32 comments

Unleash your Inner Hasselhoff for Greater Riches

“I drive a pickup truck because it’s comfortable and sometimes I need to haul things on the weekend”

“There’s nothing in the fridge right now so let’s just go out for dinner”

“I’ve read that Mr. Money Mustache claims to save $94,432 every ten years by riding a bike, but I don’t HAVE a bike, so that’s not an option for me”

“It would be nice not to have to drive an hour to work, but it’s just so much hassle to move to a new house”

Whenever I hear people explaining some of the biggest expenses of their lives, they are usually expressed in terms of emotions, hassle, and fear of the unknown. They are afraid of making changes in their lives because they are imagining a great tsunami of pain and inconvenience washing over them as soon as they try to change the status quo.

Oh no! I can’t deal with the hassle! My life is already hard enough!

But guess what? You’re already IN the tsunami, Sukka! How much hassle is it to get up uncomfortably early every morning, rush through breakfast, drive on a crowded and/or slushy road, stare out the office window as day after beautiful day slips by, and maybe miss out on bringing up your own children because you and your spouse both work full-time jobs?

So you’re already an expert at dealing with hassle. You do it every day, and the reason you do it is for MONEY. If you have a job that you keep mostly because you need the money, you are a professional hassle-manager. Let’s invent a slick new word for it – you are a Hasselhoff.

As a Hasselhoff, you should probably start looking around at who will pay you the most for putting up with hassle. Right now, perhaps you make $60,000 per year, which is $28.84 per hour. After all taxes, let’s say that is about $22 per hour. You can advance to a better job, but maybe there are some other ways to use your time where you’ll get paid even more.

What about the pickup truck owner at the top of this article? He has a 2005 Ford F-150. He drives it to work as well as using it for weekend ‘hauling’ and even road trips. But in truth, the truck is only loaded up with so much stuff that it wouldn’t fit into a good hatchback car about 4 times per year. He drives 15,000 miles per year at an average of 17MPG. This costs him $3300 in fuel.

If Mr. Pickup could grow a bit of a Money Mustache and switch to a normal 5-passenger car that got 32MPG, his fuel cost would drop to about $1750… saving $1500 per year.

Now he has $1500 to spare, and 4 days per year when he can’t quite fit everything he needs to haul into his Toyota Matrix. That is $375 per day. He has to either rent or borrow a truck to carry this stuff, or pay for a delivery truck. And he gets paid $375 to do it. Assuming the borrowing takes 4 hours longer than using his own truck, he is getting $93.75 per hour for his Hasselhoff abilities, compared to the $22 per hour that he gets at work!

Now that you see where I’m coming from, you can see that you ALSO are getting a raise over your day job by going to the grocery store, and spending the time to get yourself a bike.

But what about the biggest hassle listed above, moving to a new house?

It sounds like a big project. But I’ve done it a few times (currently on my third owned house and 9th address including rentals over the past 15 years), so on the most recent move I actually kept a work log of how much time it takes to move. I included sprucing up the old house for sale (or rent), house shopping, getting a mortgage and going to two closings, packing up the old house, doing the move in a $50 rented Uhaul truck, and unpacking into the new house. Overall, it took about 200 person hours, equal to about one month of office work including commuting, or one month of the average American couple’s combined television watching.

If this couple considers themselves professional Hasselhoffs and is earning $22 each per hour, then the move costs them $4400 of their time. If they are buying and selling a $250,000 house, and they lose 6% in realtor commissions and other closing costs, that adds $15,000. Yeesh, that’s about 20 grand in total. Will they ever get that back?

The short answer is YES – making a move like this actually saves them about $1600 a month – enough to pay for the 20,000 in relocation costs AND have about $1450 a month left over to turbocharge their ‘stash! (I included the math to back this up at the bottom of this post so you can review the calculations).

Using my usual 10-year example, this family who moves closer to work will be about $256,000 richer after ten years, just for moving! This is a gigantic part of what anyone needs to retire.

My job as Mr. Money Mustache is to teach you that whenever you hear the hassle bell ringing and trying to sway your purchasing decisions, make sure you sit down with a calculator and see if it’s actually a hidden opportunity to increase your pay as a Hasselhoff. If you’d like some help with the calculations and some free entertainment to go with it, send me a comment with your own situation and we’ll see how we can increase your pay.

