notfred

I make what would generally be considered a pretty good salary, but I live in a very expensive part of the country. I want to start saving to buy a home in the next couple years (start saving now, to buy a home in a couple years - not start saving in a couple years), but a home around here will probably cost me about $600,000 or more.

I currently own a pretty nice car, and make payments on the car that come to over $1000/month once you factor in gas and insurance, but I plan on paying off the car in a few months, and so that number will drop substantially, but will probably stay over $300/month even after the car is paid off. I'm sort of considering selling it at the end of the year, I use it regularly in the meantime, but there's a good chance I won't need it very often starting in February.

I currently bike commute because it's efficient and healthy, but I've been thinking about how much faster I could buy a home if I didn't have a car to pay for.

I've also thought about moving to Portland, but I don't know how I could keep my salary if I moved there.

It's obvious that not owning a car is cheaper, but I'm just wondering if anyone else here has used this to their advantage to make big changes in their lives, like buying a home.

AStomper

I've made big changes, like eating, and getting drunk on the weekends. But, for the move to Portland, if you have to take a job that doesn't pay as much, and can't find a similar house for a similar price, then your not saving money at all, though the avoidance of headaches from JAMs might be worth a grand a month. What I've noticed about cost of living in different places in the country is that food and entertainment cost the same, insurance and utilities vary a little, and housing varies by thousands a month.
I too have thought of moving to Portland, but have yet to turn in any job apps., or look at the price of apartments there.

ItsJustMe

How the heck would a paid-off car cost $300/month? Is your insurance that high? I'm paying about $300/year in insurance (PL/PD) but it was only about $600 when I had full coverage on it. That's $50/month. $250 in gas is 83 gallons, or 1600 miles; I guess if you were driving 80 miles a day it could cost that. But if you're commuting 80 miles, I doubt you're now bicycle commuting the whole way.

Anyway, no, I had no problems buying a house even with just a one income house and two cars, one paid off and one with payments. We have never had two new car payments at once, we stagger our purchases. Actually I'm done buying new cars; I don't see any point whatsoever in buying a new car. My wife still wants one, so I guess I'm driving hand-me-downs for the rest of my life. I don't drive much anymore though.

This isn't a particularly expensive area to live in. But I've seen the expensive areas, and talked to people from them, and I don't see why people actually want to live there.

notfred

Insurance on the car costs $200/month. In the last 30 days I've spent $156 on gas. At 3.50/gallon for premium, and 25mpg, that's 1,114miles/month.

I dunno, I'm glad you get a better deal on insurance than I do?

Bill Kapaun

When I bought my house, it worked out that my yearly mortgage-tax deductible interest was nearly identical to the rent I had been paying.
My "standard of housing" remained identical, since I bought the house I was renting because I was too lazy to move.

slowjoe66

"Actually I'm done buying new cars; I don't see any point whatsoever in buying a new car. My wife still wants one, so I guess I'm driving hand-me-downs for the rest of my life. I don't drive much anymore though."

+1 on that. I have a late model vehicle that I purchased before beginning to commute that sits in my driveway for 5 or so days a week, while I finish paying her off. I can't imagine why I will put enough miles on her in the next decade or so to need to replace her. I worry that I'm not driving her enough to keep the battery charged. I use the bike for as many short trips as possible and commute at least 3 days a week (I only work 4).

If you go to commutebybike.com there is a calculator on the side bar where you enter some info and it calculates how much you save by bicycling. That is a start.

randomgear

You might want to look into Zipcar.
I have been using them in Boston for about three years now. They come with insurance, gas and their very own parking spot.
I Bike for the daily commute and walk or bike or public trans for short errands in town, zipcar for out of town trips and meetings. (for the meetings I just expense the bill) For long weekends traveling far away I end up using a rental car.
Just looked up San Fran on Zipcar -$9 to $11/hr, but it looks like there is only 15 cars in your city, so unless you live or work near a few of them it might not work so well for you.

ItsJustMe

Holy blippin' hell. $2400/year? For one car? We only paid about $1100/year for two cars on full coverage insurance, one about 2 years old, the other 5. Maybe your cars are more expensive than ours (they were about $20k cars) or maybe your "expensive place to live" is also a high crime area so insurance costs a lot.

