Thursday, December 10, 2009

Slash $1800 Off of Your Transportation Costs

The average American spends nearly 18-percent of their income ($5,400 if you earn $30,000) on transportation costs. That’s according to the U.S. Labor Department’s Consumer Expenditures Report. Cutting just a third of those expenses could save $1,800. Here are 3 tips to help you put the brakes on increasing costs.

Part-Time Driving- Save $40 a month by joining or starting a carpool. Find out if your co-workers live near you and start saving. Use the savings to buy a $40 I-Bond each month and after 25 years you would have approximately $24,000. Also, try starting a kids school pool with “trustworthy” neighbors or relatives. Doing so cuts at least 15-percent or $225 yearly off gas expenses.

Public Transportation-Catching the bus, rail or subway three times a week can shed 20-percent off your gas bill. Saving you more than $300 in yearly fuel costs. Using public transportation every work day saves over 50-percent or $750 per year. After 25 years, a onetime investment in a stock that earns 8-percent interest annually, transforms a $750 investment into a $5,136 payday. If you kept putting $750 each year into a mutual fund earning 8-percent you would have $59,215.81, after 25 years.

Auto Maintenance- Poor maintenance is eventually expensive. Maintain your oil levels, tune-ups, repairs and tire air pressure. Doing so improves your car functions and decrease gas consumption, effectively saving your wallet.

You can use the $1,800 to fund your IRA, pad your emergency fund or go on vacation. Of course, every family has to consider their own needs.

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