—————
The Math:

Their new house is within year-round biking distance (3 miles) of one job and medium car commuting distance (10 miles) of the second job. The old house was an average of 25 miles (40 mins) away for EACH person. Let’s assume they both still drive for simplicity.

Old situation: 80 minutes round-trip x 2 people = 160 minutes/day = 53 hours/month.
53 hours/month x $22/hour = $1173 per month of commuting time
Plus driving costs of 50 miles roundtrip * 2 people * 20 days/month * 50 cents/mile
= $1000/month of commuting costs
Total: $2173/month for commuting

New Situation: 10 car-minutes for the close worker + 32 minutes for the further one, round-trip = 14 hours/month = $308 per month of commuting time
Plus driving costs for (6+20) roundtrip miles per day x 20 days/month x 50 cents/mile
$260/month in commuting costs
Total: $568/month for commuting

Savings: $2173 – $568 = $1605 per month
If you use $150/month of this to service the debt on the extra $20k of moving costs, you have over $1450 left over.

  • Jeremy Day May 24, 2011, 9:31 pm

    Hi MMM,

    Found you on Jacob’s ERE blog. You will find most of us are quick to correct any wrong math.

    $150/month will not pay off a debt of 20k in 10 years no matter what interest rate you use. 150×12 months = 1800 x 10 years = 18k.

    Sorry to correct you. I still agree with your overall point. Just wanted to point it out.

    Cheers,
    Jeremy

    Reply
    • MMM May 24, 2011, 10:26 pm

      Hi Jeremy, thanks for reading!

      I definitely appreciate any math checkers out there since I do a lot of furious typing on various calculators when I write these articles.

      In that footnote you are commenting on, I meant that the $150 would more than permanently pay the interest on the 20k moving cost, if one were to borrow that amount.. not that it would fully be paid off after 10 years. The idea I meant to portray is that sometimes moving to a house with a higher monthly cost is actually cheaper if it cuts your monthly expenses more than the added cost of the interest on the debt.

      Does this make sense with that added explanation? If not I’ll just re-work the numbers in the article itself to avoid confusing future readers.

      thanks,
      MMM

      Reply
      • Jeremy Day May 24, 2011, 10:48 pm

        Oh yes, makes perfect sense. It is good to look at how big changes, such as buying a car or a house, can help bring down your overall expenses and help you save more in the long run.

        Ultimately, people need to review their finances on a regular (probably monthly or quarterly) basis, and take a big picture long term approach to making decisions.

        Good stuff!

        Cheers,
        Jeremy

        Reply
  • Oskar July 22, 2011, 2:49 pm

    When we moved into our current house I included the transportation to and from work in the calculation of ‘total cost of housing’. We compared houses within walking distance, others within 15-30 minute distance but with public transportation alternatives and also some houses that were further away with 1 hour drive and no publictransportation possibilities. I out town it showed that the further out you got the cheaper the house but also the more driving, the options ended up being cost neutral and we ended up buying one about 15 minutes from work, as it was the house and the community we liked most. I think this shows you need to look at more than what the house costs when you are looking for a place to live.

    Reply
    • MMM July 24, 2011, 10:57 am

      This is a Very inspiring tale, Oskar. Most people drastically underestimate the value of their time and the cost of extra car ownership and driving when buying a house. If they did the math correctly, nobody would be car-commuting even 30 minutes to work except in rare cases like jobs in Manhattan which pay $300k per year and the housing prices drop by many thousands of dollars for every mile you get further from the employment center.

      Reply
      • Meadow June 4, 2012, 10:22 pm

        Yes what do we do if we work in Manhattan ?

        Reply
        • Mr. Money Mustache June 4, 2012, 10:45 pm

          If you’re following the principles of this blog, you’d find the best compromise you can between proximity and cost, live like a pauper, save up a shitload of money, then get the heck out of that area to enjoy a nice early retirement!

          Alternatively, if you really like the work and have nothing better to do with your time, you keep working, maybe spend a bit more along the way, and eventually end up with several more shitloads of money – a sufficient amount to pay the higher cost of living there indefinitely, even after retirement.

          Just remember, great jobs are often available in much less costly areas if you look around enough. Always do the math. Never drive an hour a day for something as commonplace as a sub-$100,000 job.

