. If a book is in the public domain, odds are good that Amazon has a free ebook version of it. 

Paid Services

If you like ebooks or audiobooks, and want access to a larger catalog than your library has, you have some paid options. These are usually monthly subscriptions, but they can be an excellent option if you don’t care if you own the books outright.

  • Amazon’s Kindle Unlimited: Amazon has a service called Kindle Unlimited that allows you to read as many of their ebooks, magazines, and audiobooks for $10/month. If your library’s ebook selection is small and you don’t mind a monthly fee, it seems to have a lot available on there!
  • Audible et al: Audible, and other services like it, allow you to listen to audiobooks in their library for a monthly fee. One of the benefits is they usually have a lot more books than your library might, and you don’t have to wait if someone else has it checked out. Audible is only $8/month, and they have original versions of books! If you get their premium version, which is seven dollars more expensive, you can keep one audiobook a month, permanently (even if you cancel your subscription). I didn’t do any research into the other audiobook services that are out there, but there are a lot so look into them if you have an interest. Some could be cheaper, or work better for you. 

Miscellaneous 

Here are some extra ways to get your hands on free or almost free books! These didn’t fit in my previous categories, but I thought you should hear about them anyway.

  • Have a bookish friend (or two or three): If you love books, odds are you’ve got at least one friend who rivals you in the same love. Borrow some of their books! I imagine your tastes in books have to overlap somewhere, and you can trade with one another. Just make sure to keep track of what you’ve borrowed and lent. Nobody wants to lose a book!
  • ILL: If your library doesn’t have a book you’d really like to read, they can get an  inter library loan from another library! It may take a while, but it can definitely save you money.
  • ARC Reviewing: ARC stands for Advanced Reader Copy. Many publishers or even just authors themselves send out ARCs to drum up interest in their books. There are websites like NetGalley where you can request ARCs in return for reviewing them. If this is something that interests you, look into it! There’s a lot of information on how to request ARCs online. 
  • Tiny Libraries: Check out littlefreelibrary.org to see if there are any little libraries near you! These libraries allow you to take a book and leave a book, which can lead to some fun reading material since you never know what you may find. You could even consider building one of your own and registering it. Then you could have a mini library in your front yard. You’ll need to look into the legality of this in your town but definitely worth checking into!

Conclusion

There are a lot of great ways to love books on a budget, and I’m sure I haven’t covered them all. Be sure to leave anything I forgot in the comments, or let us know your favorite idea from the article!

David’s note:

Like Courtney, I also like books. I just don’t like reading. My rule for myself has been: The library is for books you want to read, and the bookstore is for books you want to own. The kind of books we buy are the ones we want to keep forever. The kind you keep returning to and want to read to your kids eventually. And for everything else the library is great.

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4 Tips to Cut Your Commuting Costs

Posted on by David

How much does it cost you to commute to work every day? Do you end up paying to work? In our post, The Cost of Working, we saw that that it costs a lot to go to work. And in our last post, How much do you pay to work?, we looked at career decisions that could result in actually earning a negative paycheck. One of the biggest expenses of working is the commute, so we are going to tackle how to lower that cost. In 2019 the IRS estimated the cost of driving at 58 cents per mile (source). This includes gas, depreciation of car, and maintenance. This 58 cents/mile figure is an average so your costs may be higher or lower depending on a few factors. So let’s look at 4 tips to help cut your commuting costs.

Never borrow money to buy something that costs money to use.

The IRS estimates the cost of driving at 58 cents/mile, but they are assuming the average price for cars, the average gas mileage, and the average price for repairs and maintenance. The average new car costs over $40,000 so a good portion of that 58 cents/mile comes from depreciation. The average gas mileage has continued to trend upwards and is now about 25 mpg. They also take into account insurance and maintenance. You as a smart car buyer have at least some control over all of these components of car cost.

