Before learning about the financial benefits, I used to enjoy biking as a relatively inexpensive hobby. Sure you could spend a ton of money on a nice bike, but I only spent about $600 on mine and have used it for both exercise and enjoying the outdoors.
You see I noticed something when I got into biking. People smiled and waved at each other from their bikes. When I used to run a lot, I found that other runners mostly just ignored everyone else in an effort to preserve energy, and rarely did they seem happy. Now I realize many people love running, even if they look mad while they’re doing it. But no one can deny that runners simply can’t go as fast, or go as far as someone on a bike without some serious effort. They can take some crazy trails though, I’ll give them that.
When you get on your bike, you really get a better understanding of the local landscape. You take roads normally only reserved for locals and develop a real deep knowledge of how to get around town efficiently. You also begin to notice the beauty hidden past the curb. I can’t get enough of it. These days exercise isn’t simply about burning calories, I want to enjoy it as well.
But up until recently that was the extent of it. Biking was a hobby, and a very occasional vehicle for commuting. I stopped going on long rides years ago, and for months on end my bike would sit untouched in the garage. But that’s all changed. These days I’m all about easy ways to save money, and I’ve seen the light. Our nation’s love affair with the automobile is a huge part of the reason we can never get ahead!
Not long ago Mr. TOC used to drive 80 miles to work. That’s right, every day I drove for 160 miles, and spent over 2 hours in my car, and that was a good day! Most days I got caught in traffic, so my commuting time would eat up 3 hours of my life every. damn. day. That means over the course of a year, I would spend 30 entire days in my car. Ouch.
But I figured it was worth the income. I had a hard time finding a job I liked closer to home. So while I did change jobs multiple times, I kept ending up back at the one far from home. Eventually it was the shame of quitting so many times, not the money, that led the TOC family to move closer to work. I wanted to let the company know I was serious this time. I really am lucky to be here, or just fortunate I know how to do something that most people don’t. At least not people that live in Ohio.
To this day I’m not sure why, but I was adamant about living close enough to work to bike. Back when we were looking for a home, I just thought it’d be a nice way to get some exercise and an excuse to ride more often. But by finding a place to live close to work, we made one of the best financial decisions of our pre-FIRE chasing lives. While some days I still think about moving to a smaller home to save even more time and money, I feel good knowing we already save a ton just by living close to work.
You see when you break down the cost per mile of your vehicle, you’ll find that driving is extremely expensive. There is a reason the standard reimbursement rate for business travel is 54 cents per mile. I will say I think this number is on the high end, and it that it’s probably because the most popular vehicle in this country is the pickup truck. In fact, 6500 are sold every day! I don’t want to be too critical, since I’m guilty of loving pickups myself, but these things are very inefficient. They cost more to buy, more to insure, and more to drive. I remind myself of this every time I think of trading in one our cars for a truck. That’s why I still drive our Honda Fit, which I estimate costs about 38 cents per mile. I rarely drive it far these days, which isn’t great for a gasoline powered car. When I drove all highway miles, that number was probably only around 25 cents per mile.
But it still adds up, and quickly. From my last home, I was commuting 3200 miles a month! That’s $800 dollars in average monthly expenses. Every year that would cost me nearly $10k just because of where I chose to live. Now that I live only 5 miles from work, a full month of commuting by car is only $70 dollars. That’s $730 in savings each month! Plus, I can save even more when I ride a bike!
So finally, I come to the topic of this post. Riding a bike 5 miles to work isn’t bad on paper, but on really hot and really humid days, it’s not great. No matter how slow you go, you are gonna smell like crap before you get to work. Not wanting to add a shower to my commute time, I used to rarely ride my road bike unless the weather was perfect. But after learning about FIRE I wanted to ride more often, so I did the sensible* thing and purchased a $1,100 e-bike from Juiced Bicycles.
Having a motor made sweating profusely no longer a thing. I can climb hills now with ease and maintain a steady 15-20 mph without even breathing hard. But with battery life now part of the maintenance, this bike costs a lot more per mile than most. By that I mean it costs me an estimated 5 cents per mile. So it’s still WAY cheaper to use than my car. If I made the optimal choice and rode it every day, I could save $60 each month! It’ll take about 4000 miles of commuting for this bike to pay for itself. We’ll see if I ever get there. For now I’m just enjoying the ride.
It’s hard to believe this knowledge isn’t more widespread. The average commute in America is 15 miles each way. Just by moving 10 miles closer to work, and choosing to bike as much as possible, anyone could easily cut out $200-$300 in monthly commuting costs. That money could go into a vacation fund, towards a new home, or if you are like me you’ll just want to save it.
Even if you don’t move, you shouldn’t include your commute costs in your FI number calculation. After retirement, you won’t have to pay for your commute! So for any of my readers who live around 15 miles from work and aren’t going to move, you can at least feel good knowing that no longer having a job will save you about $2400 a year, effectively eliminating $60,000 from your FI number. Now that’s nice to know isn’t?
*If you didn’t note the sarcasm, the sensible thing would be to take a shower. But I do love my ebike to death, and believe firmly it was worth the price of admission.