Spring has well and truly arrived, (though you wouldn’t think it, given the deluge Sydney received Monday). The days are getting longer and warmer, which makes the idea of outdoor exercise a lot more attractive. So what about if we told you that decent cash reserves could be saved, while improving your well-being and the planet’s? Sounds too good to be true, but it’s surprisingly accessible, by riding to work. Writer Peter Wood, provides some compelling reasons to make changes to your daily commute.
Pedal power could be one way to ditch poor cash flow concepts that are simply bad habits. After all, the easiest way to improve your savings comes from redirecting money without seeing it.
Not convinced that donning bike shorts is your thing? What if you could save up to $80,000 in five years?
Car commuting: The death of savings health
With today’s transport costs on the rise, ditching the car for a bicycle can have a hugely positive impact on your savings.
According to NRMA research, weekly running costs for commuting to the Sydney CBD by car in 2012 cost some residents up to $280 a week. From Windsor in the northwest, just one week of road tolls costs $100.
If you took that $280 and saved the money each week in a high interest savings account that returned 5 per cent interest, you would have more than $82,800 in five years. The total interest you accrue tops $10,000.
But your commute is cheaper…
You may think you avoid high costs in a city without tolls, but the NRMA study took into account insurance, depreciation, maintenance and more. And one of the cheapest cars and commutes still reached $174 each week.
Even with the cheapest car in the study you would still be able to save more than $50,000 in five years using compound interest and a high interest savings account.
Public transport still hurts cash flow
If you’re skeptical of ditching your faithful public transport route to save a quick buck, the long-term savings may substantiate the current pedal power enthusiasm.
Quitting public transport in Sydney comes with big cash rewards. A city commute on the Parramatta train costs $4.80 a day, or $1560 a year with bulk discounts.
The Parramatta train commuter, if they’re up a big challenge, could choose to cycle their commute to the CBD each day and then double their $30 savings to make $60 deposits each week. Using a high interest account with 5 per cent interest they could put away more than $17,700 in five years.
The power of compound interest kicks in almost $2155 – equivalent to around nine months of your own savings.
According to the British Medical Association, inactivity poses a risk 20 times greater than riding a bicycle. You may be risking your health by driving everywhere and living a sedentary lifestyle.
Integrate healthy physical activity into your daily routine and save any money usually spent on gym memberships. Riding just three hours each week also reduces the risk of heart disease by more than 50 per cent.
Riding to work could be one of the most viable options for boosting your financial position, and the money you save on weekly commuter costs can quickly become hugely beneficial to your savings strategy.[Sources]