How To Really Save Money Commuting

I’m stuck on a 4+ hour cross-country flight and highly caffeinated. Proceed at your own risk! Haha. Thinking about commuting this way was a game-changer for me and has helped me personally save over $50,000.

Check it out and do the calculations to save some big money yourself. It’s super simple.

I live in Chicago, which is one of the top 5 worst cities to commute to work in the United States according to Trulia’s study on best and worst commuting cities.

A lot of people I know spend over an hour each day commuting to work – the ones who drive spend money not only on gas and car maintenance, but also parking. Many people pay tolls and even train commuting costs are increasing – both in time and price.

I was chatting recently with my friend Sam (his name has been changed to protect the innocent haha!) who rents a parking space downtown for approximately $150 a month, but the company that owns it wants to increase the monthly rate to $250.

That extra $100 a month will really add up, so he asked me what I thought and how he could save some money on commuting. Let’s look at a few different scenarios to calculate his best option.

Everything comes to down to time and money. We’ll not everything, but this question definitely does.

How to determine your true commuting costs (and save money)

First, we need to determine what his hourly rate is (including commuting time)

Do you know how much money you make per hour? It’s probably less than you think. Most people calculate their hourly wage by taking their annual salary and divide it by 50 weeks, and then 40 hours a week.

But what they miss is their commuting time. To really calculate your hourly rate you need to factor in how much time it takes from the moment you leave your house to the office and then back at the end of the day. This is the time you are spending specifically for your job so you need to add that time into your calculation. A lot of people are surprised by how this changes their effective hourly rate.

So if Same makes a $90,000 a year salary, let take a look at his hourly wage with and without commuting. You can use this same simple calculation replacing $90,000 with your salary.

Hourly rate without commuting

$90,000 / 50 weeks = $1,800 a week / 40 hours = $45 hour x 0.70 (because he pays approximately 30% in taxes) = $31.50 per hour

Getting super nerdy here, let’s now quickly determine Sam’s per minute rate – since this will make our savings calculation easier and who doesn’t want to know how much money they make per minute? $31.50/60 = approximately $0.53 per minute

When I first did this calculation when I was making $50,000 it blew my mind. I was making $0.29 for a minute of my life. I knew I was worth more than that. You are too – here’s how to hack your boss and get a raise or build a profitable side hustle so you can increase your per minute compensation!

Hourly rate with commuting (approx 90 minutes commuting time every day)

$90,000/50 weeks = $1,800 a week / (4o hours + 7.5 hours commuting = 47.5 hours) = $37.90 x 0.70 (keep after taxes) = $26.53 per hour / 60 minutes = approximately $0.42 per minute

Alright to summarize Sam earns: $0.42 per minute (with commuting) at his 40-hour per week job. Commuting effectively reduces his per minute compensation by about 20%. That’s an expensive commute!

How to save money commuting

1. Driving (with parking space)

Sam has been driving to work for the past year and he rents his parking space for $150 a month. It is also, by far, the quickest way for him to get to work. The challenge in really calculating the true cost of his car commute is factoring in gas, car depreciation, and the parking spot into the price – but for the purpose of simplicity, we are going to not include car depreciation since sometimes he uses his car and other times his motorcycle. But we will use gas.

Time to the office and home (round trip commute): 40 minutes a day, or 200 minutes per week, or 800 minutes per month

The cost to commute in a car per month:

Time: 800 minutes per month * $0.42 per minute (Sam’s salary) = $336

Gas: Approximately $80 per month

Parking: $150 per month

TOTAL COST = $566 per month to commute to work! That adds up to $6,792 per year to get to work.

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $6,792 per year/$63,000 salary = 11%

2. Uber-Pool

The second option Sam is considering is Uber pooling to work and initially believes he will save money carpooling this way but let’s look at the numbers.

Time to the office and home (round trip commute): 90 minutes a day, or 450 minutes per week, or 1800 minutes per month (that definitely adds up!)

