Is my 90 mile drive to work worth the money?

[Pedro Mustache]

Before everyone starts to scream the party line, there is a catch. A $3500 in my pocket every month extra catch.

I live close to the border between two countries. Due to a legal tax setup, and I stress that again, 100% legal - nothing underhanded going on, it is possible to move across the border to country B and set up my family home there while keeping my job in country A and paying a flat rate of tax of around 20% on only a small portion of my gross pay instead of 50% plus tax on most of my gross earnings I am paying now.

The long story short is that I will net me about $3500 net extra a month. The problem is that I will be driving 90 miles each way to get to work. I am a shift worker and I work about 15-18 days a month on average. I would stay overnight occasionally so I would be doing the roundtrip about 10 times a month on average.

On the back of a Napkin I think it will cost me about $500, max $700 all in and that's being as conservative as I can with gas, mileage, repairs etc.

On the face of it it makes financial sense. I also quite prefer country B as a place to live.

What do people think?

[StetsTerhune]

Yeah I guess the math of it makes sense. ~$3000 for ~30 hours of driving per month, so you're getting $100 per hour. I'd just think of it as a side job where you get $100 an hour to drive 7 hours per week. If that would be worth it to you then go for it. Just make really sure there are no legal catches before you up and move to Country B.

Edit for additional thought: If this is Europe (I guess this applies to everywhere, but the Schengen zone is looking particularly vulnerable these days), do consider the risk that the border situation will change. You're making a difficult-to-change decision, and if something out of your hands changes with the border and makes that commute include a long border wait every time, it'll change things considerably.

[johnny847]

The US's IRS estimates the cost of driving at 57.5 cents a mile. But that's with US fuel costs, insurance rates, and depreciation curves. I know gas in Europe can cost 2x as much as the US.

Assuming 50 work weeks in a year (standard in the US), that's 180 mi/day * 5 day/wk * 50 wk = 45000 miles driven.
Which comes out to $25,875/year.

As a result of all this driving, you're earning an extra $3500/mo = $42,000/year.

So financially, assuming the IRS figure is accurate, you're earning an extra $16125 for an extra 750 hours of driving time (assumes you're driving at 60mph the entire time, which is probably faster than your true average speed), or an extra "hourly pay" of $21.50/hr.

That sounds terrible to me for driving that much every work day.


Now of course, the IRS estimated cost of driving was $25,875/yr, and your estimated cost was $8400/yr. I know for a fact that the majority of this IRS cost estimate is depreciation. Which is highly nonlinear - a high mileage car will experience very little depreciation compared to a low mileage one. Plus, not knowing where you live, the cost of gas may be very different.
How did you arrive at the $700/month in associated extra expenses from driving and possibly staying overnight? It seems like something worth examining.

[With This Herring]

If one of those two countries is the US, please double-check your tax assumptions with a US CPA who has other foreign tax clients.  The US deals with foreign income in interesting ways.  For unearned income (dividends, interest - the only kinds I've dealt with personally), the net effect of US taxes is you end up paying the higher of the two countries' rates (as the US allows a credit for taxes paid to the foreign country up to the US tax rate).  I have not had personal experience dealing with earned income.

[Pedro Mustache]

Thanks for taking the time to reply. This is the kind of detail I am looking to discuss.

Well I drive a 10 year old fully depreciated car that is still very fuel effecient. I am assuming that the IRS figures assume a gas guzzling SUV clown car that's still worth $50K?

I also don't have a Mon-Fri 9-5 type job. I work shift work and have long blocks of days off in between. As I said earlier an average month would be around 13-15 days.

I was estimating for fuel (diesel) at €1.10 a litre, the car should do about 6.5L per 100Kms. The drive is around 120Kms. I am budgeting about €150 a month for maintenance. I have a room in a shared apartment that will run about €250 a month all in

It's highway all the way with a 70mph limit.

This doesn't involve the US in terms of tax.

Another side bonus is thatmy wife can work in country B whereas she can't work where I live now for a whole host of reasons. We have infant children at present but she'd like to get back to work at some point. That would be worth about another €1200 a month.

[Jags4186]

If it's a no traffic route, 90 miles each way, while long, isn't awful if you make productive use of the time (books or new language on tape). 

The other option is seeing what it would cost AirBnB or get a weekly hotel rental.  Be careful about renting a small apartment--that might cause you to become a resident again.

[Pedro Mustache]

It is a no traffic route. I'll be driving well outside of peak hours in any case.

