The following post comes to us from Mia. Mia is the founder of Money-Minded Millennial, a personal finance blog that teaches readers how to save and earn more money while consciously designing their ideal life. Visit https://moneymindedmillennial.com/ to get inspired and join the growing tribe of people seeking Financial Independence.
I’ve never really gotten much joy from driving. I don’t like having to sit still for long periods of time, and I also don’t like the feeling of being dependent on a vehicle to get me places.
Aside from that, I’m also a terrible driver. Every car I’ve ever driven has at least one ding or scratch on it.
When it came time for me to go to college, I chose a school in Boston because the public transportation system would make it so that I’d never have to own a car.
That worked out fine, until my husband and I moved to Miami, a largely car-dominated city. It took me a couple months to find a job here, and by the time I accepted an offer we had already signed a short-term lease at an apartment that was 30 minutes away from the office. Since my husband and I shared his car between the two of us, we took turns Ubering to work or coordinating to align our commutes, which got very stressful very fast.
We could’ve bought an extra car for my use, but given the reasons I listed at the beginning of this article, we decided to stick with sharing his car. When our lease came to an end, we made it a priority to find an apartment that was within walking distance of my job.
This small change was one of the best decisions I’ve ever made and convinced me that it’s possible to be a one-car household. Whether your car lease is almost up and you’re thinking of not renewing, or you have an extra car that sits in the garage, these next benefits may give you the push you need to switch to the car-less life.
Cost
Saving money is probably the most obvious benefit of not owning a car. But just how much money does it save you every month to reject car ownership? Here’s an approximate breakdown:
Car payment: $472
Your biggest car expense is most likely the cost of the car itself. According to the 2019 State of the Automotive Finance Market by Experian, the average monthly payment is $554 for a new vehicle and $391 for a used one. Taking the average car payment amount for new and used vehicles, the average monthly car payment is about $472.
Gas: $200
According to the U.S. Census Bureau, the average travel time to work is 26 minutes. Taking into account traffic and a mix of highways and slower roads, we can assume an average commuting speed of 40 miles per hour. Traveling for 26 minutes at 40 mph leads us to an average round-trip commute of about 35 miles.
The cost of gas depends on the fuel efficiency of your car. On average though, the cost of gas is 15 cents per mile.
Driving 35 miles per day and spending 15 cents per mile means the average cost of gas just on commuting is $5.25 per day, or $157.50 per month.
Of course, cars aren’t used just for commuting. In a given week, you may use your car to drive to the store, attend events, and maybe take longer-distance road trips. Taking all of this driving into account, you’re probably spending close to $200 per month in gas.
Insurance: $44
According to insure.com, the average annual cost of car insurance in the U.S. is $526, or approximately $44 per month.
Maintenance: $99
The cost of maintaining your car would depend a lot on whether the car was new or used, the mileage, etc. However, according to AAA, the average cost of repairs, maintenance and tires for a new car is $99 per month.
Total monthly cost of car ownership: $815
The cost of owning a car depends on a variety of factors, including where you live, your commute, and the type of car you drive. However, variables aside, the average cost of car ownership is about $815 per month.
Even if your car is paid off, which according to Experian Automotive takes about 4-5 years, you can still count on spending $343 per month just on recurring expenses.
Of course, it wouldn’t hurt to have an extra $815 in the bank each month. Aside from the savings, there’s the opportunity cost of not being able to invest that extra cash. If you invest those savings into a low-cost index fund such as Vanguard, your money would compound and make the car that much more of a financial burden.
Health
Do you have trouble getting motivated to work out? Having a workout built into your daily routine means you can’t avoid it.
My first year in Miami I walked to work. My second year I switched jobs and biked. Then my office moved, and I was lucky enough to have access to public transportation. All three commute situations necessitated that I exercised in some way to get to work. I found that I arrived at the office and returned home feeling more energized than if I had been sitting in a car instead.
