Tip #24: Cut your commute expenses by 40%

Ramit Sethi

This is Tip #24 of of the Save $1,000 in 30 Days Challenge. (See past tips.)

Today’s tip is to cut your commute expenses by 40% using two techniques: Carpooling and working from home.


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Tip #1: Carpool
Carpooling is a sacred cow for Americans, which is exactly the kind of expense I love to cut. We spend incredible amounts of money and time commuting. As Gallup reports, the average American spends 46 minutes commuting to/from work each day. But any advice that suggests you sell your car and exchange it for a bike is totally irrelevant for the vast majority of people. Instead, I propose something much more modest.

Forget carpooling 5 days per week. Try carpooling 1 day per week. That’s hardly inconvenient, yet you save about 50 days of carpooling per year. At the peak of gas prices, I spent about $65/week on gas. If I carpooled just 1 day per week, that would equal about $465 in savings over 1 year. (Note: Here’s how I save more money on gas.)

The key: Start small. Don’t try to turn into Al Gore on day #1. Set a smaller goal so it’s sustainable: Try 1 day per week. That’s it.

First start, then optimize
Yes, technically you have to factor in the costs of driving your carpool buddies once every few weeks, but for the sake of simplicity, we’ll just exclude that. In fact, forget all barriers. As usual, it’s easier to ramp up once you’ve started:

“During this past summer I spent as much as $300 per month on fuel not to mention wear and tear on my vehicle. I am currently paying $45.00 per month to ride the Van Pool. An instant savings of $255.00 per month on fuel. Take that OPEC!”
–Marcos Martinez, Katy, TX

Use these sites to start:

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Tip #2: Work from home
Consider asking your boss to work from home. In The 4 Hour Workweek (see my book review here), Tim Ferriss outlines how to ask your boss to work from home.

Sherwood: Hi, Bill. Do you have a quick second?
Bill: Sure. What’s up?
Sherwood: I just wanted to bounce an idea off of you that’s been on my mind. Two minutes should be plenty.
Bill: OK. Shoot.
Sherwood: Last week, as you know, I was sick. Long story short, I decided to work at home despite feeling terrible. So here’s the funny part. I thought I would get nothing done, but ended up finishing three more designs than usual on both days. Plus, I put in three more billable hours than usual without the commute, office noise, distractions, etc. OK, so here’s where I’m going. Just as a trial, I’d like to propose working from home Mondays and Tuesdays for just two weeks. You can veto it whenever you want, and I’ll come in if we need to do meetings, but I’d like to try it for just two weeks and review the results. I’m 100% confident that I’ll get twice as much done. Does that seem reasonable?
Bill: Hmm…What if we need to share client designs?
Sherwood: There’s a program called GoToMyPC that I used to access the office computer when I was sick. I can view everything remotely, and I’ll have my cell phone on me 24/7. Sooooo…What do you think? Test it out starting next Monday and see how much more I get done?
Bill: Ummm…OK, fine. But it’s just a test. I have a meeting in five and have to run, but let’s talk soon.
Sherwood: Great. Thanks for the time. I’ll keep you posted on it all. I’m sure you’ll be pleasantly surprised.

Read more of Tim’s script in the section called “Disappearing Act: How to Escape the Office” of The 4-Hour Workweek.

The point is, during times when we’re all supposed to be doing more with less, if you can be more productive while working from home, your boss may seriously consider it. Most people never ask, so they never have the chance to trial a work-from-home strategy…even one day per week. (At PBwiki, the company I co-founded, we actively encourage people to work from home once a week.) What’s the worst he could say — no?

Just remember, your boss doesn’t care about you — he cares about how much you can (1) help the company and (2) make him look good. Frame your request accordingly.

Total savings: $100 to $300 per month if you apply both these tips (i.e., you’d be saving on your commute 2 days per week, or 40% of your commute).

* * *

Last thing to do
1. See other tips in the Save $1,000 in 30 Days Challenge
2. Leave a comment on this post describing how much you’re saving with this tip and any unusual techniques you use to make this tip work.

If you found this post helpful you’ll probably like my new Ultimate Guide to Personal Finance. This is an excellent place to learn more simple ways to improve your personal finance and money management.

