Keeping Transportation Costs Within your Budget
By Jen Myers, CVOEO’s GreenSavingSmart Financial and Energy Coach
What does it cost you a month to own, insure, maintain, and gas up a personal vehicle? Of course, the answer will vary, but often it is more than can comfortably be budgeted into one’s personal budget. Bankrate.com calculates that the average full coverage car insurance is around $1200 in Vermont. That is around $200.00 per month. If you have a car loan, then that will be another monthly transportation cost. Creditkarma.com estimates the average car loan payment for a new car is $575. Add to these costs, repair, maintenance, and fuel costs, and the percentage of one’s budget dedicated to owning a car can be quite high.
It is a well know principle of financial planning that when money is spent for one budget category, there is less money available for another category. This is known as opportunity cost: what you spend one place is not available to be spent in another. So, what can be done to lower the cost of transportation in one’s budget?
If you live in a city, you might be able to participate in a car share program or use public transportation. Choosing to use shared transportation might reduce your transportation costs significantly without hampering your freedom too much. In Montpelier, MyRide by GMT features “technology-enabled vehicles that provide curb-to-curb service, taking you when and where you need to go.” MyRide is accessed by an app on one’s smart phone. CarShareVT in Burlington allows its members to sign up for a daily or longer use of a vehicle. The maintenance and insurance are taken care of by CarShareVT. Members pay a small yearly fee which can be waived with certain income eligibility and a daily rate along with a mileage fee.
Alternatives to cars themselves are another possibility. Electric bikes, regular bikes, and good old pedestrian travel are a way to get around and stay in shape at the same time. There are incentives offered state-wide for the purchase of electric bikes, and a used bike from a bike repair store like Old Spokes Home will definitely be easier on the budget than a new car.
If you are a rural dweller in Vermont, you might need a car, but you can shop for a good deal on a used car, and if it is a hybrid, hybrid plug-in or electric vehicle you can get incentives toward your purchase through MileageSmart. With fuel prices fluctuating as much as they have been recently, an electric vehicle might help with budgeting a set amount to fuel your vehicle each month.
There is no doubt that America is a place that loves its cars, but some smart alternatives to personal car ownership of the biggest and brightest auto might make sense for your budget and for a cleaner environment.
For information about budgeting and switching to green transportation, connect with a GreenSavingSmart coach in your area.