The real cost of your daily work commute

The longest I have had to commute for a job was 1 hour and 40 mins each way. I walked to the train station, did three line transfers en route, and then walked the last 20mins to my office. This was 9 years ago but I still vividly remember how tired and drained I felt at the end of my commute every day. Even though I had just reached the office at 930am, I already felt like the morning rush took 20% of my daily energy to deal with. Back then, I was young and inexperienced and glad to even have a job so I had completely underestimated how much the morning commute would take out of me.

Luckily it was a sales job, and as I got more experienced, I was able to plan client meetings at the start of my day, so that I could go straight to the client meetings and expense my ride back to the office, or work out of a Starbucks for most of my day. The job was fun and I learned a lot every day, but the commute was slowly killing me.

I tried a carpool system for months, but it merely cut my commute down to 1 hour and 15 mins. The carpool group picked me up near my house and dropped me off at the nearby train station, so I still had to commute the last leg. At least I could snooze on the car without worrying I would miss my stop.

Eventually, I succumbed and bought a car. Since I could now drive directly from point A to point B, it was definitely much faster. However, the morning rush hour traffic meant I needed to drive carefully, and any accidents on the highway meant a slight delay. I got my commute down to 45 mins. However, I had to stay sharp and focused while driving, which meant I definitely arrived at work with lower energy levels than before I started driving.

I could see how this wasn’t sustainable. Within the year, I set a plan into motion to move near the downtown area and find a new job within walking distance downtown. I was convinced that the extra 3 hours I would save daily would go into higher productivity at my job and more time for my personal social life.

After almost two years, I resigned and move into a new role with a downtown office space. This time, I could WALK, yes walk 15mins to my new office. It was incredible and I had never felt that sense of freedom before. The difference was immediately apparent to me, I arrived at work refreshed and energized to start the day, worked hard, and got home with plenty of energy to cook or dabble in my hobbies. Many good things started during that period in my life simply because I had the energy to do more. Some of these things also put me directly on the path to financial independence.

If my story sounds familiar to you, let’s talk about the true cost of commute:

1) Time

In the above example, I spent 200 mins daily commuting, and when I cut it down to 30mins by moving close to my new job, I saved 170 mins daily. That’s 2 hours and 50 mins! Multiply that by 20 days in a month, that's 3400mins = 56 hours which translates to saving 7 working days a month! Holy moly!

How much do you get paid at work? Assuming the average American hourly wage of US$26, that's about US$1473 I was losing every single month. Imagine translating that time into a side gig and earning direct returns every month. That contributes directly to your goal of financial independence or just funding an extra vacation every year.

2) Energy and Productivity

Imagine if you had a teleport in your home. Once you were ready for work, you could step into the teleport and poof, you arrive in your office within a split second. How amazing would that be?

You do not have to spend a single second walking to the train station, fiddling at the ticket gantries, waiting in line to get on the train while listening to the loud blaring rock music leaking from the headphones of the young punk standing next to you. You do not have to pack yourself into the train of sardines, hold your breath because it's your lucky day and your fellow commuter forgot to put on deodorant. You do not have to pop your earphones into your head to listen to your favorite podcast or hold your phone/book precariously with one hand to try to read, while the loud grinding of the train on the tracks keeps you constantly on edge. You do not have to briefly visualize your plan if the train breaks down and you get stuck in it for three hours. Ouch! Someone jabs you in the back as they try to cosy their way up to the exit, waking you out of your doomsday daydreams. Finally, you arrive at your stop, and walk the last minutes to work, feeling either way too hot or way too cold depending on the season. You get to your office, plop down in your chair, flip open your laptop and feel like you just want to go home.

Everyone has limited willpower and mental energy, that's why experts recommend you make your toughest decisions in the morning, where you have the most willpower and mental fortitude. If you have wasted a ton of it daily within the commuting system, you are just not going to be as sharp and focused as your co-workers who had little or no commute. You could certainly rely on imbibing more coffee, but that's just a temporary boost, and it still doesn't alleviate the true cost of your commute.

If you are a racehorse that looks worn out simply by getting from your stable to the gates, you probably wouldn't bet on yourself. In the competitive environment today, the ability to give your utmost focus to your work matters between a promotion and a meets expectation. If you are planning to get to financial independence one day, you need to be able to get those raises and promotions as quickly as possible in order to save more towards your investments.

Also read: The secret to growing your salary 500% in 5 years

3) Social life and hobbies

The commute cuts both ways. By the time you get home in the evenings, you plonk down on your sofa gratefully and go into human vegetation mode. You tell yourself that you need to unwind and unplug from the daily grind, so you start flicking through Netflix or youtube, and before you know it, 3 hours have gone by and it’s bedtime. What? I did not even have time to read, or play my guitar, or do the dishes from two days ago.