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  1. Gary

    I love the idea of working from home. I think that everyone seems to think it would be a great idea, but no one really thinks to ask to see what their boss will say. It’s true, what’s the worse that can happen? He or she might say no but otherwise, you might get to work from home and save a lot of money on traveling expenses as well as be able to work inside the comfort of your own home with your own self-made schedule as long as you make deadlines.

    Great idea and good job encouraging people to ask for something that could benefit them but no one really thinks to do.

  2. Jennifer

    Unfortunately, this idea is not much of a solution for me because I’m a television producer and need to physically be at the station.

    However, at all my places of employment I’ve lived about a mile or less away. That means it’s quick and easy to get to work every day, don’t have to rely on other people to give me a ride, and only fill up my gas tank twice a month. I’ve considered getting rid of my new car and getting a much cheaper one, but that’s still up in the air.

    This also saves TIME. My coworker lives an hour away and spends two hours driving each weekday, whereas I only spend about 5-10 minutes doing this, giving me more time for myself.

    Becoming The Marshmallow

  3. Maria | Never the Same River Twice

    In the past year, I’ve been able to transition to working from home 1 or 2 days per week. I absolutely love it. I get more done, save money, and get a chunk of my life back. Of course I would have no commute in an ideal world, but for now I’ll take it.

    I estimate my savings per year at about $2000 annually in fuel and wear and tear on the car.

  4. Andrew

    I live 1-2 miles from work so I too spend very little in gas. I agree with Jennifer that the time saved every day is very valuable.

    I have a bike, but Jackson, MS is not very welcoming to cyclists and it instead gets used mostly for exercise and recreation.

  5. Cathy

    I work from home 2 days a week. One of the perks of my job. It cuts my fuel budget, food and stress level almost in half. If I’m working from home, I’m more likely to eat the food in my cupboards instead of going out. Reduction in stress (not having to fight traffic – so nice!) probably cuts my health expenses – I’ve been less sick this year than in past years. Since I’m paid by the hour, sick time means no pay.

  6. Teaspoon

    Well, I already either bike to work or take the bus 4 out of 5 days a week, so I can agree that this is a great tip for people who haven’t taken that step. I usually only fill up the car once a month. I highly recommend taking steps to live closer to your job (or work closer to your home).

  7. Jennifer

    When I took my current job at a university, it was a real perk because it meant I could carpool with my husband since he works here too. So we carpool together about 5 miles everyday. Even though my job pays less than one out of town, being able to have lunch with your spouse everyday , saving money on gas, and time makes up for it all.

    The only thing we’ve possibly considered to save further on commuting costs would be to take the bus. Our bus service now offers bike carriers, however we would have to pay full price for a bus pass. I’m not sure if that is cheaper than just buying gas every few weeks or not.

  8. Glen

    By getting a monthly pass for my mass transit needs, my daily commute costs the same amount of money whether I use it or not.

    And in the cost of heating/air conditioning at home and it costs me money to work there. I have a timer on the controls. Currently during the day right now I allow the house to drop to 58, then heat up again shortly before I get home.

  9. Jane

    good tip for those who can, none starter for me coz my patients have to get to my clinic and so do I…. used to work from home years ago, but disabled access for patients is a problem now the law has changed, and I have too much work to manage on my own now [NOT a problem, thankyou!] , so would have clinics running in my house whilst I was on days off. also downsized house, so no space….

  10. Jeremy

    I cut mine by 100% by living somewhere that I can take public transit or bike to work from.

    Then again, I’ve always refused to have a commute over 30 minutes. I don’t think it’s a good use of time.

    For those of us who don’t live in high enough density areas to take transit, and lack safe bicycle routes to work, telecommuting is fantastic.

    I try to telecommute even with my sane commute at least once a week. Saving that hour is nice.

  11. Battra92

    I carpool twice a week. Honestly, I wish I could do more since the money is good and I get good conversation.

    Honestly, I would LOVE to telecommute but you can’t do PC hardware tech work from home.