1. Don’t Buy a New Car

New cars are incredibly expensive, and unless you are independently wealthy you will most likely have to take out a loan to buy it. Never borrow money to buy something that costs money to use. That just doesn’t make sense. AAA estimate that a new car loses $3,721/year in depreciation. A good way to save lots of money is to buy a reliable, gently used car. If you are primarily commuting to work (like most working Americans) then you don’t need a new fancy car, a giant SUV, or a pickup truck with the towing package. All you need is a small used sedan that gets you to and from work.

There are a lot of costs to owning a car. Make sure to cut your cost of commuting.
Source: AAA.com

2. Buy a car that gets good gas mileage

Gas prices are going up quickly and gas mileage may be increasing, but the average is still only 25 mpg. At $3/gallon if your car gets 25 miles per gallon, that comes out to 12 cents/mile. At 32 miles round trip per day that comes out to $960/year in gas. If you ‘re driving an SUV that only gets 17 mpg your cost jumps up to $1412/year. Obviously getting a car with better gas mileage will save you money on gas, but what most people don’t seem to understand is that you can save money on gas, just by driving safer.

Coast up to red lights, accelerate slowly after the light turns green, try to drive a constant speed, don’t speed up and slow down to weave in and out of traffic. In high school I had an old car that got 16 miles to the gallon, but by following these rules, I was able to squeeze an extra 4 miles per gallon out of it. This also has the added benefit of needing less maintenance. If you aren’t driving your car as hard you won’t need to change oil, tries, or breaks as often.

3. Don’t get full coverage insurance

Full coverage is a scam. Average full coverage for a good driver with good credit is $1,592/year. It almost doubles to $2,812/year for bad credit, even if you’re a good driver without a wreck! Why do people get full coverage on their cars? Usually it’s because it’s mandatory for a car that is financed. If you don’t own the car outright, the dealership will require full insurance on it because they still own it. That’s a good enough reason on its own not to finance a car; you’re throwing your money away on insurance.

The other reason people get full coverage is that their cars are new and shiny and they want to keep them that way. That makes sense. If you bought a new car, even if you bought it with cash, you spent a lot of money on it, you’d hate for it to get wrecked. They way around this is to not buy a new car. I bought a used car that had $9000 in hail damage. The car was in perfect shape other than having dents in it from the hail. Instead of $20,000, the car only cost me $5,000, and now I don’t feel the need to get full coverage on it because it’s already dinged up. I only pay for liability and it costs me $400/year.

4. Save on Maintenance and Repairs

The biggest cost of driving a car (after depreciation) is maintenance. All cars require routine maintenance, but some cars are cheaper to maintain than others. It’s pretty true across the board that cars with lower prices are also cheaper to maintain. Luxury cars come with luxury parts, and it costs luxury prices to replace those parts. Cheaper cars have cheaper parts and since they’re easier to work on, the labor costs are lower as well.

This is true for repairs as well. A 2005 Toyota Corolla will cost less to repair than a 2020 Audi A8 for the same issue. Since the primary purpose of this car is to haul you to work and back, the primary thing to look for is a car that can do that reliably. The best way to save on maintenance and repairs is to buy a car that doesn’t require a lot of maintenance and repairs. Generally over the life of the car expect to pay the same amount in maintenance and repairs as the initial price of the car. So a $20,000 car will typically cost $20,000 to keep running over the life of the car.

Save on Maintenance by DIY

The next best way to save on maintenance and repairs is to do some of the maintenance yourself. The average cost of an oil change according to Kelly Blue book is $55. For a synthetic oil change it can cost up to $125. Manufacturers recommend you change your oil every 3000-6000 miles. If you drive 15,000 miles/year that’s about $275/year just on oil changes. Changing brakes can cost anywhere between $500 and $1000. Brakes should be changed every 40,000-60,000 miles. Then there’s things like changing transmission fluid, spark plugs, timing belts etc. All of which cost a good amount to replace.

