Reduce Spending

Save On Transportation Expenses

This one does not have a catchy coined term and I don’t feel like gifted enough to make one. Nevertheless, for most people transportation expenses is often the second biggest expense and it’s therefore well worth taking a hard look at ways to reduce this bill. Buying the newest car possible is usually what drives the cost up.

Save On Transportation Expenses

Alternative Transportation

Trying to figure out if you can do without a car can really help. A car is expensive: first you need to buy it, then you need to pay for insurance, maintenance and gas or electricity for electric vehicles.

If you live in a city with a decent public transportation system, this can be good way to save and forego that brand new car.

If you live close enough to work walking or using a bicycle rather than a car can also be a good way to save money.

But let’s face it, in most places in the US, it’s extremely hard to live without at least a car for the household.

Buy A Used Car

While buying a brand new car can be tempting, because this car won’t have any issue for a long time and it’s nicer, right? Wrong. A commuter car is a depreciating item, it is you guessed it, a liability. See asset vs liability. The game is then to limit expenses as much as possible, so instead buy a reliable, cheap and used car. In the US, there are a few Japanese cars that most car mechanics will be able to repair due to the abundance of repair parts. They are usually cheap to maintain and are among the most reliable models, not to mentioned the mileage is very good compared to most other cars. Toyota Corolla, Toyota Camry, Honda Civic, Honda Accord are vehicles that come to mind, circa 2010-2020.

The most cost efficient car we ever bought was a 1997 Toyota Corolla, we bought in 2010. The car had 116k miles. The maintenance was done, the timing belt had been changed at 80k miles. We had proof of the maintenance. We bought it for $2,950. It lasted until 2016 when the shocks broke down and the cost of replacement was not worth it. So we sold the car for $850 which could be re-sold for parts. Overall that’s just $2,100 for 6 years!!!

Our filter to find a decent car is:

  • Models: Toyota Corolla, Toyota Camry, Honda Civic, Honda Accord
  • Less than 15 years old
  • Less than 120k miles
  • Less than $4,000.
  • Proof of maintenance: that’s the tricky part. Very few owners keep the paperwork of the maintenance. But the very few who do are usually responsible people who take care of their car. For the models mentioned above, the timing belt should be changed at around 60-80k miles. That’s usually an ~$800 bill, so it better had been done.
  • Visual inspection: the engine should not be too clean. That’s counter intuitive, but you want a car that you know runs. If the engine has just been rebuilt, it may look clean, but you may not know if it will run. So you want a car that has not been heavily used, but nonetheless a car that is running regularly. Tires should have some life remaining: look at the thread on the tires, look for cracks (you do not want to see any).
  • Drive test: no weird noise. Starts properly. A bit of stop and go and a little bit of highway.

Buying from individuals off Craigslist or other similar websites is preferred than buying from a car dealership who will need to take their cut.

Yes, you will not find a lot of those. It took me a good 7 weeks looking at Craigslist daily. I only found a handful of cars worth looking at. And bought the first one that matched these criteria.

Also keep the record of all the maintenance you did, it may help you get a few more bucks when trying to sell the car.

Shop for insurance

Once you have the car, you want to shop for insurance to see what insurance company has a good deal at a given time. That can save you a few hundred dollars a year.


Overall you can save thousands of dollars per year, that’s more income to redirect towards investing to bring you closer to financial independence.