          Reply
          • Meadow June 4, 2012, 11:02 pm

            Ah! I see. I wasn’t sure if the idea of having a short commute was not in effect in/near Manhattan.

            Both my boyfriend and I currently make just under $100k each (for now). I commute over an hour a day by train and he commutes 45 minutes by car, but we are moving into Manhattan to a frugal apartment which is just minutes from my workplace, and he can ride his bike to work easily. We could virtually eliminate our transportation expenses which are currently eating up $500-1500 a month in train tickets, car insurance and gas.

            He’s unfortunately tied to the city (city job with pension) for the next 13 years, so based on your advice, our plan should be to save a shitload of money up for the next 13 years (and either me “retire” much earlier than him or we both retire at around 43-45). Even if we stay put, we might be able to retire here if we live as frugally as possible. Even here in NYC, the major costs are transportation and housing and once we no longer need to commute and our potential house is paid off, huge expenses will be gone but high part-time salaries could still be tapped if needed.

            Just thinking out loud. Thanks for the late night advice!! I gasped out loud when I realized that MMM himself had responded to my comment! We are totally on board with this ER plan.

            Reply
    • Izak June 29, 2014, 1:38 pm

      Years ago when we bought our first house, we eventually ended up buying 20km away (in the next town) because real estate costs about double per square meter in the town where we worked. I remember my response was: for the difference, I can buy a car and two years of fuel.

      One big problem, unfortunately, is you never know where you’re going to work next. But this actually turned out okay for me. Four years ago something bad happened, which turned out to be a blessing in disguise: I lost my job. I was in the middle of buying a new house and there was no cash-cushion… so I called up all my friends, got enough work to do and about a month later I started calling back companies to cancel scheduled job interviews. I had accidentally started my own business. I now live zero km from work. We’re moving the kids to schools closer to home. I fill the car’s tank once a month, and it will last many more years. It’s a Diesel… downside, it’s actually more expensive than a Petrol because it does not save enough fuel to compensate for service costs. Upside: They are generally good up to half a million kilometers, and I’m at 100 000km now, so 40 years left in it… :-)

      Reply
  • Chris November 19, 2011, 8:36 pm

    Just found this blog and I have to say I am enjoying it! However, I have a quick comment about the example that you use in this post. Your example seems to assume that you can replace the time you are commuting with hourly work that pays at the rate of $22/hr. But that is often not the case. I agree that people should value their time when trying to decide whether or not to live closer to work, but in the end, the savings you calculate in this post do not help with retiring early (unless of course if you can replace your commuting time with paid work).

    Reply
    • MMM November 20, 2011, 7:37 am

      I think your time after work is even more valuable than your time at work! See the later domestic outsourcing, the health=wealth, and the self employment articles for ideas on why.

      Reply
  • Chris November 19, 2011, 8:37 pm

    Forgot to mark the “notify me” box. Hope the discussion continues!

    Reply
  • John June 26, 2012, 4:49 am

    Hi mmm

    I am really enjoying your blog… I am also a DIYer and solved the material hauling problem with a $200.00 4 by 8 foot utility trailer from harbor freight. I drive a 9 year old accord sedan with a trailer hitch. The trailer costs less than 30.00 to register and insure each year and it carries everything (drywall, plywood, insulation, core aerator, mowers, trees, etc.). It folds up vertically in the garage, taking up less than 2 feet of floor space. It is a far better solution than a 15 mpg pickup or suv….

    Thanks for the inspiring website

    John

    Reply
    • Mr. Money Mustache June 27, 2012, 2:58 pm

      Kick Ass, John! I am glad to hear the reassuring tale of trailer ownership. I mentioned the idea in this later article: http://www.mrmoneymustache.com/2011/12/08/turning-a-little-car-into-a-big-one/ but I have never owned a trailer myself yet. Sometimes I toy with the idea of selling my construction minivan and Scion Xa, and going to a single 2005 Prius with a trailer hitch. But with registration/insurance costs negligible in my area, and gas prices still fairly low, the numbers don’t quite justify it – especially since the van doubles as a hotel occasionally :-)

      Reply
      • Gerard January 11, 2013, 10:17 am

        Are you saying you wouldn’t sleep in a 4×8 utility trailer?

