It’s funny how often people make compromises they shouldn’t when buying a house – borrowing too much, not saving a down payment, etc. My house purchase was a huge mistake for a number of reasons, but today I want to focus on one specific reason, and how it’s affected my life since: compromising on location.
House Location & Transportation Costs
My house is not really close to anything; work, grocery store, gym, library, or anything fun (parks, hiking, etc) are all pretty far. Given my goals to drive less and bike more, my current location really is a bummer. The 14 mile one-way commute isn’t bad when compared to some others, but it’s really longer than I’m comfortable with, and I ignored that when buying my house.
I am now biking as much as possible, and I now have a fuel efficient car, but I continue to spend more money on burning gas than I’d like to, because of my location. A few years ago it was a lot worse. Here are some illustrative numbers:
- 4.5 years driving a vehicle that gets 20 MPG with an average of 190 miles per week (being generous), at $3/gallon: $6669 total or $1482/year on fuel.
- With my new car and habits, I drive a vehicle that gets 34 MPG with an average of 130 miles per week, at $3.5/gallon: $695/year on fuel.
That means my combined bad choices of vehicle & driving habits wasted at least $3541.50 over 4.5 years, and the choice of housing location wasted even more. Thankfully, as you can see, I’ve reduced my fuel consumption & cost by more than 50% (which is awesome!), but I can’t help imagining how it might look if I lived in town, a bike ride away from everything:
- 34 MPG with an average of 25 miles per week, at $3.5/gallon: $133/year on fuel.
Or if I was just a little bit more bad-ass, I could ditch the car completely, and save myself more than just the cost of fuel:
- depreciation & sunk costs in owning a vehicle (loss of $1000/year instead of positive cash flow from gains)
- car insurance costs (cost of ~$900/year)
- car maintenance costs (cost of at least $300/year)
In total, by moving closer to town and ditching my car completely, I could save at least $2895/year in transportation costs. This money could then be used to offset the increased housing cost of living in town, as well as contribute to my savings & financial independence goals.
By investing the money gained by selling the car, as well as continuing to invest the additional yearly savings of $2895 at 6%, I could have $73,510.41 of extra money in 12 years.
By biking and walking everywhere, there would be added physical & mental health benefits I haven’t even explored, and I would love the reduction in my carbon footprint.
Fun & Social Life
Because it’s such a long haul for me to get into town, I find myself somewhat secluded. I think if I weren’t so far out, I would be involved in more social activities, and take part in more fun. It’s difficult to justify driving for 30 minutes and burning $5 worth of gas just to take the dog to the dog park, or to attend a summer evening concert. It seems ridiculous to drive myself 20 miles to go on a hike in the foothills. Everything starts to seem far away and not worth the cost when you’re aware of how much you’re driving and what it costs to make the trip.
Friends are further away, and the cost of having a social life is steeper. It’s harder to drop in to check on my dog if I’m 14 miles away at work. The point is, compromising on location to save money or to buy a larger house just doesn’t seem worth it.
Maybe in the future I can detail additional reasons why buying my house was a big mistake – until then, have you ever compromised on living location, and how did it affect you?