Wednesday, May 5, 2010

Expense: Auto and Transport

I thought our Food Expense was the one area we could slim down, but I was mistaken. I think our #4 expense is one area we could actually cut tremendously, our Auto and Transportation expense.


Fuel Economy

In the past 33 months we have spent almost $5.4k on gas and fuel. This comes out to be about $163.15 a month or about 56 gallons @ $2.90/gallon or about 1400 miles @ 25mpg per month.

We currently have 3 cars, of which one I hope to get rid of two as soon as possible. A 1990 Honda Civic wagon (George) which gets an incredible 40mpg on the highway and a 1999 Ford Ranger (Deacon1) which gets an awful 15-20mpg depending on its mood. We also have a 1999 Nissan Quest (Mini) that gets anywhere between 20-22 depending on how we drive and the weather.

Our average usage is probably 70% Mini, 20% George, 10% Deacon1 which comes out to an effective rate of about 25mpg. In any case, we could be doing better.

Insurance

Our auto insurance is about 2,664 over these next 33 months plus months until August. So that averages to about $72 over 37 months. We have also hopefully reduced this amount as we have slowly moved from one insurance to another. This number will definitely be cut down, but the damage has already been done.

Repairs

As for service, we have spent about $2.6k over three years. Looking back at our numbers that included 5 major repairs, 6 oil changes, 3 oil changes by hand, and dozens of stops at advance auto for various other things. The major repairs alone cost $2,168. So I guess we've been okay avoiding major bills (I guess). 1 involved axle, 1 involved ball bearings, 1 involved suspension/steering, 1 involved brakes, and 1 involved something I should have written down.

Parking

The final major subcategory is parking in which we spent $683 over these 33 months. It doesn't come out to much, but a lot of it could have been avoided. We were towed by the local HOA 3 times. Poor George. Those tow guys had a thing with him. We also had a few tickets when we parked in front of the bus stop and forgot to get our inspection done. Poor George. I also work in Alexandria, so whenever I wake up before 6AM and feel like a quick day, I would forgo the 1.25hr (but subsidized) metro ride and drive in to work. Parking and parking meters are also an expense I could have avoided. I've since found some spots that have 3hr parking and if I get there early enough and walk an extra mile. But that's good for my health and my wallet.

So that could have been almost $700 in unnecessary expenses.

Conclusion

Overall, we could have saved $700 for parking expenses, $1000 in auto insurance (had we switched earlier), and about $1120 if we cut back 300 miles a month. This savings is about $85 a month. And using our nifty Future Value Calculator, $85/month at 10% return for 30 years will give us a whopping $167k. This would be more if we actually got rid of our cars... which would inevitably force us to drive less and change our lifestyle.

What can a budget do for you?

Update

This is how we are actually doing this year.


We're a little bit high on Fuel Economy, Parking is a minimum, Insurance and Repairs are just below target, so overall we just need to drive a little bit less and get better fuel economy.

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