What your commute really costs

The good life.

The blogger "Mr. Money Mustache" recently met a young couple who had just moved to his leafy suburb for its beauty. Their jobs were 40 minutes away, and they would be driving. It's worth it, they said.

So he began to calculate.

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.

He crunches the numbers to make them more realistic and comes up with:

Each mile you live from work steals $795 per year from you in commuting costs.

$795 per year will pay the interest on $15,900 of house borrowed at a 5% interest rate.

In other words, a logical person should be willing to pay about $15,900 more for a house that is one mile closer to work, and $477,000 more for a house that is 30 miles closer to work. For a double-commuting couple, these numbers are $31,800 and $954,000.

He's got a lot more on how to think through where you live.