The True Cost of Traveling

I’ve been think­ing late­ly on the cost of time, more specif­i­cal­ly the cost of my time.

What do I mean by that? Cost of Time? Huh?

I was first intro­duced to the con­cept of time cost­ing some­thing with Mr. Mon­ey Mustache’s clas­sic arti­cle, The True Cost of Com­mut­ing. If you haven’t read it yet, stop read­ing this arti­cle and go read that one. Trust me, it’s worth it. This will still be here when you’re done.

Fin­ished read­ing already? Awe­some. Let’s dis­cuss.

He brings up three excel­lent points about com­mut­ing:

-the flat rate of dri­ving the car (both as set by the IRS for mileage, the cost of the gas, and depre­ci­a­tion)
-the amount of time wast­ed
-the cost of the time spent dri­ving the car.

The cost of dri­ving a car is pret­ty easy to cal­cu­late. The reim­burse­ment rate set by the IRS for 2016 is $.54 for every busi­ness mile dri­ven. Dri­ve 200 miles and that’s a cost of $108. Since I bought my car Levi for $8000, and have put rough­ly 70,000 miles on the odome­ter since I bought him, I’ll use the rate of $.11/mile in depre­ci­a­tion for my cal­cu­la­tions. While my MPG has fall­en from a high of 32, he still gets a decent 28 miles to the gal­lon. The aver­age cost of gas around me is $2.10 right now, which means I pay $.075/mile in gas costs.  Alto­geth­er, every mile of my car I dri­ve costs me $.725 (although that goes down the more I dri­ve thanks to the depre­ci­a­tion of more miles).

Peo­ple fail to real­ize the time wast­ed in the car every day. I used the infor­ma­tion in MMM’s arti­cle to my advan­tage in my last move. I picked an apart­ment that is only 1.5 miles from work, so it costs me only $.23/day in gas for my com­mute, and even less when I ride my bike. But the real advan­tage of a short com­mute to me is less time wast­ed in traf­fic. My dai­ly com­mute is 10 min­utes. Not one way, total. With con­struc­tion in full swing, traf­fic is a mess in my area. If I lived fur­ther away, I would waste even more of my time nav­i­gat­ing between orange cones and wait­ing in line to turn at a hor­ren­dous­ly over used inter­sec­tion.

Liv­ing close by saves me mon­ey in addi­tion to time. Not just on gas, but in terms of more time to do things. In my case, I rarely use this added time for any­thing more pro­duc­tive than a longer nap after work, but I’m try­ing to change that par­tic­u­lar habit. My Mega­Corp employ­er val­ues my time at almost $45/hr when all is said and done, but I’m far less pro­duc­tive when I’m sleep­ing, so I’ll use $25/hr for my rate of pay for myself. My cur­rent com­mute costs me about $4. If I lived down­town (35 min­utes away), my com­mute would cost me $15/day. That’s the equiv­a­lent of eat­ing din­ner out every day! Yikes!

At the risk of sound­ing like an ACT prep ques­tion, I also decid­ed to apply these prin­ci­ples to oth­er areas of my life. More specif­i­cal­ly, while trav­el­ing.

Pre­vi­ous­ly, I cel­e­brat­ed find­ing a cheap­er, direct flight to my des­ti­na­tion at an air­port in a near­by major met­ro­pol­i­tan city. I saved so much mon­ey! But.…… did I real­ly?

Let’s com­pare and con­trast an upcom­ing flight. I’m going to Fin­Con this year in San Diego (and I’m super pumped!). Some­how, I need to get there. I am def­i­nite­ly not dri­ving, so I’m going to fly. I have two options: I can dri­ve 3 hours and catch a cheap direct flight, or I can fly out of my home air­port on a more expen­sive flight with a lay­over (albeit one in Las Vegas).