I would be subletting a room in a "crash pad", or staying in a motel where I've negotiated a rate that't work out similar.

I'm thinking of giving it a trial run over the summer months and see how it fits.

Another important benefit is that the country where I am now is very investor un-friendly and low cost index funds are taxed to shit whereas country B has normal civilised rates of investment taxes.

I will be listening to a few audiobooks thats for sure. Language tapes for the new country of residence!

[pbkmaine]

The issue for me would not be money but quality of life. I commuted into NYC from NJ for years on public transit. The round trip was 3 hours. Although I could read or work on the trip, I found it exhausting. When I got home at night, all I wanted to do was sit in front of the TV.


Sent from my iPad using Tapatalk

[Pedro Mustache]

Thanks PB, I haven't excluded that cost and it's as real as money from any calculations.

[pbkmaine]

Yes, and the "cost" varies. I have friends who drive long distances, and listen to podcasts and audiobooks and even learn languages on their commutes. If you enjoy driving, the cost is lower.


Sent from my iPad using Tapatalk

[johnny847]

Thanks for taking the time to reply. This is the kind of detail I am looking to discuss.

Well I drive a 10 year old fully depreciated car that is still very fuel effecient. I am assuming that the IRS figures assume a gas guzzling SUV clown car that's still worth $50K?

I also don't have a Mon-Fri 9-5 type job. I work shift work and have long blocks of days off in between. As I said earlier an average month would be around 13-15 days.

I was estimating for fuel (diesel) at €1.10 a litre, the car should do about 6.5L per 100Kms. The drive is around 120Kms. I am budgeting about €150 a month for maintenance. I have a room in a shared apartment that will run about €250 a month all in

It's highway all the way with a 70mph limit.

This doesn't involve the US in terms of tax.

Another side bonus is thatmy wife can work in country B whereas she can't work where I live now for a whole host of reasons. We have infant children at present but she'd like to get back to work at some point. That would be worth about another €1200 a month.

Oops. I totally missed the part where you don't work the typical 5 days/wk, 50 wk/yr.

Yeah depreciation on your 10 yr old car is not that high, and the fuel efficiency helps too. The IRS numbers figure the average car in the US - but I'm pretty sure a majority of Americans own gas guzzlers.

Honestly when you factor in your wife's inability to work in country A, I think as much as that kind of drive isn't enjoyable, it's worth moving.

Though that reminds me - what about the transactional costs of moving? Over time, the effect of the transactional costs becomes negligible compared to your driving costs, but if the moving costs are high and you lose your job, that would suck.
Have you considered the risk of losing your job?

[patrickza]

I'd probably do it, but find a way to drive less often. You already said you overnight in the country, so I think you've gone a long way in that direction already.

[Playing with Fire UK]

I'm in agreement that this is worthwhile. Some points to consider:

Is it possible to arrange your shifts in clusters so that you can stay over more and drive less?
Set up your car so that you can sleep in it if you get stranded half way by a traffic accident or weather (blanket, snack, water, toothbrush)
Have a plan so that you don't drive tired, and you can do something if you are getting tired (list of motels en route, can of energy drink).
Don't get back pain from your car (set up the seat, do more exercise etc)

[Dee18]

What gives me pause is the infant children.  A trial run sounds like a good idea.

[2lazy2retire]

FFS - its all legal so which countries already?

[Another Reader]

We have firefighters in Silicon Valley that commute from hundreds of miles away.  They live at the firehouse for several days and then drive home.  Or fly home, in at least one case.    It can work if you don't mind driving.  It's better if you can avoid the commute traffic, which is not always possible.

[johnny847]

FFS - its all legal so which countries already?

FFS chill out. If the OP doesn't want to reveal information about him/herself to strangers on the Internet (even pseudonymously) that's perfectly reasonable.

[Dobby]

I had a 3 hour round trip commute and had a hard time justifying any (reasonable) amount of money to be worth all the time away from my family.  The money simply can't replace the shared experiences that are lost when you aren't around.

[AZDude]

Not entirely similar, but I had a job where I worked from home three days a week, and commuted for 90 minutes one way the other two days. I hated it, but that was entirely different driving style. Stop and go, rush hour traffic.

Make sure you dont make the drive tired, since you have infants at home. Little kids tire out all parents, so be careful.

[Bajadoc]

Your time is worth more than the money. Not worth it unless it is your only option to survive.