Not only does walking/biking to work benefit my physical health, but my mental health as well. Having two 15-minute trips of fresh air per day and listening to music or podcasts lets me slow down and take a breather from all of the stress of work and home life.
On the flip side, being sedentary is one of the worst things for your health. Especially if your commute is 30 minutes or more, everything from your weight, heart health, and posture suffer from extended periods of sitting in a car. Plus, road rage doesn’t help your stress levels.
If you make the switch to a car-less life, you will be investing in your long-term physical and mental health.
Environment
Coronavirus gave us insight into how the environment can benefit from a slowed economy. Scientists report an unprecedented 17% decrease in carbon emissions, partly due to the reduction of cars on the road.
Eliminating just one car from the road contributes to the cumulative effect on the health of our planet and its inhabitants.
Alternative Transportation
You may be reading this thinking: ok, all these reasons make a great case for not owning a car. But what are my alternatives?
Luckily, there are lots of ways to get from point A to point B without needing to own a car. The options are:
Public transportation
Biking
Walking
Electric bike
Electric scooter
Roller-blading
Hover boar
Lyft
Uber
Car rental (for longer trips)
While everyone’s situation is different, there are ways to reduce the number of cars in your household or reject car ownership completely. Maybe you’re changing houses and can consider moving somewhere that’s more public transportation accessible. Or maybe you’re in between jobs and can choose a job that’s closer to where you live. Another option is to carpool with a coworker, so you can both save money and the headache of driving every day, as well as reduce your carbon footprint.
Your car might seem like something that’s impossible to live without, but if you consider small changes you can make to either reduce the number of cars you have or the amount of time you use your car, your wallet and health will thank you.
Online lenders have had a massive breakthrough in the last couple of years. Millions of people around the world started using their services due to the advantages that they have over the banks. Up until recently, banks were considered the most legitimate lender, but the problem was that the number of approved loans has been significantly down in the last decade.
Ever since the 2008 financial crisis stunned the world, banks have been far stricter with handing out loans. They do more detailed background checks, approval times take a bit too long, and as we mentioned above, the rates are lower than what they used to be. But, online lenders managed to overcome all of these disadvantages.
They have fast approval times and the approval rates are very high, around 75%. The process of applying takes just a minute; all you do is fill out an online form and give basic information. We wanted to take a closer look at these loans and provide you with a list of the 3 most common online loans.
Wedding Loans
All of us know that weddings cost a lot, which is why many people decide to apply for loans to organize them. They cannot rely on the banks since the chances of them being denied are high, so naturally, they contact online lenders. The best part about online wedding loans is that they are available to people with a bad credit score.
During this period, couples usually have a lot of expenses to pay and that is why their credit score keeps declining, which is not strange. Wedding loans for bad credit can help you with regular payments and have similar or lower interest rates than credit card loans.
After all, weddings are one of the best events of our lifetime, and we must do everything in our power to make it memorable for us and the guests.
Small Personal Loans
Whenever thinking of renovating your home or you need fast money to invest in your business, small personal loans from online lenders are a perfect choice. Considering the fact that the amounts are low, interest rates might be higher than usual, but the best part is that small personal loans are transferred to your account very fast.
We mentioned earlier that online lenders are extremely efficient when it comes to applying and getting accepted for a loan, which is why small personal loans take a week to be transferred to your account.
Car Loans
Finally, car loans are the last mention on our list of most popular online loans. There are a few things that you need to consider when thinking of applying for a car loan. You need to decide whether you want a brand new or a used car. There are some pros and cons in both cases. Used cars are much cheaper than new cars, but they are more prone to break down.
On the flip side, new cars are far more expensive, but the chances of them breaking down are low. Even if a malfunction occurs, new cars usually have warranties that will cover your costs. But, finding a decent used car that will serve you well is also likely to happen. The price of the car determines the loan and the interest rates depend on the monthly payments.
Online lenders have become very popular because they are far more flexible and more caring than banks. Some people believe that in the next few years online lenders will likely be the number 1 option for personal loans and will overcome the cons that the banks have.