Flight A, the Home­town HeroFlight B, Sav­ings Sal­ly
Air­line Tick­et:$327Air­line tick­et:$176
Total trav­el time:9 hrs, 20 min­utesTotal trav­el time:10 hrs, 20 min­utes
Car cost:$29 (40 mi x $.725)Car cost:$290 (400 mi x $.725)
Car time cost:$25 (1 hr dri­ve time)Car time cost:$150
Park­ing:$30 ($6/day x 5 days)Park­ing:$37.50 ($7.50/day x 5 days)
Total:$411Total:$653.50

Look at that! What looks like the obvi­ous win­ner from just the price of the air­line tick­et, Flight B, is actu­al­ly the more expen­sive option! If we’re just com­par­ing the cost of the miles spent trav­el­ing, Flight B costs about half what Flight A does (28 cents v. 58 cents per minute). But, throw in all those oth­er expens­es (6 hours of dri­ve time, more expen­sive park­ing and more wear and tear on my car) and Flight A jumps up to almost exact­ly equal Flight B (73.3 cents v. 72.6 cents per minute).  With Flight A, I could replace my car costs with a flat Über fee of $20 each way, which would save me an addi­tion­al $40 in costs. Then, flight A would be only $.66 per minute, mak­ing it the more eco­nom­i­cal option, even though the flight is more expen­sive.

I should also men­tion the times of Flight A are much more rea­son­able. Leave my home air­port around 1045a (which means leave my house by 830a) and arrive back home 515p that Sun­day (which means I’m back at home by 6 at the lat­est). Were I to take Flight B, I’d have to leave 5 hours before my flight time, and add an extra 3 hours after I get back in dri­ve time. I’m not sure about you, but the last thing I want to do after a flight is dri­ve 3 hours. That means I’d get home at mid­night!

Flight B requires $650 and 15 hours of total trav­el time.
Flight A requires $411 (or $367 with Über) and 9 hours, 20 min­utes of total trav­el time.

I wish I had done this kind of analy­sis for my flight to and from Seat­tle this week­end. Instead, I’m stuck fly­ing back into mega metrop­o­lis city at mid­night on Mon­day, and arriv­ing home at close to 330a. I’m more than like­ly going to be grumpy and bad-tem­pered (more so than usu­al any­ways) at work on Tues­day, which I’m sure my cowork­ers don’t appre­ci­ate. But hey, I saved $150 on the flight!
Have you ever spent more in an effort to save? When did you learn cheap­est wasn’t always the best option?

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4 thoughts on “The True Cost of Traveling

  1. LOL on the flight names. Your post remind­ed me of the times dur­ing study abroad that I would take pub­lic trans­porta­tion far out­side of the city to get on a 15 euro Ryan Air flight, arriv­ing super late at my des­ti­na­tion, even far­ther out­side the city. Great times.
    I’m super excit­ed for Fin­Con too! See you there!!

  2. This is exact­ly how I also analyse while book­ing a flight/similar trans­ac­tions 🙂 I was about to write a post on my blog high­light­ing the approach.… You saved my effort of writ­ing the post 🙂

    PS: The IRS rate ($.54 per mile) includes car depre­ci­a­tion and gas cost. So for your cost cal­cu­la­tions, you need not use $.725 but should be using $.54 . In case of $.725 you are dou­ble count­ing car depre­ci­a­tion and gas cost.

    Cheers!

  3. Good point that you make.

    The same can be said on buy­ing goods and clothes. The cheap­est shirt for work might not last that long as the more expen­sive ones.
    An exam­ple: when we went shop­ping for a bike trail­er for the kids, we took one that was 30 pct more expen­sive. Why? We had friends that had used it for 8 years and it was still going strong. For the oth­er brand, no such sto­ries exist.

  4. I love this stuff. So ana­lyt­i­cal! I actu­al­ly have a spread­sheet that cal­cu­lates the cheap­est way to get from my house to JFK air­port, three hours away, based on the what­ev­er gas, train and bus tick­et prices I input

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