  12. Carla

    I live about five miles from work so at least I have that going on. As a worker bee, in an architecture firm, working from home is not an option – no way no how. 🙂 Biking would be an option if I was more of an athlete (I live way in the hills) and not afraid of the cars zooming up and down the blind, narrow, curvy, hilly roads. Maybe one day when I secure better health insurance. Public transit is an option every now and then though It takes an hour on three modes of transit verses a 15 minute drive which is crazy. I do a lot of trip combining (doctor appointments, food shopping, etc) so I drive most of the time.

  13. Cij

    What if you take public transportation to work every day? It’s already carpooling in a sense.

    I’m not sure how this tip is going to help me, but it certainly is a great idea for people who rely on cars to get around.

  14. Nick

    If you’ve got a reliable, normal person available to carpool with, this isn’t so bad. You also have to factor in the time lost by driving out of the way, waiting for rides, etc. Even if it’s not much, it adds up (just like the money you save by carpooling).

  15. Alex Gierus

    The price some people pay for driving to work is incredible. You mention wear and fuel, but in big cities parking could be the largest expense. In my city you can pay $10 if you find a bargain, and it goes up fast especially if you want indoor parking. Monthly passes alone cost over $200. It’s like you have to work a day or two per month just for the priviledge of parking at work. Another day or two for the fuel and wear and it’s costing over half a week of work just to pay for the hassle of getting back and forth!

  16. Naturally Frugal

    I’m lucky enough to walk to work everyday, and try to take the bus to the market when I can. I will be moving to an area will I will have to commute about 15 minutes each way, but look forward to sunny days when I can ride my bike, or on days when I have time to take the bus.
    Carpooling and cutting down on wasted gas not only saves us money, but it also helps out the environment. People can also look into vanpools, rideshares, or other transportation options their company or community offers.

  17. AT

    Ramit, you may be saving even more than you say. This information from AAA has estimates of cost per mile and provides instructions on how to calculate your own. Clearly these are just estimates, but still emphasizes the point

    @Nick – Even if you factor in those things you can still come out ahead. As an example, I just started carpooling with someone in a nearby town that lives 6 miles away. This 6 miles adds 15 min to my commute in the morning and evening (total of 30 min). I usually drive to work 3 days a week. If my carpool partner and I alternate each week, the total number of EXTRA time I spend on the road is about 40 hrs (30min * 3 days/wk * 25 wks/yr). Total amount saved by not driving every other week, about $1000 (conservative estimate based on $0.48 per mile from the link above). $1000/40 hrs = $25/hr. Not a bad pay rate, if you ask me. Yes there are some estimates in the math but the point is, as Ramit has mentioned before, calculate this stuff out and you will be able to make more effective decisions rather than making hand-waving assumptions and having those as a barrier.

  18. AT

    D’oh! Link that was supposed to be above:

  19. steve

    To those who live close to work and would be open to biking if they felt safer about it:

    Read the book “Effective Cycling” by Forester and practice what’s in it., or look at the material by the League of American Bicyclists. Chances are the reason you are uncomfortable around the motorized traffic is because you are lacking a few fundamental concepts about traffic flow and a few fundamental bicycling skills.

    BTW, I commute 6 miles round trip on my bike year round and through the Massachusetts winter. it’s really not that difficult and it’s not uncomfortable, you just have to know how to dress and how to equip your bike for carrying things and to be visible to other road users. Plus you need to read Effective Cycling. Believe me.

  20. Andrew


    What type of attire do you wear to work? What do you do to arrive at work clean and unwrinkled?

  21. Pierre

    I worked from home, and (due to my industry / position / career goals) eventually it did not work out. This was not due to the semi-complex psychological nature of working from home (or visiting the office only occasionally), which I actually came to accept and eventually enjoy. Like homeschooling, it’s not for everyone, but it’s fantastic if you can do it.

    With goal of saving money (when gas prices were high) I fixed my bike and ride to the bus, which I then take from SF to South SF, and from there to the front door of my office. It’s great, safe (due to the side streets I can take) and a form of forced-savings in better health / longer life.

    Overall, this strategy worked for me.

    Someone may wish to pull the NY Times article on why people continue to take public transportation while gas prices have fallen (to $1.70!).