We don't usually wind up financing much on our cars, between trade-in and some cash up front usually our payments on $20k cars are only maybe $130 a month for a couple of years. Sometimes we just buy them outright.

One of the benefits of this relatively cheap place to live is that we don't lock our house or our cars, and in fact I don't even carry a lock for my bike. I don't know anyone who's had their house or car broken into. I suppose I could move to a more expensive place to live, make more money, pay more for insurance, pay more for my house, have to lock everything, and wind up with more stress and worry, but I don't think that's a really good trade. I'll stay here and make a little less money.

Dahon.Steve

Selling the car will enable you to hold an additional 30-40K mortgage. However, if the home cost 600K or more, you'll need a wife or a huge down payment to pay that mortgage. I was shopping not too long ago and a 2 bedroom condo (269K) required about 89K in salary with a 10% down payment. A 600K mortgage will require a salary of about 180K minimum to hold down that mortgage.

San Francisico is the one of the most expensive places to buy a home in the nation. Selling the car will help with the numbers but you still have to make very good money.

Psydotek

Bike riding to work doesn't save me $$$ to buy a house. My gas money goes to my train ticket instead... The joys of having a bike-train-bike commute. At least i don't have to stress out sitting in traffic.

Bushman

my bike riding did'nt save me any money period. The money i dont spend on gas i spend on more food now. My insurance is about $60 CDN a month for everything, gas is about $40 CDN a month now (used to be about $200). The apartment was paid off in one go, bought over 14 years ago for $60,000. Today its appraised at $227,000 because the real estate in Vancouver BC is sky rocketing off the charts. I'm just waiting for the 2010 Olympics so i can flip it.

lima_bean

I have never been a driver in a car accident, I have never recieved a moving violation of any kind and only 2 parking tickets ever. I had a modest 4 door sedan I bought new for 14.5k I paid cash for.

After extremely intensive searching, haggling, and price comparing, the cheapest Insurance I could find came to 1920$/6months or 320$ a month. That was several years ago though.

Not sure how they do their numbers, but unfortunately if you have the wrong set of statistical makeup insurance can be very very expensive.

I dont pay for insurance anymore, I gave my car away to my parents

Cyclaholic

I have 5 properties. I inherited 2 of them, own 4 of them outright and in about 6 months I'll discharge the mortgage on the 5th one. Next I'm looking at buying some arable land, enough to be able to set my family up 'off the grid', once that's in place we'll either be in a position to survive the post-oil meltdown in relative comfort or enjoy a finacially independent retirement.

What role has my car-free cycling lifestyle played in my financial decisions? It has certainly freed up substantial income so as to hasten the process initially, but more than that it has led me down a path of much greater awareness on many issues, which in turn has profoundly influenced my financial decisions.

Even though I can afford it, there's no way on this earth that I can justify owning a form of personal transport that costs 2x the value of my bike just to insure for 1 year. That makes absolutely no financial sense (to me) whatsoever.

marqueemoon

No, and no.

heywood

Yes it did and still does, I'm not in debt up to my eyeballs because I put money into the mortgage & maintainence on my house and ride my bike to work and to do chores I can always rent one if I really need it.

Juha

Yes I do and no it didn't. My alternative to bike commuting is public transport, which here equals to roughly 70€ per month. Take bike maintenance costs from that plus all the money I spend in cycling gear. I may save enough to buy me a nice bottle of Scotch Malt whenever I feel the need, but that's about it.

--J

heywood

Same here guy.. The insurance companies over the last 10 years here in Toronto have jacked-up the prices to extorsion levels. I just said 'forget it' I also returned a leased car we had without renewing or geting a new car..the look on the sales peoples faces was priceless when I told them I wasn't interested in another lease or buying a car..they actually asked me how I was going to get to work if I didn't have a car..i said 'by bike'..they just looked stunned.. it was priceless..

Eggplant Jeff

NotFred, if you're within the area served by a car sharing program (ZipCar, FlexCar, etc), sign up for it now. That way in february when you're considering ditching your car, you'll have a good idea what it's like. Financially they are TOTALLY worth it... I'm slightly better off than you, because I'm in Philly, and use PhillyCarShare (a non-profit car sharing service), so my costs are somewhat lower, but not by a crazy amount. Even at the for-profit prices, the fact is THEY pay the insurance and gas... so all you're paying is the hourly rate, and only when you need a car. The only thing is how convenient is the nearest car to where you live (if you have to bike 5 miles to get to a car, it's not really that useful... I have to walk 4 blocks, so it's no big deal).

