May 04

Frugal Tips: Carpooling

It seems that one of the main things I read on personal finance and blogs dealing with frugality and saving money to tell you ditch the car when it comes to commuting. You move as close to possible to work and then use a bicycle or walk to commute. I fully agree that this can cut spending down tremendously especially when your cost of fuel plummets as well as the maintenance on your car for when only using it for long distance trips when necessary.

Right now that is just not in the plans for me; as much as I would like it to be in the future. So I’ve been looking for other ways to cut down on the costs of commuting. I have looked into a few mass transit options and while they are less than convenient, I will admit I still haven’t fully researched those options.

But this leads me to a new solution: carpooling! I’m lucky that I have coworker that lives around me that is also looking to save some money and is willing to carpool with me. We are going to start out with each just doing 1 day a week, so I’ll be driving 4 days a week instead of 5, not a bad way to start.

Here’s the current breakdown:

  • My drive to work is around 16 miles each way, for 32 miles round trip
  • That’s around 160 miles a week just from commuting!
  • 52 weeks in a year, but I’ll use 48 to account for holidays, working from home when it snows, etc: so that’s 7680 miles a year – just from commuting

    Here is how my new commute will look:

    • 32 miles round trip for 3 days a week: 96 miles
    • One day I will be getting a ride
    • On the day where I drive my coworker, it will be a 44 mile round trip
    • That totals to 140 miles a week, so I’ll save around 20 miles a week
    • That will have me end up around 6720 miles a year – almost 1000 less miles!

      Just for fun, if we both decided to do 2 days a week it would like:

      • 32 miles round trip for 1 day a week
      • Two days I’ll be getting a ride
      • Two days where I drive, it would be 88 miles a week
      • That would be 120 miles a week
      • I would now be all the way down at 5760 miles a year

        After looking at the numbers, it’s really amazing that more people don’t take advantage of this! Now I know it’s hard to coordinate a lot of the times, and like I said – I’m lucky to have a coworker that lives such a close distance to me. But it’s amazing when you are sitting in traffic and every single car only has 1 person in it. Imagine how much better the traffic would be if only 25% of those people could carpool a few days a week? Or if we stopped using the car to take 2-3 mile trips to the grocery store and instead took bicycles.

        As you can see from the above picture, carpooling has gone down dramatically over the last thirty years. If you can carpool, take mass transit, or even ditch the car all together and take a bike to work – I would highly recommend it. At an estimated cost of $0.50 a mile, these savings can really add up over the course of employment.

        Photo Credits for this post: Pixabay
        May 01

        Unbury Me!

        Now I don’t know if you are like me – but if you read my first post you’d know that I hated the thought of student loans. I didn’t want to look at them, I didn’t want to acknowledge them, I just wanted them to go away and pretend they weren’t there. Now that I have finally acknowledged them I want to establish a target of actually getting rid of them (not just by hoping they magically dissapear – though if this somehow did happen you wouldn’t hear me complaining).

        While living at home is not the optimal solution that I was looking forward to after college, it helps me keep my spending way down and allows to me to put that money towards my loans instead of paying a full rent every month. In this post I’m going to tell you exactly how I plan on paying off these loans, and hopefully establish some sort of timeline!

        I have come up with a few scenarios to pay off my loans using the awesome yet simple website called unbury.me. It’s super easy to use as well as modifying once you have already put in all your information – and it’s free. I’m going to be using the avalanche method to pay off my loans, and while the psychological aspect of using the snowball can have its advantages, I think for myself I’ll gain the biggest psychological advantages by paying the least amount of interest possible.

        The first scenario I’m going to talk about will be the conservative method of paying off my loans, with trying to aim for $1500 payments a month: I will have fully paid off my loans in about 5 years, but have paid about $17,000 in interest still. That really sucks – but the 5 years part doesn’t sound TOO terrible.

        The second scenario for paying off my loans would be aiming for $2000 payments a month: This brings me to a debt free solution over a year ahead of the $1500 payments! I also end up “only” losing near $12,000 in interest – a savings of $5,000 which would be great.

        Just for fun, I’ve also done a scenario where I somehow manage to make payments of around $2500 a month just to see how much of a difference that would make:
        My loans would be fully paid off in just 3 years, and I would end up paying less than $10,000 in interest. Wouldn’t that be awesome? I don’t see this scenario ever playing out realistically though, as great as it sounds. With my fixed expenses it would basically be living with zero spending money each month. The constantly rising cost of gas wouldn’t help my cause either.

        I think what I’m going to end up targeting is somewhere in between the $1500-$2000 payments a month and hope to have my loans completely paid off sometime in late 2017/early 2018. Hey, maybe I will even have months where I can strive to get my payments over $2000. I know next month when I use some of my overly large emergency fund to completely eliminate one of the loans I will definitely be over that amount. I hope you too will follow me along in my journey to become debt free and maybe even make progress on your own if you are in a similar situation!

        Apr 30

        How to Waste all Your Money on a Giant Banana!

