Hello Everyone!
I am new to the forums, but have followed this site for over a year now. Over this time I have integrated MMM principles into my life; I bike to work, dumped my old phone plan, and cook almost all my food. This has made it only more exciting to find new ways to save money, which leads me to my current situation: Should I move within 1 mile of my new job, or stay at my current apartment which is 7 miles away? Of course, I welcome any and all advice, and will break down how I figured the numbers below.
To help you understand better, here is the scope of my situation:
I recently landed my dream job in my favorite neighborhood in my favorite city (Minneapolis). I just graduated from university with my bachelors, and will be making around $35,000/year at this job. I expect this amount to grow quickly, and I also LOVE my company (excellent benefits, people, and work environment). So my job is a set factor right now. I'll explain more of the benefits upon request.
I live approximately 7 miles away from this job currently. I do not own a car, only a bicycle. I'm about halfway into my 1 year lease on my apartment. Rent+Utilities= $390/month to $405/month depending on season.
Now, I'm looking to move into the same neighborhood of my job, ideally within 1 mile of my work.
I would like to eliminate the need to bike to work. This is primarily to save costs of commuting during the winter months (and to have an all around simpler lifestyle). If I lived in a warmer climate I most likely wouldn't consider moving because I am getting an excellent deal on rent right now. However, winter is expensive. If I were to move into the new neighborhood, the cost of rent+utilities= $550/month to $650/month depending on the season and place.
In the following cost/benefit analysis I am excluding a car option from the equation because:
1. The cost of buying/maintaining/driving/insuring a car doesn't warrant the investment given my current income and living situation. ($150+/month, excluding the price of the car itself)
2. If I had more money in savings I might consider it, however Id rather invest or pay off my school loans with my extra cash.
3. Biking/Walking/Busing are more cost effective options that I should consider those first.
The Bicycle FactorYou all must be thinking, "WHY would you move when you have such a great deal on rent and already commute by bicycle??"
Well, because I've calculated that there is a greater than perceived cost on bicycle commuting past a certain point.
Lets first look at time costs:
My current commute by bicycle is a roughly 70 minutes per day. During the winter, the commuting time doubles to more than 2 hours per day. At a 5 day work week, that means 1470 minutes/month during the non-winter months, and 2940 minutes/month during the winter months. This is a generous figure, as some years the winters can last much longer. Over the course of a year 23,520 minutes (392 hours) would be spent commuting with a bike from my current location.
At my current job my time is worth $15.50/hour. 15.5 x 392= $6076 of time. This is assuming that I could spend my time as or more productively than my work. I would argue its worth much more.
I used this article to calculate the true cost/mile of my bike:
https://www.mint.com/blog/consumer-iq/the-true-cost-of-bike-ownership-0313/I came up with roughly $60/month. For winter months I would need to buy a new bicycle each year, I have factored that into the cost.
SO, $60+$760(in hours)= $820/month lifestyle cost during the winter, and roughly half of that in the summer.
Now, to counter-argue the health value of biking to commute, with the hours saved I could easily plan out a more efficient workout than biking. Going for a run or doing calisthenics offers the same benefit as biking but without the maintenance costs or hassle of a bicycle.
But what if I were to take the bus? Not so fast! From my current location, the metro transit system does not conveniently take me to my work. I would have to transfer at least once, and the frequency is very low. If I transfer twice I will arrive at my work faster, but the commute would still total to over 2 hours per day. This is the same time cost as a bicycle from my current location. An unlimited bus pass is $110/month.
$110+$760(in hours)= $870/month in lifestyle cost. Enough said.
Living withing a mile from work... Would mean:
I gain 308 hours/year that I can freely use to be productive.
I can walk to work in roughly 15 minutes! Or, bike to work in under 5 minutes! This cuts the repair maintenance cost down to almost nothing.
I can choose to not bike during the winter, thus extending its life even further.
In ConclusionLets do the math to see how much I'd benefit by moving to the new neighborhood:
$820/month current lifestyle commute savings (Winter) - $250/month potential rent increase= $570/month lifestyle gain.
$410/month current lifestyle commute savings (non-Winter) - $250/month potential rent increase= $160/month lifestyle gain.
On the modest end,
I gain anywhere from $570 to $160 per month by simply moving. This is huge!!
Now I should also mention that the lifestyle simplicity will bring a greater peace of mind. I wouldn't have to worry about my bike breaking down in the middle of a time sensitive commute (which has already happened several times to me with all the random potholes after the most recent winter) The neighborhood has other benefits too, including more community investment/involvement opportunities. From a pure materialistic stand point, building a better relationship with the locals will yield more opportunities to make/save money.
Example: networking with neighbors for cheaper rent uniquely found by word of mouth. Also its an environmentally conscious, lower crime, public transportation accessible neighborhood, which has huge personal and opportunity value to me.
Any thoughts on this? So far I seem pretty convinced that it will be an overall better decision to move within a mile from my work.
Any ideas are appreciated :) Thanks for reading this.