I feel you on insurance, my insurance (both car and home) went up 3-4 times from what it was in Va.

I'm not sure how "big" a big change I've made... I ditched my car hobby (I used to work on my own cars and whatnot) after I started biking, which has definitely saved a ton of money. I think it's mostly gone into paying a higher mortgage payment than before, plus generally not having quite as tight a budget. So it has affected my house to some degree, but not to the point of "I couldn't buy a house if I didn't bike."

Oh and I am not car-free, my family and I just went from 2 cars to 1 car after moving here.

TheBrick

Ok I don't know the s.f market but I do live in London, a place that comes up 1st or 2nd most expensive place in the world to live interms of house prices and my partner has just manged to buy a flat on a teachers wage, it is not the dream place but a stepping stone. 600,000 usd seems like a lot of money, do you think that maybe you are expecting to start off in a house that is a bit past your income stream, trying to keep up with the jones, consider living in a different neighbourhood or a slightly smaller place. From looking at the maps of sf it seems to be a pritty small place so you will never be that far away from anywhere.

Yeah cycling saves me some money but not alot.

Redrom

Not so much saving money by riding a bike. To live close enough to work to bike safely, the home prices are about 25%-50% higher than living a "car-commuting" distance from work. We actually chose our house because it was on the bike path, and a little more than 3 miles down the path work is just off the trail as well. It's a fairly safe ride, and worth the money I think.

HardyWeinberg

I think bike-commuting, staying to one car (paid off) has made a much nicer comfort zone in the cash flow around our current mortgage payment, but the downpayment was pretty much bike-free.

Car insurance is another topic, ours just went way up for no apparent reason. I thought it was supposed to be all downhill from here!

1ply

You would think that since the car is aging, it's becoming less valuable and therefore cheaper to insure. WRONG. Our insurance for the one car we do have has stayed fairly steady over the past several years even though the car will be turning eight soon. On the good side, our insurance could be going up so I guess we'll take what we can get.

Riding the bike and keeping only one car I estimate saves me about $500 every month. This includes the cost of paying for a used car, insurance and gas. It does not include maintenance, licensing, registration, environmental testing, replacing crappy parts that break (since it is a used car that I'd be buying) etc.

When you think about it, the $500 quickly can become $600 or more. I'll keep one car for as long as I can thank-you

bike2math

+1 Keeping us a 1 car family really makes the budget alot more flexible. Also as neither of us uses the car for commuting we can afford to have an extremely large deductible on our insurance.

Those of you who are paying 2000+ for insurance on your cars need to check if your deductibles are as large as they could be, ideally you should choose the largest dedectubile your company offers. This does two things it keeps your rates low but it also cuts back on the number of claims that you make. The number of claims on your car insurance is one of the main factors you can control that will affect how much you will pay for home owners insurance. Also don't forget when shopping for home owners insurance to keep that dedectuble high as well.

tarwheel 

I haven't saved any money bike commuting, but I have more free time (get rides in commuting rather than after work) and my cycling mileage is up. Although I've reduced my gasoline consumption a lot by bike commuting, and I've probably saved $150 on gas since last spring, I tend to spend more money on bike products. Eventually, the extra bike-related costs will probably drop considerably, since I started bike commuting I've had to buy new tires, tubes, a larger seat bag, rack, bike computer, fenders, etc. The cost of cycling gear adds up pretty quickly. Some of the gear I would have bought anyway, but certainly not all of it.

I also bought a new bike over the winter to use for commuting. I could have used one of my existing bikes, but wanted a dedicated commuter rather than loading down my recreational bikes with racks, bags, fenders, etc. Cycling is also my main hobby, so I tend to look for excuses to buy gear. I certainly could have started bike commuting without spending much money, if that was my goal. However, some of the purchases were necessary -- such as a larger bag and rack to carry gear.

Regarding insurance, we pay $230 a month to insure 3 cars (one with a teenage driver) as well as our home. Didn't realize we had it so good.

ghettocruiser

Yes, and No.