I don’t like working on cars and don’t know enough to repair big issues like engine or transmission problems, but I change my own oil and replace my own brakes. A jug of full synthetic oil and a filter will cost you about $30 at Walmart and a set of brake pads costs like $40 from the auto parts store. Changing oil is pretty simple, and while changing brakes can be a little more difficult, YouTube makes it much easier.

Over the lifetime of a car, I can save thousands of dollars just by putting in the least amount of effort over literally one weekend. By doing just a little bit of your own maintenance, you can make driving a whole lot cheaper. And if you really don’t want to work on your own cars, find a cheap independent mechanic: never get repairs done at the dealership. That is just throwing money into a fire.

Average cost/mile for different vehicles. Make sure to cut your cost of commuting.
The lowest overall driving costs is still 50.1 cents/mile! Source: AAA.com

How much does it cost me to drive?

I did some calculations on how much it costs me to drive per mile. Obviously these are estimations because it’s hard to project for big ticket repairs, but I came to about 30 cents/mile. I have 2012 Hyundai Sonata that I bought in 2017 for $5,000. Since then I have put on about 35,000 miles

2012 Hyundai Sonata2006 VW Jetta
Miles driven35,000 miles23,000 miles
Initial cost of car$5,000$3,000
Cost of maintenance and repairs$2,500 $2,000
Cost of gas$3,000$2,000
Total spent on car$10,500$7,000
cost/mile30 cents/mile30.4 cents/mile
Total costs of owning a car

If I take the total amount spent on these cars $10,500 + $7,000 = $17,500 and divide that by the total miles I’ve put on them, 58,000 miles, I get about 30.2 cents/miles. That’s a little more than half of the IRS estimated average of 58 cents/miles! And in fact it’s actually probably less than that because the initial price paid for the cars is a fixed value. The gas and repairs will go up with mileage, but the largest cost, initial price, stays the same.

So if I can get another 10,000 miles out of both of these without a major repair, my cost of driving decreases to 25 cents/mile, less than half of the federal estimate! My general goal is to spend less than $1000/year on maintenance and repairs. If you pay $20,000 for a new car, $20,000 to keep is running for 200,000 miles the cost to drive will be 30 cents/mile.

Other Costs not Included

You might ask why I don’t have Insurance, taxes, or registration listed on here as costs. I went back and forth as to whether I should list them but ultimately left them off because they are yearly costs rather than costs per mileage. I keep these costs low by driving old cars and only holding liability insurance, but those costs are the same regardless of how many miles I drive. Technically if we were able to go down to one car those costs would go away so there is no one right way to think about costs.

Another option is reducing the number of days you drive into work.

The best thing to come out of the Covid-19 pandemic is that most employers switched to a work from home model. This has allowed millions of workers to save time and money on their commutes. We calculated that the average American spends $18.56 every day they drive to work so every day they don’t have to drive into work they can save almost $20. That’s not including the time spent commuting. If you make $25/hours and it takes you an hour to drive to work that’s $25 worth of time saved as well.

During full-time work from home last year the average worker cut their commuting costs by almost $100/week, but now that the pandemic is pretty much over workers are going back into the office. But one of the lingering effects of the pandemic is that a lot of employers are much more flexible if you want to work from home part time. If you can make a deal with your boss to work from home two days a week, you could end up saving over $35/week. $35 is nothing to sneeze at. That’s enough to go out to a (semi)nice restaurant with your spouse once a week.

Sleep at work to cut the cost of commuting
It’s like an 8-hour commute…

Conclusion

As always this is just an example of ways to save money. My intent is for you to apply these principles to your own situations and determine what’s best for you. You may be a good mechanic who enjoys working on your own cars, or maybe the peace of mind that full car insurance brings is worth the extra money to you. Remember what’s best for you may not always be the best choice money-wise.

What do you you think? How do you cut your commuting costs? Is your cost above or below the IRS Estimate? Let us know in the comments below!