The cost to commute using Uber-pool per month:

Time: 1800 minutes per month * $0.42 per minute (Sam’s salary) = $756

Total Uber fee: Approximately $10 per day = $200 per month

Gas: $0

Parking: $0

TOTAL COST = $956 per month! That adds up to $11,472 per year. 

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $11,792 per year/$63,000 salary = 19% 

3. Bus & Train

Let’s check out the cost for Sam to commute by bus and train. Where he lives he can’t take either or, he has to take both a bus and a train, which really adds to the amount of commuting time – effectively pumping up the cost to commute. It takes about 90 minutes per day, so the same as Uber-pool, but ends up costing less than Uber.

Time: 1800 minutes per month * $0.42 per minute (Sam’s salary) = $756

Total transit fee: $5 per day = $100 per month

Gas: $0

Parking: $0

TOTAL COST = $856 per month! That adds up to $10,272 per year. 

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $10,272 per year/$63,000 salary = 16% 

4. Walking

I walk to my office and using these calculations I’ve determined it’s saved me over $50,000 in the past 5 years, so if you can move closer to work then you should definitely consider it and invest the savings (like I did). Sam, unfortunately, lives too far to walk to work… womp womp. But IF he did walk to work it would take him about 3 hours round trip each day or 3600 minutes per month. IMPORTANT: walking also burns calories and makes you healthier, so there’s gotta be some calculation to determine how the workout offsets the cost (for another day!).

The cost to commute walking per month:

Time: 3600 minutes per month * $0.42 per minute (Sam’s salary) = $1,512

Gas: $0

Parking: $0

TOTAL COST = $1,512 per month! That adds up to $18,144 per year. 

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $18,144 per year/$63,000 salary = 28% – the benefits of the exercise = ?, likely a significant overall net gain! 

5. Biking

More people are biking to work every day and cities are no being designed to make it easy to get around on two wheels. Sam lives in Chicago, so realistically he can only bike to work at most about 70% of the year (aggressive given snow and cold). So biking isn’t the best option, but if he could bike all year it would be by far the cheapest option for him. It would take Sam about 60 minutes a day to bike to work, so let’s look at the hypothetical scenario where Sam could bike 12 months of the year.

The cost to commute biking per month:

Time: 1200 minutes per month * $0.42 per minute (Sam’s salary) = $504

Gas: $0

Parking: $0

TOTAL COST = $504 per month. That adds up to $6,048 per year. 

% of after tax salary spent on commuting: ($90,000 x 0.70 = $63,000 per year after tax salary, $6,048 per year/$63,000 salary = 10% – the benefits of the exercise = ?, likely a significant overall net gain! 


If you made it this far then we probably have a lot in common! Let’s take a look at the results, so see what makes the most sense for Sam and how much more he can pay for his parking space.

1. Biking: $504 per month

2. Driving: $566 per month

3. Bus % Train: $856 per month

4. Uber pool: $956 per month

5. Walking: $1,512 per month

So…. Sam can actually pay up to $299 more per month for his parking spot (or $449 per month) and will be saving at least $1 overtaking the bus or train.

Uberpool ends up being more expensive than he thought.  It’s definitely going to be cheaper for Sam to drive. Minus the environmental impact of course, which is reduced using Uber pool, the bus, and of course walking. I did not factor in carbon offsets of the commuting methods, which would add more value to this calculation. Bike or walk when you can!

