Living on Less Than $28,000 A Year: How our family of six survives (and even thrives) on an income that is less than half the national median income, and what the government calls “below the poverty line” (less than $29,990 annually) for our family size. [Read other posts in this series here.]
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So far in this series, we’ve covered:
- Finding a money management system that works
- Trusting God with your finances
Today I’m sharing how our family saves on transportation costs. Remember, not all of our ideas will work for your family, but maybe they will help you think of some ways to save that will work for you.
Limit Your Vehicles
There are lots of costs associated with owning a vehicle: taxes, tag fees, insurance, gas. We have chosen to limit our expenditures by having only one vehicle. This won’t work for some families, but because I am a stay at home mom and my husband works within 30 minutes of our home, we can manage.
How We Make It Work:
Planning-Each week I plan our activities and errands based on my husband’s schedule and plans. I plan my errands like grocery shopping for the morning of his day off and we plan a fun family activity for later in the day. I also plan one day to take him to work so I can take the kids to scheduled activities like swim practice during swim season or church youth group.
Communication- Communication is crucial. Having one vehicle means that I can’t just take the car because it’s sitting in the driveway. This happened one day last week when my husband was scheduled to go to work at noon. I decided to make a spontaneous trip to a local park for a walk assuming that I could return home just before he needed to leave for work.
He called me in the middle of my walk to let me know that he needed the car to run an errand before work. If I had taken the time to ask, I wouldn’t have had to cut my walk short. I was reminded once again of the importance of talking about our plans with each other.
Contentment- My attitude is crucial to making this work. It is very inconvenient to have to plan errands and outings rather than just jump in the car and go when I think about it, and I can easily feel frustrated or bitter about it.
It helps to remember that I am helping to save our family money by using less gas and avoiding leisure shopping trips. I find that spending more time at home also brings more peace to my life, enables me to get home schooling accomplished and gives me more time to do money saving tasks like cooking and baking from scratch or hanging my clothes to dry.
Ditch the Car Payment
Not only do we have only one car, but our car is paid for. It was easier for us to pay cash because we chose an older model that would serve our needs, but which doesn’t have any extras. You may really love having a newer and fancier car, but if your newer car is sabotaging your financial future, it may not be a good idea to keep it.
If you currently have a car payment, why not try to save every bit of extra money you can (use some of the ideas here for extra cash), sell your current car and purchase a car with cash. If you are upside down in your loan, Dave Ramsey suggests either saving the money for the difference between what you can sell the car for and what you owe, or checking with your local credit union to see if you can get a small loan to cover the difference. You will still have debt, but the payment will be much smaller.
Change Your Insurance Coverage
Another way we save on transportation is by keeping our insurance coverage at a minimum. Having an older car is cheaper to insure and we don’t need comprehensive coverage. We keep the minimum insurance required by our state and have a high deductible ($1000) because we have $1000 in savings to cover it.
You may have a newer car or a loan, so you will have to keep your comprehensive coverage, but take some time to talk with your agent about ways to lower your costs and call some other companies to compare quotes.
Use Alternate Transportation
One great way to save money is to use alternate transportation when it is available. Some cities have great train and bus systems that are relatively inexpensive and can save on your gasoline expenditures. You may even decide that you can sell one of your cars.
We recently found Megabus, which my husband used to take my son to visit a friend in another state for spring break. If you schedule your trip 2 months in advance, the tickets cost just $1.00! Tickets purchased just 2-4 weeks in advance may cost as little as $5.00-$8.00.
When I picked up my husband from the trip, we met a family who were taking the bus to Orlando for a Universal Studios vacation. The bus stopped at a hotel which had a free shuttles to the parks, so they had no need to rent a car. Brilliant!
How do you save on transportation costs? Leave a comment and let us know. 🙂
next post: Save on Non-Food
Click here to see all the posts in this series.
Shouldn’t a budget also have a line item for saving for the next car, once the current one dies? That could be a substantial amount to save every week/month, so I think that’s important to point out. Also (as I think you might have mentioned) more $ for future maintenance as some repairs can be several thousand dollars.
