The impact of commuting on your financial plan

As we get older, time becomes are more valuable commodity.  I clearly remember that as a college student, I was more than willing to wait in line for over an hour simply to get a free sandwich promotion.  Nowadays, I’m not even too interested in waiting 20 minutes to be seated at a restaurant.  Our priorities evolve.

One interesting aspect of time that remains relatively unchanged over time is our tolerance of commutes.  We commute to and from work almost daily, and whether or not we like it, we do it.  We have gone through great lengths to even justify the commutes:

  • “There’s no way I’d want to live near the hospital I work.”
  • “Junior needs to be in a good school district.”
  • “There aren’t any good home options near the office.”
  • “Housing near the clinic is too expensive.”

Most of my colleagues commute at least one hour each day for work purposes.  Those who have to commute between offices easily add on another 30 to 45 minutes to the schedule.  One of the recent reports on average commutes shows that one hour expected for everyone living in the Northeast corridor or California, regardless of profession.  That’s about five hours of commuting every week, or 240 hours on a 48 working week calendar. Ten days in the car! If you took public transit, you’d easily double that.  If you took call on the weekends, you’d clock in another day in the car each year!

Commuters are essentially funding the audiobook and podcast industry by virtue of finding ways to occupy their time between the points A and B.

Commuting and your health

I used to sleep on the subway during my commute.  I didn’t really have much of a choice.  It was a vicious cycle where I lived far away from work, slept less because the commute was long, and ended up getting poor sleep on the train.  By the time I got home, I was exhausted from work and the commute.  After preparing slides for grand rounds and working on some research papers, any motivation to eat healthily or to hit the gym was essentially put on hold.  We all know the ill effects of a sedentary lifestyle.  There are zero health benefits of a long commute.

Commuting and your wallet

It is an interesting exercise to calculate your average hourly wage from the moment that you start the day in preparing to get to work until you get home after work.  If you get up at 5:50 a.m. to get ready for work and step back home at 7 p.m., your workday is essentially 13 hours. If you are only getting paid for 8 hours, you’re essentially “working” 62.5 percent more than what is reflected on your paycheck.  If you end up bringing charts home to finish after you put your kids to bed, you’re adding to the work hours too.  For each hour of “unproductive” commute, you are discounting your services by 12.5 percent on an eight-hour workday.

How these numbers actually reflect your finances ultimately depends on how much you value your time.  The premise goes back to the promotional sandwich experience in college.  When you have no net worth, are living life on a loan, and have no active earning power, your time isn’t worth much.  One would expect that our value on time will increase in an “S” shaped curve over time.  If you are early in your career, you might have to bite the bullet and take these onerous commutes until you reach a position to negotiate a more favorable situation.  Once you have reached fatFIRE, are earning a solid six-figure doctor income, and need to take your kids to their baseball game by 5 o’clock, it’s time to find a way to reduce that commute.

Move the goalpost as your priorities evolve

I’m a big fan of moving the goalpost.  I still have commute times on par with the rest of the country, but part of my financial plan includes cutting down on the commute times.  It’s all about how much we’re willing to put up with.  If you are progressing towards financial freedom, you ought to have less willingness to tolerate long commutes.  It’s simply not worth your time to sit in the car.  By shortening your commute, you are essentially increasing your hourly wage while working less.

We all should have reducing commute times on our financial plans.

“Smart Money, MD” is an ophthalmologist who blogs at the self-titled site, Smart Money MD.

Image credit: Shutterstock.com

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