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  • Comment Author image blank
    […] to find out exactly where you’re losing time and money during your drive into the office, this spreadsheet can help you calculate the cost of your commute down to the minute. Whether or not you want to dive […]
  • Comment Author image blank
    I'm surprised you didn't mention taking advantage of employee offered Commuter Benefits programs, which allow you to dedicate up to $255/month from your pre=tax earnings for commuting. This program, which is widely offered by large employers, can save you 35-40% on the tax savings alone. It also is very convenient as you can use the funds for specific services such as MTA in New York or you can just get a debit card that can be used for any travel, especially ride sharing apps like UberPool, Lyft Line, Via, etc.
    • Grant Sabatier
      Great ideas David. Since I walk I totally missed commuter benefit programs. Thanks for sharing.
  • Comment Author image blank
    This is a great list. We love the disclaimer at the top. Hopefully, you had a great flight! Love your content keep it up!
    • Comment Author image blank
      Thanks Savvy Couple. Writing on planes is one of my favorite things to do. No distractions!
  • Comment Author image blank
    I thought one of the options would've been to move. Without knowing more of Sam's background it's not possible to say if this is viable but if he could move closer to his work and ditch the car as long as living expenses stay under the TCO of the car he could come out ahead as well. This option may have higher up front costs but could come out ahead in the long run. I've lived in cities for the last 6 years, currently in Chicago, and not owning a car must've saved me 10's of thousands of dollars. I used to do the $100 monthly CTA pass but recently scaled it back to a small dollar amount on my ventra card each month, mostly for rainy days and getting around on the weekends, as the weather is finally walkable. I plan to buy a bike and my employer has a program to pay for transit expense pre-tax as well. I plan on not owning a car for as long as I can hold out.
    • Comment Author image blank
      Good question DC. Moving closer to the city would cost Sam at least an extra $500 per month in rent, so it would likely save him money - but rents are going up fast, so the ROI of that decision could turn negative quickly. I walk to my office and love it.
  • Comment Author image blank
    Great post Grant, thanks for the numbers, I am lucky enough to live only appr. 2 miles from my workplace so I have multiple options. I have a bike which I use most of the year, 2x15min trip, bike costs (bought used for $100, $10-20 annual maintenance). When its colder or just wrong weather and I don't want to use the bike I can take the bus, 2x20-30min trip, $22/month. I can walk too, roughly 2x40min, but that is refreshing sometimes. Also sometimes we carpool when my wife or someone from the neighborhood go on errands to the downtown. I only took the car when the temps was around -20C this winter. With the combination of these options I manage to don't spend a lot on this necessity.
    • Comment Author image blank
      Thanks Peter. I love to see you calculating the cost of your annual bike maintenance! Biking is the way to go. I walk to my office. It's one of the best general "quality of life" and money decisions I've made.
  • Comment Author image blank
    Bottom line: commuting sucks! I shutter to apply your level of analysis to my own commute. It's currently between an hour to hour and a half round trip each day. My solution to this is trying to get a remote job which I am currently working on doing.
    • Comment Author image blank
      That's quite a commute. Do you blog during that time? Could be a great use of time. It's not all lost time of course if you are learning or creating, but it's the fact that the time is required to get to work. Best of luck in the job hunt Cody.
  • Comment Author image blank
    At my job we're allowed to work from home twice a month. It's not a significant change, but I definitely love saving money on my commute on those days. Working from home is a pretty sweet gig!
    • Comment Author image blank
      Working from home is an awesome gig! I find I'm most productive at home, but it also can get old quickly. I crave the social aspects of an office and working closely with my team. Thanks Mrs. Picky Pincher.
  • Comment Author image blank
    I live in Minneapols, MN, and I take the bus. I'm a big fan of it; it's a 12 minute trip and it costs me $46 a month. If I was to drive, it would cost $100-200 a month minimum. Thanks for sharing. I'm a nerd as well and enjoyed your calculations!
    • Comment Author image blank
      Thanks Erik.
  • Comment Author image blank
    As a numbers guy, I definitely appreciate the quantitative approach to solving this problem. However, there is an important qualitative side to it as well. Which option lets him best utilise the time he spends commuting? Personally, I commute to work by transit (train and subway), which gives me a travel time of about 40 minutes from door to door. I could probably reduce that to 30 minutes if I took the car instead, but there's not a chance I would choose car over train. Oftentimes I "power nap" either way, and if I'm not sleeping, I will spend my time catching up the latest in the personal finance community, commenting, tweeting and whatnot. And then there's the fact that I absolutely loathe driving in congested traffic. Nothing fires up my anger quite the same way as being stuck in traffic, so it's far better for my blood pressure to relax in a seat on the train ?
    • Comment Author image blank
      These are GREAT POINTS! This is why personal finance is ultimately personal and is both qual and quant!