Transportation expenses is one of the four main categories of necessary expenses together with accommodation, food and taxes.
Therefore, it is very important to research well the different available options.
Here are the FILIP suggestions to reduce your transportation expenses.
1. Work from home (Estimated monthly cost £0-£50)
In the last few years with the technological advances in internet and telecommunications, there is more opportunity to work remotely from the comfort of your home.
Furthermore, many employers now promote homeworking both as a way of reducing their own overheads as well as a way of offering more flexible working arrangements to their employees.
You can negotiate home working with your current employer or search for a job that allows more home working.
By working from home you do not only get the benefit of zero or minimal monthly transportation expenses but you also increase your overall life quality as you save commuting time and you can organize better any other things that need to be done such as home deliveries of your orders or repairs and maintenance work that needs to take place.
2. Move closer to work (Estimated monthly cost £0-£50)
A very effective way to reduce or even eliminate your monthly transportation expenses is to move closer to where you work.
If you are renting or you are thinking of buying a flat or house, it is worth considering moving within walking or biking distance from your office.
This can eliminate or significantly reduce your monthly transportation expenses as particularly in big cities travelling by train or by car is very expensive.
Finally, the benefit of walking or cycling to and from the office on a daily basis can be significantly beneficial to your health and increase your fitness levels and overall wellbeing.
3. Buy a used car instead of buying a brand new car (Estimated monthly cost £300-£400)
Buying a new car, especially a good one, is a significant outflow for which you need to budget carefully.
If you want to buy a new car it is wise to set up a medium term savings target, between 12 and 24 months, and save the amount required to buy the car paying cash. Otherwise you will need a loan in order to finance the purchase of your car, this loan will come with some interest that you will need to pay therefore increasing the total cost of your new car.
A sensible alternative to buying a brand new car (which is one of the fastest depreciating assets as it loses 20-30% of its value within the first year) is to buy a used car.
Typically, you can buy a used car in a good condition after 4 to 5 years with less than half the amount of money you would need if this was a brand new car.
You need to do your research in order to ensure the car is in a good condition, hiring a mechanic to check the car before buying it is a good strategy and can save you a lot of headache and unpleasant surprises after you buy the car.
It is also more likely that you will be able to buy the car using cash or getting a very small loan amount that you could repay in the next 1 to 2 years.
4. Use public transportation (Estimated monthly cost £50-£300)
If your office and home have good transportation links and you don’t mind sacrificing the comfort of travelling with your car you could get a significant saving each month by travelling to work using public transportation.
It is typically cheaper to buy an annual or a monthly travel card.
If you do not need to use the public transportation on a regular basis or you are travelling frequently on business trips you can further slash your travel costs by paying weekly or even on a daily basis for the weeks or days you use public transportation.
You also do not to incur these costs for the time you go on a holiday.
5. Carpooling (Estimated monthly cost £100-£300)
Another way not to sacrifice the comfort of travelling by car and still reduce your monthly transportation costs is by finding one or two neighbors who work close to where you work and travel to and from work together each day.
Or maybe one of your colleagues lives close to where you live.
Just by finding one person to share your trips to and from the office can halve the monthly transportation cost.
Until the next article or video make informed financial decisions!