Great point Elizabeth – thanks for the reminder!
One great way to save on insurance (Car, renters, house etc.) is to contact an independent agent, like through a bank, to have them check with multiple companies to see who can get you the best rate. Just because you have been with one company for years does not mean that you are getting the best rate compared to other companies. I know that Wells Fargo is one of the banks that offers independent agents and you do not have to have accounts with them to get your rate checked. I currently work for a small community bank and we offer our own independent agents to check with lots of insurance companies. Never hurts to look!
LOVE Megabus. Our daughter went off to college this fall and we were thrilled to discover that she is able to take Megabus home. She doesn’t have a car and can only sometimes find a ride but it has given her the opportunity to come home to attend some events back here when it would have been too exorbitant to either go down and get her or a train ticket. She takes a free shuttle from her campus and free city bus (for all college students) right to the station. It seems a trivial thing but when you’re considering one college over another it might be worth it to take a look at transportation costs.
I love Megabus too because it allows me to visit my girlfriend every year around my birthday! The tolls and gas alone are more than twice what I spend on a ticket, not to mention the wear and tear on our older car.
We only have one car and homeschool as well. We cut our transportation costs by using our bicycles! Our gas costs went from $300+ a month to $240, simply because my husband bikes to work and back. I won’t lie. The initial costs of the bikes were a bit more than I expected, because they are not “cheap” bikes, but good quality. But I really like my bike. Today, I just started something new. I rode my bike to the grocery store. We’re hoping to cut our costs from $240 to about $200 with this simple step. Communication is very important, but oh so worth it.
My husband and I have been sharing a car for over 5 years now. It started out as a temporary experiment but found that it saved so much money. There have been challenges along the way, I have asked for rides to places from friends who live in the area on occasion. We’ve even had to rent a car a few times but even then it’s so much cheaper than owning 2 cars, plus we paid cash for it over 10 years ago so no payment. We just keep fixing it! I say let’s just drive it into the ground!
We don’t have a car payment. We have two older, high mileage cars. Great not to have a car payment, the problem is, it feels like we have a car payment, because we are constantly paying for car repairs on these cars, and we can’t get our emergency fund built up because of it. We feel stuck.
Depending on how much you are paying for repairs, it may be better to sell one or both of them and get another car, but take a look at the actual numbers. We paid several hundred dollars in car repairs last year, but it was still much cheaper than a car payment and our insurance is considerably less as well.
My husband rides his bie to work, and I ride my bike everywhere, usually with my kids in the trailer. Gym, preschool drop off/pick up, target, grocery store, drug store, farmers market, and almost anywhere within a 5 mile radius. The car gets used once/week for my big once/week grocery run. Other than that, it’s all bike! Not only do I save on gas, insurance (our rate is determined based on miles/month we drive), maintenance, etc., but it limits impulse buying since I can only buy what fits in the trailer 🙂 And we’re healthier, which will save us in health care costs in the long run. Of course it does mean our food needs are higher 😉 But I think we did the math and factoring everything in, are probably saving about $1000/year, maybe more.
Love it! What an awesome way to achieve multiple goals at the same time: save money, get exercise and enjoy the outdoors.
Others have already given great advice about driving habits (I do my shopping on the way home from work so that it’s all on one trip and definitely practice the efficiency tips Andrea mentioned) and I’m also a big fan of public transportation when feasible. I just wanted to add one thing.
I drive a hybrid, which is great, but most people think they’re too expensive. My tip is that if you want to buy a hybrid vehicle, buy the car when the main battery is about to go off the factory warranty (in my case, 2006 Honda Civic, I think it was 80K miles). Because the warranty is about to expire, the cost of the car drops significantly. I paid for my hybrid in full right away because of this timing trick, so now I get to just enjoy the gas savings.
GREAT tip Sharon, thanks!
We live in a small town, and my husband and I both live close to shopping and our jobs. We qualify for a low mileage discount on our insurance. The mileage discount may vary with different agencies. But if you drive less than 15,000 miles a year, you might qualify. But you usually have to ask for it, because most agents assume everyone drives a lot and don’t even think to offer it to you.
