How Much Your Commute Is Really Costing You

At first blush, a 40-minute commute each way doesn't sound like such a big deal. In some metro areas it's certainly common enough. Sure, those may not be the most fun 80 minutes of your day, but for the right job, the right neighborhood or the right schools, it's worth it, right?

That's just the sort of thinking that blog Mr. Money Mustache is hoping to dispel with a recent, eye-opening post on the true cost of commuting. In it, the entertainingly named author relates a conversation he had with a couple considering moving to his neighborhood and creating two 80-minute, round trip daily commutes in the process. "40 minutes, that's not too bad," said the couple, but according to Mr. Mustache, really it is. He explains:

Let's take a typical day's drive for this self-destructive couple. Adding 38 miles of round-trip driving at the IRS's estimate of total driving cost of $0.51 per mile, there's $19 per day of direct driving and car ownership costs. It is possible to drive for less, but these people happen to have fairly new cars, bought on credit, so they are wasting the full amount.

Next is the actual human time wasted. At 80 minutes per day, the self-imposed driving would be adding the equivalent of almost an entire work day to each work week â€" so they would now effectively be working 6 workdays per week.

After 10 years, multiplied across two cars since they have different work schedules, this decision would cost them about $125,000 in wealth (if they had for example chosen to put the $19/day into extra payments on their mortgage), and 1.3 working years worth of time, EACH, spent risking their lives daily behind the wheel.

So if commuting is really a giant hole in your wallet that money runs out of, what should you do instead? Simply, get a new house or a new job and reduce it, says the post. And before you point out that's easier said than done, Mr. Mustache would like to give your thinking a small shove with a few back of the envelope calculations:

Let's assume the average person's marginal driving cost is halfway between the Ultra-Mustachian driver figure of 17 cents per mile, and Uncle Sam's generous 51 cent allowance. So, 34 cents. Let's also assume the value of a person's time is $25 per hour, since this is close to a median wage for a suburban commuter.

For each mile you drive across two times on your round trip to work daily, it multiplies to 500 miles per year, or a $170 annual fee. For each of these miles, you waste about 6 minutes in the round trip, adding to 25 hours per year ($625 of your time). So each mile you live from work steals $795 per year from you in commuting costs. $795 per year will pay the interest on $15,900 of house borrowed at a 5 percent interest rate.

In other words, a logical person should be willing to pay about $15,900 more for a house that is one mile closer to work, and $477,000 more for a house that is 30 miles closer to work. For a double-commuting couple, these numbers are $31,800 and $954,000.

Are commute-happy Americans irrational to spend so many hours on the road, or is Mr. Money Mustache making moving closer to work seem like a simpler choice than it really is?

Read More on BNET:

• How to Take Control of Your Commute
• Telecommuters Need a 'Commute' Too
• Hate Your Commute? 5 Ways to Use It, Lose It or Enjoy It