Paycheck Chronicles

The Cost of Transportation


This summer, my family is moving across Europe.  During the six day drive, we're stopping each night in reasonably big cities:  Florence, Basel, Luxembourg, Paris.  In the three nights we've finished so far, two of the cities have been extremely anti-car.  How can I tell?  Great public transportation, a shortage of parking spots (especially for the Honda Pilot with the Thule roof box), and lots of people on bicycles.  I think all this emphasis on public transportation is positively fabulous, especially for the pocketbook.

Most American families find that transportation is either the second or the third most expensive part of their budget.  (Also at the top:  housing and food.)  I am not surprised, because most American families use automobiles as their primary forms of transportation.  With the ridiculous price of vehicles, and the skyrocketing cost of fuel, it is easy for transportation to cost hundreds, or even thousands, of dollars each month.

I can't even begin to predict what constitutes "average" anymore, but let's just make up a mythological young family.  Dad drives a paid for truck, and Mom has a newish minivan.  I did a quick google search and discovered that a mid-price minivan costs around $25,000.  Ignoring on the size of the down payment, the sales tax, the interest rate, and other variables, a payment on a five year loan for $25,000 would be $438 per month.  Add in insurance of $200 per month, plus gas on both cars at around $400 per month (pretty low, by the way), and you've got a total monthly cost of over $1000 per month, not including maintenance.  Most vague calculators figure you should budget for $50 per month per vehicle for car repairs and maintenance, so we're over $1100 each month.

Assuming that our imaginary family has a single breadwinner who is an E-6 with over 8 years of service.  Base pay for this service member is $3143 per month, plus BAS of $348 and BAH if they are not living on base.  That $1100 monthly transportation cost is a huge portion of this family's income.

Is there a solution?  Well, you certainly have to be creative.  My husband and I have had two periods where we didn't have two cars.  It was challenging and required lots of cooperation, communication and patience.  Also, depending on where you live and your particular situation, cutting down to one car isn't always a good thing.  If the spouse is suddenly driving to and from the service member's distant workplace twice each day, having one car might actually be more expensive than having two cars.  Also, you can strive to not have a car payment by saving before buying, buying used, and driving cars for a long time.  You can slightly lower your insurance premiums by increasing your deductibles if you have enough savings to cover the higher deductible.

So far, the best solution I have found is to live somewhere that has great public transportation and a pedestrian and bicycle friendly atmosphere.  Unfortunately, the Navy hasn't sent us to one of those places yet.  In the meantime, we have to focus on minimizing our driving, not being a speed demon, and driving our cars for a long time before replacing them.

Please share your tricks for decreasing your transportation costs.  I would really like to know!

Show Full Article

Related Topics

PayCheck Chronicles

Most Recent Military Pay Articles

View more
This block is broken or missing. You may be missing content or you might need to enable the original module.