        Reply
      • Allen May 23, 2013, 6:33 pm

        Actual ‘hotel prius’ is surprisingly workable. I often sleep in my prius when I go to referee a Judo tournament. I use the prius as a hotel, wake up in the walmart parking lot, brush teeth/rinse off/change into referee outfit, do my thing and then drive home. It saves me literally $100+ every time I do it. The low cost of driving the prius to events saves as well.

        Also, if you want to be a wuss in cold or hot temperatures, you can run the Prius A/C or Heating all night long for very little gas as the engine only pops on to charge the battery. Sure, you could also tough out the weather, but if you don’t want to and don’t want it to fog up inside, it’s a MINOR marginal cost and a major savings vs a real hotel.

        http://cheapgreenrvliving.com/priusliving.html
        That was the website that motivated.

        Reply
  • The Perpetual Student July 14, 2012, 12:32 am

    Holy Moly, Mr. MM, it would be great to share your posts and great writing with my counterpart, the Professional Musician.

    We live where we live because it’s halfway for us. As a pro musician, he commutes all over our fine state of CO, teaching as far south as Castle Rock (!) once a week when we live in Longmont. I take classes and work in Fort Collins, but with my student pass I can take the bus a lot and save gas $$ that way.

    I have barely any income at all, as a full-time student, and the Pro Musician makes not so much either. I want to grow a big ol’ ‘stash but it’ll be a challenge, as I’m going to start professional school this coming year (with luck) and will be racking up a monster amount of student debt.

    I’d love to live close or bike or something, but the Pro can’t bike his drum kit up and down the front range. What to do?

    Reply
  • Teacher Mom December 16, 2012, 9:13 pm

    I’m starting at the beginning and reading through your blog tonight. My husband has a stressful job with a long commute (2 hours in the car per day, 5 days per week). Company provides the vehicle/gas (but only for 2 more years, then back to personal vehicle). A similar job in the same field and closer to home is currently available. He could walk, but would earn less and it seems like there would be less job security (subjective assessment, there). We are very tempted by the job change, but talk ourselves out of it because he gives up a pension if he leaves his current job. His pension allows him to retire in 15 years (at age 50) at the salary he will be making when he retires (probably around $85k). No pension with this other job opportunity. Is there any chance that changing jobs so that he can walk to work and generally have the flexibility that goes along with working near home would be a better alternative than the long commute with a higher salary and a pension? How would we figure it out?

    Reply
    • Mr. Money Mustache December 16, 2012, 11:54 pm

      Oh my goodness! Tell him to switch jobs tomorrow and never look back. Where we’re going, we don’t need ‘pensions’, and we retire well before 50! Read the later post called ‘the true cost of commuting’ (you can google that phrase).

      Reply
      • chrism January 19, 2014, 11:48 pm

        MMM

        I (43yrs old) live about 30 minutes North of Seattle. I currently work from home but only make approx $45 gross a year. My wife (45 yrs old) is a school teacher of 20 yrs and has about $120K in retirement. I only have $10K. We are debt free except for $300k mortgage. We have two kids, a 7th grader and 4th grader. She makes approx $62K gross. We do have approx $1,300/mo extra a month. I do love my job as I get to see my kids in the morning and I’m there when they get home at 4pm. I don’t get any benefits with my current job. I dilemma is I could change jobs (same industry) and possibly make as much as $20-$30k more a year with full benefits and take a bus to work which would be about 45min commute. What would you suggest?

        Reply
      • des February 1, 2014, 7:11 am

        I could tend to agree with you, especially if the job is stressful and he is not happy, but man giving up 85% of your salary for life would be hard, especially with only 15 years to go. I’d rather look to see if there are opportunities to find another department to work in (with less stress), even if it meant a little less pay.

        Also, it would depend on how much they had already saved on their own, but I’m guessing not much. I’d have to see the math, but it would mean they’d have to do a lot of hard core saving on their own which they probably haven’t been doing, so it’s even harder to achieve.

        Reply
  • Bean February 12, 2014, 7:06 pm

    My work is in an industrial area. The closest neighborhood is super ghetto. I just can’t bring myself to raising my kids in that area. Can I be forgiven for driving 30 min to work so my kids can grow up in a decent hood?

    Reply
    • Mr. Money Mustache February 13, 2014, 11:01 pm

      Sure, if that were really the only option, driving would be better than having kids grow up in a genuinely bad area.

      But I bet if you start looking around and considering all jobs, cities, neighborhoods, transportation options, cars, and houses, you might come up with a better situation than whatever you have now.