My husband has a motorcycle for his commute and i have a vehicle. We purchased an extended warranty for my2001 suv and it has paid for itself after two repairs, my husb, works an hour away and his MC saves so much in gas and tolls. If his bike has issues he carpools with a co worker. We save 185 a week in transportation!
Two ways my hubby and I save on gas: keep the tank full (the gas guage is telling the truth, it really does drop faster when it’s already low, although I have no idea what the science behind it is);accelerate and decelerate slowly and touch the brake as rarely as possible (this is easy for us, since we live in the country, but city people can still do this to a certain extent if they work at it).
We have one vehicle too, since September when I sold my car. Our truck has been paid off since 2010, but we are beginning to think about trading it in for another car with more seats. 🙂
We save on flights back home (California –> Maryland) by buying on Tuesdays or Wednesdays, and traveling on those days also. We try to buy well in advance, from Southwest which doesn’t penalize us if we have to change our travel date for some reason, and allows us to check our bags for free.
I LOVE Southwest Airlines–so customer friendly!
I love this post! I too have a late model car that is completely paid for. It’s a 2001 vw Jetta and runs on diesel. It’s been paid off since 2004 and while my friends keep getting fancy new cars, I’m happy that my money is going elsewhere. I’m off on disability right now and on a significantly lower income, I’ve never been happier that I don’t have a car payment. Thanks for sharing all your ideas on living within your means.
We’re lucky to live close to basically everything! My husband is fifteen minutes away from work, he cycles back and forth everyday. Not only are we saving on gas but he loves doing it and is a serious cyclist. When it’s time to make a trip to the Grocery store we load the kids into the bike trailer. Dad pulls the kids, because he’s much stronger than me, I ride behind. After shopping we load up the groceries into the back of the bike trailer and/or carry them in back pack’s. It’s about 5 miles round trip. Saves on gas and we get to spend quality time with the kids while still getting exercise. Perfect!
A moped or scooter is a really great form of transportation in cities! My husband bought a used vespa for a GREAT price. You could probably pay for one in cash with a little patience and saving, and of course diligent searching online. our insurance for the whole year is $300. he uses his vehicle throughout the day for work (he delivers) and he has been able to cut his gas bill down drastically. he used to spend almost $60/week in gas with the car and now spends $6-8 because the vespa gets about 60miles/gallon! there are some upfront costs such as a good helmet, protective jacket, etc (we were not willing to save money and risk his beautiful face — but found great gear for awesome prices at motorcyclecloseouts.com). but this choice has saved our family tons so far!
For those that may think the bus isn’t a good idea, consider the cost of maintenance for a car. One oil change, even on sale, negates the savings on bus fare. I haven’t had a car in many years and when I took the bus I bought a monthly pass which can be bought from pre tax dollars by the way, and I saved a bundle. Not to mention my commute became productive time instead of stressful sitting in traffic. It also encouraged me to walk everywhere. I went from never walking a step to walking 3 miles or more on nice days just for fun because I didn’t feel like waiting for the bus. I walked to the mall, the grocery store, even to friends houses. Unfortunately I live in the country now. No busses. But I still walk!
Also, for those who have significant others that hog the car, try dropping them off at work or finding a carpool or park and ride. Most of the time my husband is at work the car is parked. If I can run errands downtown after I drop him off it’s not a waste of gas, I still get freedom one day a week or so, and we save all that money on another vehicle. Just my two cents. It’s hard to do, but if you’re really broke, it can work, you just have to work at it 🙂
Where we live (D.C. metro area), it was cheaper for me to drive my husband in to the city for school than for him to take public transportation. It took an hour and a half out of my day four days per week and required that I get a newborn ready to go, but saved us about $80 per month plus the cost of parking if he had driven himself.