        Have you ever wanted to win at a game so bad or just prove somebody wrong that you just kept insisting? I’m sure we’ve all been there before, or even gone so far in an argument to finally realize you are wrong even though you were so confident you were right? The following man may have just taken this to the next extreme, one that I would hope nobody would ever do:

        http://abclocal.go.com/wls/story?id=9085164

        Yes, you just read that story correctly. He spent over $2600 on a carnival game trying to win an Xbox Kinect which can be bought for around $150 retail. If he wanted it that badly, he should have definitely went out and just bought the thing!

        I’m going to go ahead and assume he was right about it being rigged, but that still doesn’t justify this crazy decision. I mean, I’m not sure how the carnival itself could offer such a simple game and an expensive prize and actually hope to make a profit. They are in the same business as a Casino – making more money than they lose. But even after that point, you should file the complaint after spending maybe $20…tops.

        I know nothing about this man or his life situation, so I’m not going to make any assumptions – but when your entire life savings is $2600 you probably shouldn’t be deciding to blow $300 on a carnival game even before going back to home to pull your savings out. Hell – you probably shouldn’t be spending $300 on any one purchase with that type of savings unless it is absolutely critical to your job, housing, or life. Though a counter argument would also be that you could end up his situation anyway, with decisions one might see as ‘wise’.

        You almost feel bad for the guy, knowing the game was probably rigged but I also just can’t help but laugh when looking at the story and his persistence. As you read through my blog, I hope that we can find such ‘crazy purchases’ that I make (though hopefully not quite this crazy) and maybe you can share some of your own! It’s all in my journey to becoming more frugal and making my way towards financial independence. Let’s also to make a promise to never blow our emergency funds unless it is an actual emergency – I don’t think wanting to prove a carnival game is rigged or winning an Xbox Kinect counts as an emergency.

        But hey, it did seem like a pretty sweet Rastafarian banana? Right?

        Photo Credits for this post: Pixabay
        Apr 28

        Weekly Spending – 4/21/13 – 4/27/13

        I’m going to try doing a post every week that features how much I’ve spent and what exactly I’ve spent it on (to a certain amount of detail). I feel like being able to stare my finances right in the face will help me cut down on my spending, so I can put that money towards my ultimate goal: paying off all these stupid loans!

        At the end of each month, I will try to do a summary to see how much money is actually being used for things other than my necessary bills. Without any further interruption, I will post my spending for this week:

        Sunday 4/21:

        $13 – Gas
        $38 – Concert Tickets

        Monday 4/22:

        None

        Tuesday 4/23:

        None

        Wednesday 4/24:

        None

        Thursday 4/25:

        $25 – Doctor’s Office Visit Co-Pay

        Friday 4/26:

        None

        Saturday 4/27:

        None

        Total Week Spending: $76

        Seems like I’ve definitely picked a good week to start doing this! Lately I’ve really been trying to cut back on going out for lunch, dinner, etc and instead seeing if friends just want to hang out at their place which can still be a great time!

        The gas cost was from visiting my girlfriend and the return trip. The concert tickets are for in May and for only $18 (plus fees) each, I couldn’t pass them up. The doctor’s visit was a bill I finally got mailed to me from back in March when I had a cold that I just couldn’t seem to kick. I wasn’t sure how much I would be paying with my new insurance, it was the first time I had been to the doctor’s since having my own insurance. I’m pretty happy with my spending this week – I kept it low and I’m hoping this kind of week will actually be on the high end for a normal week!

        Photo Credits for this post: Veezzle
        Apr 27

        My Current Assets and First Steps

        I figured that another good way to start off would be to currently say what I actually DO have, maybe also a slightly more positive topic for myself too! In high school and throughout college, I tried to save as much as possible. I paid off my car in full and I have never carried a balance on my credit card. I now own a rewards credit car that I put almost everything on except for gas. That card gets fully paid off whenever my bill is due so that I don’t have to pay any interest. Might as well take advantage of that 1% cashback, right?

        Other than my massive student loans, here is what I current have in my bank:

        • Checking Account: $2,000
        • Savings Account: $22,000
        • CD: $550

        Now I know that most people reading this are probably going straight to my savings account and saying that I have way too much in there, and now I would fully agree with you. I only have an interest rate of 0.90% in my savings account. I plan on lowering my emergency fund to $15,000 and maybe even $10,000 while I am still living at home.

        Next month for my loan payment I fully plan on paying off  ‘Private 3’ loan for $3,067 @ 7.92% on top of making my regular loan payments for the month. This will bring my emergency fund down to $19,000 which I’m still perfectly fine with at this time.

        For retirement savings I currently have:

        Employer 401k: $3,186
        Roth IRA: $5,548

        I’m currently contributing 6%  to my Employer 401k, and they match with 3% – the max matching I can get at 50% of employee contribution up to 6%. I’ll take that free 3% and I’m fine with my 6% contribution while I’m still paying off my loans. I maxed out my Roth IRA this year, pulling from my savings account. The money probably would have been better off going into a loan because that’s guaranteed making 7.92% interest while the chances of my Roth doing better than that are pretty low. Maybe it’s just the psychological aspect of starting to save that I enjoy though, similar to to my problem of keeping too large of an emergency fund for my current situation.

        Photo Credits for this post: Ruth Bourne @ Veezzle