We work, in part, to make money, but all the dough we spend getting to and from our jobs can make the trip feel like we're being robbed. Commuting can be stressful enough – the traffic alone could make someone want to put the brakes on their daily travel. But there are ways to save money on your commute that will have you feeling as happy as a dog with his head out the window catching a breeze.
Your commute doesn't have to leave you broke. Use your hard-earned money for more exiting purchases and let your ride be smooth sailing!
Carpooling isn't just for moms and dads taking their kids to soccer practice and Boy Scout meetings. Adults can carpool too, saving money and mileage in the process. Find some co-workers seeking to save just like you who live nearby. They don't even have to work in your office. As long as their workplace is near yours, you can commute together. Not only will this save gas money, but you'll deepen relationships along the journey.
Another plus, HOV lanes! As per The Simple Dollar, "On the days you do drive, you can use the HOV lane for more efficient driving. Even if you're just giving someone a lift each day, it's still worthwhile. If you have a HOV lane available to you, you can now access that lane and drive at a more reasonable pace with substantially less stop-and-go driving."
Not to mention, on those days you're not driving, you can sit back and relax as you're chauffeured to work. That's especially inviting on those mornings you're feeling like you didn't catch enough zzzzs or after a grueling day at the office.
If you can't seem to find anyone to carpool with, no worries. Consider ride sharing to set you up with others seeking a carpool. Via is great for flat rates rather than how long the ride is. Gett is another great option and you can even book up to two weeks in advance - so no excuses for not making use of the service. Duet is a cool one to try - it will set you up with commuters near you and you can even coordinate your rides together. Check out some more ride sharing options via Nerdwallet.
2. Use Public Transportation
If you reside in a community where public transportation is available to you, make use of the trains, busses, and subways regularly. This mode of transport is not only environmentally sound, but it's far cheaper than driving solo to and from work every day.
According to And Then We Saved, "There are costs associated with riding public transportation, but they can be offset by the money you save on gas." While your trip may not be any faster, you can get other things done on the way to and from your place of work. Catch up on reading, peruse the latest headlines, get prepped for a staff meeting, slug through emails, or listen to some tunes.
Using public transport for just a few days per week can add up to significant savings. Some places of business will even reimburse you fully or pay for a portion of your commute. Inquire with your HR department about the Transportation Reimbursement Plan. The Transportation Reimbursement Plan is an employer-sponsored plan which permits you to set money aside on a tax-free basis to reimburse yourself for qualified transportation expenses. Qualified transportation expenses are work-related parking and commuting expenses. As per the details of this plan, "In 2016, the maximum allowable parking benefit is $255 per month and the maximum allowable mass transit/commuter vehicle benefit is $255 per month. The two benefits can be used simultaneously for a total of $510 per month." That's a decent savings over a years' time!
3. Ride a Bike
Get in some heart-healthy exercise, breathe in the fresh air, and save money by biking to work if your job is located within a reasonable biking distance. U.S News & World Report notes, "A number of bikers say peddling past cars stuck in rush hour traffic makes their commute that much more pleasant." As those drivers are frustratingly sitting in all that congestion, you can zip by with a sense of freedom.
Many large cities have bike sharing programs, such as Citi Bike, the nation's largest bike share program. Rates are reasonable - the annual membership is just $14.95/mo with annual commitment (or $155/year if you pay in full). It includes unlimited 45-minute rides. Rides longer than 45 minutes incur extra fees: $2.50 for the first additional 30 minutes, $6.50 for the next additional 30 minutes, then $9 for each additional 30 minutes after that.
If you're located in a smaller town, you can purchase a reasonably priced bike at your local cycling or sports store that will last you for years of precious pedaling. Just be sure to be safe, follow the rules of the road, wear a helmet, and dress appropriately for bike riding.
4. Adjust Your Hours
If it's possible, talk to your boss or supervisor about adjusting your hours so you're not traveling at the height of rush hour. Even a couple of hours' difference (or less) can be a huge time- and money-saver. You will get to work much faster, saving gas in the process. U.S. News & World Report suggests that a different start time could potentially, "cut the time you spend commuting by half."
Another idea is to reduce the number of days per week you go into the office and add a few hours to those days you do work. Not only does this give you a 3-day weekend, but you'll save on travel expenses.
Your commute should be exciting, not expensive. Steer clear of extra costs you don't need to spend as you take the road less traveled!
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.