Personal Finance Help – Reduce Transportation Costs

Wednesday, February 3rd, 2010 at 7:37 am

The single greatest way to reduce transportation costs.

We all need to drive. Well, most of us do. I know that in order to get to work I need a vehicle. This does not mean I need a luxury sports car or a big SUV. My ego doesn’t need to be enlarged nor does my bank account need to be reduced. There is a difference between buying a car for travel and buying a car for status. Your finances can be impacted a great deal depending on why you bought your vehicle.

I will save you the time of reading the entire article to find out the single greatest way to reduce your transportation costs, so here it is: Downsize. I know you may be a little disappointed to hear that this is the big tip but I like simple, and simple usually saves you money. Consider the following example:

We have two people. Example 1 buys a big SUV and example 2 buys a small compact car. Example 2 just happens to be me.

Example 1:

2006 Jeep Grand Cherokee $34, 210

Car payments $570

Fuel $224 (20 mpg)

Insurance $200

Total $994

Example 2:

2006 Kia Rio 5 $13, 000

Car payments $217

Fuel $118 (38 mpg)

Insurance $130

Total $465

You can see that there is a considerable cost savings when you compare example 1 to example 2. In fact, the monthly savings is $529, which works out to $6, 348 per year. If you were to invest that for 20 years at 8% you would have $314, 198.08. The full example can be viewed by clicking the link in the resource box. Also you can get a list of compact cars you can buy for under $20, 000 USD.

If you are in need of personal finance help then perhaps you should consider downsizing your vehicle. Making this one change could literally save you hundreds of thousands of dollars in the long run. It may be painful, however, the satisfaction of saving money will be well worth the effort. I promise.

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