    Good planning,

  22. Karen

    Friend, your attitude about frugality websites and disdain for saving “One dollar per day” because you find that much in your shoe every day is exactly the attitude that got us all into this mess in the first place. “Why not spend a few hundred m ore dollars per month and have this REALLY nice house…you deserve it”, etc. Take care of the pennies, and the dollars will take care of themselves. You are not revolutionary. Wisebread and other forums have been covering your tips for years.

  23. kevin from minneapolis

    Use mass transit if you can. I can, and the math works out in my case so that whatever the price of a gallon of gas is, that’s what I save in riding the bus to work per day. Even with gas now at $1.70 or so in the Twin Cities, that’s almost enough $ saved to pay my cell phone bill.

  24. Brett

    You lost me at Al Gore. He is a fraud and expends more energy by far than most people. Far worse than his hypocritical lifestyle is his preaching and finger wagging to all of us little people while he makes millions selling carbon credits to people stupid enough to try to assuage thier guilt by paying him for their sins of using energy.

  25. Ramit Sethi

    Talk about missing the point of the post.

  26. ngk

    I take public transit (100% paid for by my employer), so no costs to cut there. My job also has an option of at least 1 day a week telecommuting for anyone with more than a year’s seniority. We can also work compressed schedules (9-hour days, instead of 8) so that we can take off one day every two weeks. (For example, I take every other Friday off).

    After reading some of the tips, I’m now tempted to use my free Friday for some freelancing – maybe tutoring.

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  28. James

    I’ll chime in about working from home, since people who haven’t tried it so often have a rosy picture of what it’s like.

    For some people it’s heaven. Glorious idea.

    For others though, it’s hell. Infinitely destructive.

    I think a hybrid approach–where you work some in the office, some at home, maybe some at coffee shops, etc.–is ideal. But consider the case of a completely decentralized team (multiple cities/states/countries) building something NON-web 2.0 (yes, brick and mortar entrepreneurship still exists!). Your team saves money on commute, but everyone slowly goes insane from lack of communication, collaboration, camaraderie, connection, and any other c word you can come up with. 🙂

    In that case, they lose a huge amount of money given their decrease in productivity.

  29. Susan

    @Jennifer — you wrote, “…we would have to pay full price for a bus pass. I’m not sure if that is cheaper than just buying gas every few weeks or not.”

    It might not be — but you would also be saving wear and tear on your car, and possibly you’d save on your insurance — I get a %15 discount because I drive so little during a year. I also don’t have to pay for parking or tolls, but maybe working at a university you park free.

    I work about the same distance from home that you do. I take the bus every day and I love it. If I were you, I’d add up the numbers and see if it’s worth a try. You might be very pleasantly surprised.

  30. Lise

    I’m not sure why I have’t commented on this post before, but I should have: my husband and I carpool almost every day. He works about 30 minutes farther away than I do, but he drops me off and picks me up at work on the way to and from his own job.

    I love it. It’s a great arrangement, and not just financially. For one, we have a time everyday where we can talk, with few distractions. Secondly, it’s a great excuse to not stay at the office late. “Sorry, gotta go, my husband’s in the car outside.”

  31. Margo

    I don’t know Steve, but I commuted on a bike for about six months last year and will probably start up again as soon as the frost quits. My office is business casual (I wear slacks and dress shirts with heels every day). I brought my clothes in a backpack (strapped to a bike rack with bungee cords – wearing a backpack is no fun when it’s warm out). My trip was only 4 miles each way, so I didn’t need to shower when I arrived at work, but now I live about 12 miles away – my employer has shower facilities available.

  32. Tom

    This is off the specific topic, however, quoting from the article:

    “Just remember, your boss doesn’t care about you — he cares about how much you can (1) help the company and (2) make him look good. Frame your request accordingly.”

    This is so true, and should always be kept in mind in all work contexts/business relationships. I’m sure our bosses/companies do care to some degree, but realistically, this in the basis of our relationships in the first place. It goes both ways too – I do care about my boss/co-workers personally, but if I wasn’t being paid anymore… Anyway, keeping this in the forefront of our minds makes us better employees, and should always be the basis of anything you ask from the boss.

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  34. Maria J. Fay

    Excellent tips! Thanks for sharing this wonderful ridesharing blog.