Loved reading this Kimberlee! My husband and I recently went through Dave Ramsey’s class and implemented some of the same things that you described in this newsletter. We had a newer car (a 2010 model) that we were making payments on. I decided that I could give that car up, and we managed to pinch pennies and save enough to pay cash for another, older model. Once we had done that, we sold the new(er) car, and paid it off (with some left over)! We no longer have a car payment! It’s an awesome feeling to have that money left over each month, as well as the difference in insurance. That money comes in so useful for other, more important things. We were also able to increase our deductible, knowing that we DO have our emergency fund.
Love reading your newsletter each week, you’ve given me some things to think about. Glad to know we’re not the only ones pinching pennies…
Way to go Dana!
Be careful about your insurance! Your state may have decent liability limits so going the minimum is fine, but make sure to talk to your insurance agent about how much coverage you need. I worked as an agent’s assistant for about a year and it was awful to see that someone I knew was in an accident with only the minimum coverage. The person that ran the light and hit him was uninsured. Thankfully, he left the hospital without even a broken bone. Life would have been made much more difficult than having to replace a vehicle out of pocket if he had been hurt. A lot of people don’t understand how the different coverages work and only buy based on price. Please, please do some research and educate yourself on the laws in your state and read the fine print.
Thanks Keli. That is a great point.
Keli, I couldn’t have said it better myself. I worked as an agent for 7 years and the minimum coverage normally isn’t enough. Keep in mind that you’re not only insuring your vehicle, but also yourself. In Louisiana, the minimum limits are 15,000/30,000/25,000. If you’re in an accident with 4 people, the most your insurance will pay is 30,000 per ACCIDENT. That’s only 7,500 per person. If each one iPad to go to the hospital, I’d be willing to bet their bills will be over 7,500. They can come back and sue for the remaining balance of their bills. Also look into combined single limits!
Yes, be careful on this. I was in an accident a few years ago that changed my life. I had great insurance…for the other guy-but I did not have UM (uninsure motorist). The guy that hit me was insured, but his insurance was minimal and couldn’t cover all of my medical expenses, so it came back on me. If I’d had UM, I would have been fine. In Florida, they don’t make that clear. Remember the point of insurance is to be there for you when you are injured–It’s just an added expense until you really need it. Thank God my daughter wasn’t in the car. Great tips on this site! Just wanted to share my experience. Please don’t skimp on insurance, especially if you have children in the car.
Thanks Julie! Great point.
If you are in an accident that is your fault or have a deer hit and your vehicle is not driveable, or a total loss, can you afford to rent a vehicle during repairs or pay for a new one vehicle? If not, comprehensive and collision insurance might be a good idea.
Even if an accident is the other person’s fault, their insurance may deny liability. Your coverage would help you fight them to pay for your damages.
Good point Jerry, but yes we do have our emergency fund in the event that we need to rent a car, plus our auto insurance provides a rental car in the event of an accident and it is only a few dollars every 6 months for this coverage. Thanks for bringing this to my attention though. 🙂
THANKS for telling us about Megabus. That is awesome! Finally, a low-cost way to travel.
I think having only one car (paid for in cash) is a great idea. My husband is a firefighter and works 48 hour-shifts in a city about 45 minutes away. If we only had one car that would leave me without a car for two days at a time (or more if he went straight to his second job). I wish that it was something our family could do because we could save so much!
The way we try to save on transportation is to run all our errands at one time, that way there isn’t any backtracking. I will hit up the grocery store(s) and anywhere else I need to go that week (pharmacy, local hardware store to buy dog food, etc.) all at the same time. I save money and time by not having to drive back into town (not a long drive but it adds up with gas almost $4 a gallon).
We have been functioning with one car for about a year now. Not only has it saved us money, but it has also forced us to slow down our pace of life and prioritize our commitments. It has been a huge blessing for us.
For our cross country trek to see family this summer we have chosen to fly in order to maximize our visit time. To minimize the financial burden I have been checking flights daily and done extensive research on when is the best time to buy and to fly. We also have been tucking away most of the extra cash that we get and that adds up!
