Tuesday, October 11, 2011
[The] misconception about what is a reasonable commute is probably the biggest thing that is keeping most people in the US and Canada poor.This is eye-opening, although, as comes up in the comments (and I've learned by living in Boston), many alternatives would come with other costs (e.g., higher housing costs) that would negate all or part of the money saved from not having to commute -- or even make commuting look like a bargain, financially.
Let's take a typical day's drive for this self-destructive couple. Adding 38 miles of round-trip driving at the IRS’s estimate of total driving cost of $0.51 per mile, there’s $19 per day of direct driving and car ownership costs. It is possible to drive for less, but these people happen to have fairly new cars, bought on credit, so they are wasting the full amount.
Next is the actual human time wasted. At 80 minutes per day, the self-imposed driving would be adding the equivalent of almost an entire work day to each work week -- so they would now effectively be working 6 workdays per week.
After 10 years, multiplied across two cars since they have different work schedules, this decision would cost them about $125,000 in wealth (if they had for example chosen to put the $19/day into extra payments on their mortgage), and 1.3 working years worth of time, EACH, spent risking their lives daily behind the wheel*.
That’s EVERY ten years. And that’s with a commute that most Americans claim is "not too bad".
You’ll note that most 30-year-old couples today, about 10 years into adulthood, don’t even have $125,000 in net worth. And they probably drive around quite a bit in expensive financed cars, mostly as part of a self-imposed commute. These facts are directly related! [emphasis in original]
What prompted me to comment on the post also turns out to have come up in its comment section: education. It occurred to me this morning that one thing driving many home purchases is the "quality" of the government schools to which the children living in a particular house will be subjected by default. The tuition (made artificially high by "free" government competition) for private education or the time for home schooling end up, for couples with children, having to be considered among the costs of the alternatives to long commutes. As one commenter notes:
[Nine] years later, my eldest daughter bought a small house in the same general area we had rented in. She has a five minute commute but she and her husband are going broke from house repairs, house payments, property taxes, property insurance and private school tuition to make sure that their kids get a good education. ... [minor edits]I have not done exhaustive research on this question, but the very reasonable tuition of a school I have heard great things about would, alone -- and for a single child -- wipe out the savings realized by avoiding a long commute (assuming that could even be done in California, where that school is located).
It is also worth noting that many of the other things besides education that come into play regarding this question are due to bad government -- from the fact that so many otherwise affordable urban neighborhoods are crime-infested messes to the fact that taxes are often much higher in large cities -- particularly in "blue" parts of the country and the Rust Belt.
Commutes may be sucking the time and money out of our lives, but it is bad government that makes them into the path of least resistance for so many Americans.