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How to Choose Between a Shorter Commute or Cheaper Home

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Photo: Jeff Turner

No matter what big city you call home, you probably face a dilemma when choosing where to live: Should you live closer to work, with a shorter commute but higher housing costs, or live a long drive away with cheaper options. While the decision is ultimately you and your family’s alone, consider these pointers when weighing your options.

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Public transportation options

Before you break out the calculators, look at the transportation options for each area you’re considering living in. If you pay more by living in town, could you save money by ditching your car and using public transportation? If you live further away, is there a bus or rail system you could also use to trim down on your time in transit? We might always think of commutes as time in the car, but perhaps you could save time or money on other transport.

Look at the numbers

It’s easy to be swayed by lower housing costs, but you can’t forget that all time is money. Beyond that, you need to consider how much sitting in traffic and extra miles costs you in gas and wear-and-tear on your car. To see how much each commute option costs you, The Ascent from The Motley Fool offers this equation:

Determine the value of an hour of your time. The simplest method is to use your hourly wage, but you may want to go with a higher rate.

Multiply that rate by the number of hours you’ll spend commuting per day.

If you’ll be driving, multiply the number of miles you’ll be commuting by $0.58, which is the IRS’s standard mileage rate for deductible wear and tear as of 2019.

Add those time and mileage rates together, and then multiply that by the approximate number of days you work per year.

The Ascent

Close to services

The pure numbers should be part of your consideration, but don’t forget qualitative data that you can’t measure. If you live in the heart of the city, is there a better quality of life that justifies that higher cost? The Simple Dollar points out that lower crime rates and quality schools might be worth the higher rent or mortgage payments. City centers might also provide more convenient access to cultural experiences you value for your family.

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Stress on your family

When you’re thinking about signing up for a longer commute or sucking it up to live closer to work, you also need to think of the effect it will have on your family. If you have kids, a long commute might make cut down on how much you can participate in their lives and help a spouse co-parent. On the other hand, living in town could put stress on your finances and make saving or having fun more difficult.

Ultimately, choosing whether to live closer to work or further away in more affordable housing is up to you, your partner, and your children. Just make sure you have all the facts before you jump in either direction.

News Source: My Money Blog, The Simple Dollar, The Ascent