We are so excited that my husband’s employer is going to be moving to a location that is less than a mile from our home. He will walk or ride his bike to work and will share our second vehicle (which is paid for) with our teenager.
I also try very hard to just stay home. We have a newish vehicle and are trying to limit how many miles we put on it in a month.
I would love to have a job where I could walk or bike to work! I could really use the exercise.
When my partner and I moved from a major city with a thriving public transport system to a smaller, more car-centric area for graduate school we decided that if we had to get a car we would only have 1. We’ve managed for almost 2 years now (1 more to go) sharing the car, even though we both work and are in school (different schools in the same city) it’s worked out ok. I ride my bike a lot when it’s nice outside as my job is close to home and school is walking/biking distance and my partner takes the car as her job is several miles on the highway.
While there are some days when I wish we had 2 cars (for whatever reason) I try to remind myself that the monetary savings is significant – after the 3 years of living in this area we will have saved close to $6,000 only including insurance and gas, if I were to add in possibly maintenance it could easily have give up another thousand dollars. Another perk is that we get to spend some extra time together. Between school and work it’s nice to just have the 10 minute car ride, when one of us is dropping the other off, to catch up about our day.
Spending more time together is my favorite aspect of owning only one car. 🙂
Having a car, insurance, maintaining it, gas and all things to do with a car is expensive. I live in the province of BC in Canada and its probably the most expensive province to live in plus the area I live in. My mom and I were thinking about getting rid of our old (1996) car but still contemplating if getting a monthly bus pass is cheaper. Our bus system here is very good. We still have our car… and thinking maybe to use it till it no longer functions then possibly do the no car route.
When considering public transportation do the math. Sometimes it’s not cheaper. We’ve found that since my oldest daughter’s college is within 5 miles of our home it is cheaper for us to take her to school and pick her up then it would be for her to take the bus. It also saves her time which helps her keep her grades up. The drive takes 10-15 minutes depending on traffic. The bus ride takes at least an hour. Don’t forget to calculate the worth of your time! On the other hand a friend of ours gets a free bus pass from her company (and would have to pay for very expensive parking) so she saves a lot of money by taking the bus. Her 20 minute commute is converted to a 1 hour commute but since the bus is free the savings is well worth the extra 80 minutes a day in commute time.
Good point Judi. Thanks!
oh im so bummed megabus is only mainly in the eastern states! 🙁 i dont like to drive long distances so i cant travel unless my husband can go or if someone comes and gets my kids and i… i was so excited to look into megabus :(. thank you for sharing though!!
Maybe you could contact them and see if they have plans to expand.
My hubby used to drive a moped to work and school. It was cheaper up front than a car, amazing gas mileage and the insurance was cheaper too.
I have been fortunate enough to live in an area where i can walk to grocery stores and work. If i need something big or special, i car pool with my sister to get what i need. I have also recently bought a bike (100 dollars off the original price) , which has allowed me to go to the larger stores (with more sales) and go farther. I have not had a vehicle for regular use in 6 years, and between the cost savings and the weight loss (25 pounds from my heaviest) I am so glad i don’t have a car.
But i also don’t have kids, and i know that it is hard where i am from to go without a car (easily -30c in winter and +30 in summer) when you have a young child.
Combining trips saves money on transportation expenses. It requires some planning, but it sure cuts down on the back and forth little trips, which, in addition to wasting gas, add wear and tear to your car. Also, keeping up to date on inexpensive, routine maintenance is a great way to avoid future expensive repairs.
If you absolutely cannot avoid a car payment, keep it to just one car… too many people end up in the trap of having two cars and two payments.
Not driving a bigger, less efficient vehicle than you absolutely need also saves money.
We do need two cars since hubby works over an hour away and it is incredibly hard to have to be out of the house when he is home.
However – both are paid for. We were able to do this by shopping at a local auto auction. People think we are crazy, but we go, we look cars over, we pray pray pray and then we bid. Our last purchase there was for just $2800! It is a 2003 larger car, in great shape, and runs very well – this was a good use of part of our tax return and meets our needs, just wish it was better with the gas milage!