Is the cheaper place further out really cheaper?

Put the two places side by side. On top of the rent, we add what the drive costs your car and what the hours in it are worth at your wage. The rent is the number everyone sees. The drive is the one that adds up.

Compare two places

Option A, close

Option B, far

Monthly rent or mortgage

Commute distance, one way

Commute time, one way

min

Gas price

For reference only. The 67¢ per-mile rate already includes fuel, so this does not change the result.

Your hourly wage

What an hour of your time is worth. Your pay rate is a fair place to start.

What each month is made of

Why the far place costs more than its rent

"Drive till you qualify" is the standard advice for a first home. Here is what it leaves out.

Wear and tearEvery mile costs about 67 cents in gas, maintenance and depreciation at the IRS rate. A 60-mile round trip, five days a week, is over $10,000 a year in vehicle costs.

TimeTwo hours a day commuting is about 500 hours a year. That is 20 full days spent in a car, unpaid.

One breakdownWhen the job depends on the car, a breakdown means lost wages or a lost job. Closer in, transit, biking or walking give you another way to get there.

Keep going

Rent vs. buyOnce you know where, work out whether to rent or buy there.→ Housing calculatorHow much house a paycheck can actually carry.→ New vs. used carIf the commute means a car, what that car really costs over its life.→ Cost of livingCompare what a month costs in different places.→

Estimates for learning, not financial advice. FinMango is a 501(c)(3) nonprofit. No account, no ads, nothing stored.