Life can’t just be lived on the weekends. Sure, if there is an important project at work requiring you to pull long hours, that's fine, that will hopefully translate into a bonus or promotion if all goes well. Burning your hours on weekday evenings on mindless channel flicking just to decompress from your commute is simply a waste of your potential as a human being.

In my previous example, I typically woke up at 815am, arrived in the office by 915am, left the office at 630pm, and reached home before 7pm. I slept at midnight and still got my full 8 hours of sleep. Between 7pm-midnight, I had 5 solid hours, almost as long as the workday itself. Imagine what you could do with all that time. Spend it with your family, friends, try out a new recipe, practice your hobby, watch a Udemy video to learn a new skill or launch a new online store selling craft items.

Even if you spent 3 hours on administrative and social needs, and 2 hours acquiring or practicing a new skill, that 2 hours every weekday night translates into 520 hours a year. In the book Outliers, author Malcolm Gladwell says that it takes roughly ten thousand hours of practice to achieve mastery in a field. Imagine getting really great at a new thing every year! Think of what it could add to your personal and professional life. If you focused it all on getting to financial independence, think of the years you could shave off your journey to early retirement.

Also read: 10 side hustles you can try while keeping your full-time job

4) Cost of transport

In my example, I went from public transport to driving to work in an attempt to cut down my commuting time. I did heavy self-justification in buying that car. After factoring in car payments, gas, insurance, car maintenance, depreciation and parking fees, all I did was use $1000 a month to buy an extra 110mins daily / 37 hours monthly. That's $27 an hour, yes $1 more than the average American hourly wage. Was I going to put the extra time saved into something that was going to yield me more than the average American hourly wage? Possible, but I would have to work hard at it. Depending on your commute length, cost of your car, and enjoyment you derive from driving in rush hour traffic, you might find this palatable but I did not.

Every time gas prices went up, or yet another road construction began on my path to work, I winced. When the news report global warming and crazy weather fluctuations, I knew I was contributing daily with my insanely long commute.

Even if I got rid of the car and stuck with the train, I am still paying for the train ride that contributes to noise and air pollution. There’s a cost to me, and there is a cost to the environment for commuting long journeys daily.

So what’s the solution? Downtown prices are insane!

Of course, not everyone can afford to rent downtown like I did, but that’s not the point here. The point is to stay near your office, within walking distance preferably. There are millions of large and small businesses located all over the world, and hundreds of housing options near each one. Why pick a job which requires you to commute more than an hour daily? Either stay near the job or find a job near you!

Armed with your newfound information of opportunity costs in terms of your time and energy, do some research in the market and carefully weigh if the salary of a potential new role can be balanced against commute time.

Remember, if you are commuting 3 hours daily to work at a job that pays you $240 a day for 8 hours of work (~$62,000 annual), your effective hourly wage just went from $30 an hour to $22 an hour. Factor in the costs of a car at $1000 a month (including parking, gas, depreciation, maintenance), that brings you down to $17 an hour, almost half of your original wage!

Recall that the two main levers you can pull to get to financial independence are your earnings and savings rate, so you might be doing yourself a big disservice if you don't get the cost of commuting right.

If you are deciding between a new job location or renting/buying a new place, try using this template to decide which job-home pairing is worth more

Cost of commute calculator

(A) Monthly salary

(B) Monthly rent/mortgage

(C) Monthly cost of car (including monthly payments, parking, gas, maintenance, insurance)

Net monthly inflow = (A) - (B) - (C) = (1)

(D) Commute time daily

(E) Working hours daily

Total hours spent at and for work = (D) + (E) = (2)

Actual hourly pay with commute = Net monthly inflow / Total monthly hours = (1) / [(2) X 20 work days] = (3)


Compare that to another potential job-home pairing where you don't have to drive and have a short walking commute. Even if the rent or mortgage is slightly higher, I am willing to bet that staying close to work almost always works out to be a net positive.

Making active choices to cut down your commute can be the best thing that ever happened in your life. The benefits can be reaped immediately and daily from day one, and trickle down or amplify all other aspects of your life and work positively. As I walked home from work daily, I decompressed enroute. Sometimes I detoured via a park and allowed more peace and calm into my life, while planning my next side hustle or social gathering in my freed up headspace. I was visibly happier and less tired at work, which allowed me to volunteer for more tasks, and to socialize with my coworkers after work and get to know them better.

Trust me, engineer that commute to optimize your life daily. In the process, you can save the earth and reach your financial independence goals earlier. Everyone wins.

Also read:

Stop doing these 3 things today if you want to reach Financial Independence earlier

What is FIRE?

Willpower: Rediscovering the Greatest Human Strength
By Roy F. Baumeister, John Tierney
Outliers: The Story of Success
By Malcolm Gladwell