Consider The Cost Of Driving

Being overseas reminds me of the sticker shock I used to get with buying gasoline internationally. Whenever I have been in Europe or Asia, I have always noticed how expensive gasoline is. When gas was $1.50 a gallon, it seemed that overseas prices would be $1 to $1.20 per liter (around $4 per gallon). Now that gasoline is about $3.00 a gallon, overseas prices are about $2.10 per liter (nearly $8 per gallon).

When we lived in Japan, I always knew the cost of going anywhere since we did not own a car and used public transportation (trains, buses, or taxis). To go shopping was about $4 round trip. To go to work (about 10 miles) was about $5 per day. Since the cost of travel was transparent, we always planned our trips to efficient - i.e. multiple activities for each trip, if possible.

Since I don't pay for each trip in the U.S., I never thought much about the cost of driving somewhere, until now. I do a lot of short errands to the library, bank, Costco, or other stores. The distances range from 3 to 6 miles round trip. In a good week, my truck gets 20 miles per gallon or about $0.15 per mile. That’s just for the cost of gasoline. My company reimburses $0.48 per mile for work related driving. This reimbursement covers insurance and depreciation in addition to fuel. Using $0.15 and $0.48 as the expense per mile shows a cost range of $0.45 to $1.44 for 3 miles and $0.90 to $2.88 for 6 miles.

Calculating the cost of driving was very enlightening. Today, even short trips cost at least two to three dollars. It now makes sense to do as we did in Japan – i.e. plan each trip to cover the multiple locations each time. For example, instead of three separate 5-6 mile round trips, I now travel to the library, Costco and the post office in one 7 mile round trip - for a savings of $5 to $18 depending on the mileage expense factor used.

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This is not financial advice. Please consult a professional advisor.

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