      It’s all about not closing the door on constant improvement. You’re stuck with a huge car commute FOR NOW.. but not forever unless you decide it is so.

      Reply
  • jenmalli April 22, 2014, 7:25 pm

    Obsessed with you blog, MMM, and would love your help. In my former life as a financial idiot I bought a certified pre-owned 2007 car with a 3.84% interest rate, totally on credit. I currently owe $17500, but the blue-book value is only about $11,000. It’s an excellent Volvo with only 50,000 miles, so I’m thinking I should try to pay it off quickly and then drive it rarely so it will last forever. But does it make more sense to sell it at a loss and buy a cheaper car? It gets terrible gas mileage (16 miles/gallon) and will eventually probably require expensive repairs… Thanks for any advice!

    Reply
    • Mr. Money Mustache April 23, 2014, 6:23 am

      Yeah! I’d sell that behemoth whenever you can. Hopefully you will get more than bluebook due to the lower miles. But at 16mpg you are more than doubling your fuel bill over any reasonable car. That will make a big difference as you try to move ahead with your finances.

      Reply
      • jenmalli April 23, 2014, 12:16 pm

        Awesome! I feel freer already.

        Reply
  • Amazing Alice May 13, 2014, 3:12 pm

    Hi Mister MM. I posted somewhere earlier, but forgot to tick the notify me boxes, sorry I going to ask again. What is your view on loans? I only have one buisness loan of $30,000 and we own every thing else. We have two buisnesses and are asset rich, cash poor. The loan in killing us and I find is near impossible to save and pay the loan. Should I really focus on the loan first and then save? Thanks

    Reply
  • DB August 2, 2014, 9:53 am

    Hi Mr MMM,
    I love your blog! I wish I had found it years ago. I found it by mistake, but glad I did. I have this dilemma. I commute an hour to work (I live in the Los Angeles area). My rent is $1,400 and to rent closer to work would be $2,100. I make approx. $150K. I was considering buying property near the workplace, but decided that did not make sense, as I don’t know if I will stay at this job and want option to leave job easily. Homes (condo/townhomes) in the area close to work cost approx. $400 -450K and SFRs cost north of $500K. What would you recommend? I am single as well. Thank you!

    Reply
    • Mr. Money Mustache August 2, 2014, 5:32 pm

      Sounds like you could pay $700/month to save yourself about $800/month in direct commuting-related costs AND reclaim about 40 hours per month of your life, not to mention increased health and drastically reduced odds of dying in a fiery metal tomb. BEST BARGAIN OF A LIFETIME!! MAKE THE MOVE IMMEDIATELY!!!

      Reply
  • Cassie August 16, 2014, 12:53 pm

    Hi MMM,

    My husband and I are in a pretty bad situation. Though we are able to pay all of our bills on time, we are definitely on the treadmill. We have significant student loan debt as well as one whopping credit card balance. Recently my husband took a new, better job, but it is farther away—about 25 miles. Though we would save a lot of money moving closer to his work and biking, the houses in that area are more expensive than the one we currently live in. What is the better decision: (1) take the higher mortgage but save by biking to work, or (2) stay where you are and bike to work for 2 hours one-way? How does the math work in this case? I would bet you have a solution that I just haven’t thought of!

    Thanks so much,
    Cassie

    Reply
    • Mr. Money Mustache August 19, 2014, 9:51 am

      In general, you’ll probably save by moving closer to work. 25 miles each way adds to about $12,500/year in driving costs, so you could pay $1000/more in rent per month and still come out ahead. Plus, you get your time back which is worth even more than money. That might allow you to sell your car too, at least until the debts are paid off!

      Reply
  • Damian October 1, 2014, 3:06 am

    So, what about a situation like Melbourne, Australia, where we save approximately $3472 in mortgage payments per month by living 37km from the city in a 4 bedroom house rather than 15km from the city in a run down Terrace?. You don’t seem to have considered public transport as a valid way to get to work, and $2/mile in incremental driving cost given US petrol prices doesn’t seem to make sense? Your income also strikes me as very difficult to live on in Australia with with staple food prices ($5US for a loaf of bread), a rough minimum of $16PA to rent a small 2 bedroom flat within the range of public transport, very low cost goods is somewhat of an American phenomenon. …

    Reply

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