# Green Spot: My Second ‘Car’ aka The Bus

Posted by Tim Stobbs on November 6, 2009

Cars are money pits. So in the world of personal finance avoiding them is often worth some consideration. When you include insurance, gas, oil changes, other maintenance and depreciation you can spend around $4000/year with out trying hard. So that is why my second car is the bus.

You see we don’t need a second vehicle all that often, perhaps a couple times of month. So rather than keep a second car for those odd times I invest $18 in a sheet of 10 bus tickets and keep them in my wallet (they don’t expire ever). That way I’ve never looking for change to take the bus (also it’s cheaper than the $2.25 per fare). So at the upper limit I spend $172 per year on bus fare, which compared to $4000 is steal of a deal.

Then there is the time factor. Yes it takes me longer to get to and from work by an hour in total, but I also get some extra reading done on those days. So all in all I consider the whole thing a small price to pay to save around $3800/year. On a hourly basis per year that works to $158/hour in savings which is certainly a hell of a lot more than I make at my job.

So yes you can call taking the bus good for the environment in lowering greenhouse gas emissions, but really I’m doing it to save a small fortune in costs. So don’t always think that reducing your carbon footprint makes you spend more, often it is about fattening your wallet.

### Comments

**5 Responses to “Green Spot: My Second ‘Car’ aka The Bus”**

Wow, I wish we had a transit system like that here! When I lived in Toronto it was awesome, and we could take the bus anywhere for way cheaper than a car.

Now we live in Guelph and my husband works in KW, which is only about 20 min away. However, there’s no inter-city bus lines except the Greyhound, which costs $8 per way, per day, and took about an hour and a half longer, including the walk to the station. That’s about $3840 right there.

I wish they’d just join the city transit systems. That would make things so much easier (and cheaper!).

Great post!

Calculating the rate of equivalent pay for the extra time required to save the money is an excellent way to look at ways to reduce spending.

Carrying this reasoning one step further…consider the effect of income tax.

$3,800/24 trips per year = $158 is the take-home pay required to pay for the second car. How much must one earn at work to have the $3,800?

Assuming a marginal tax rate of 45 %…

$3800 * 1.45 = $5,510 in gross earnings

or $5,510/24 = $230 per trip.

One has to earn an additional $5,500 in gross pay at work to take home an additional $3,800.

Therefore, riding the bus to work 24 times per year, rather than paying he cost of having a second car, is equivalent to…having a part time job that pays in-the-order of $200 per hour.

Cool!

Opps…my math was a little off.

The savings are a little higher than I first calculated.

Earn G dollars in before tax gross income.

Call T the after tax take home amount.

Then, G – G (0.45) = T

Take home = gross/(1-mtr)

Gross earnings to take home $3,800

$3800/0.65 = $5,846

or 5,846/24 = $244 savings per bus trip.

Let’s look at this from a slightly different angle.

How many hours would someone have to work at a lower paying job to earn $244 gross pay?

@ $10 per hour…24 hours (3 days)

@ $15 per hour…16 hours (2 days)

For the total gross salary equivalent?

@$10 per hour…585 hours or 73 days

@$15 per hour…389 hours or 49 days

Now this is a perfect example of being thrifty and making sacrifices today for future benefits. Huge savings; nice post.

CM,

Thanks for the calculations. I forgot to consider tax on earnings.

Caitlin,

Ouch. That’s awful transit. You think someone would clue into linking transit systems if you are that close.

Tim