Do you mumble to yourself every time you have to fill up your gas tank or agonize over what a public transportation fare hike means to your budget?
If you do, it’s not surprising. Transportation is the second largest expense Americans have every year. According to the website howmuch.net and the federal Bureau of Labor Statistics, the average American makes about $76,000 per year.
Of that total, we spend the most on housing with about $18,000 (about 32 percent) being paid in rent or mortgages every year. That shouldn’t be too surprising.
However, have you ever calculated what percentage of your paycheck goes to transportation costs? That could be a shocker.
It turns out, on average, transportation is our No. 2 overall expense. It takes up an average of 15.8 percent of income, or about $9,000 in costs each year.
You might be able to trim food or entertainment costs, but you have great options to cut costs for transportation if you are a commuter.
Commuting can hit you hard in the in the wallet. The average commuter spends $2,600 per year in commuting costs, according to the CitiThank You Premier Commuter Index.
Commuter benefits: Your way to lower your costs with transportation
If your company offers commuter benefits, you set aside pre-tax money to pay for the benefits. Commuters can save up to 40 percent on commuting costs every year with commuter benefits.
Commuter benefits extend beyond just subway riders. Commuters use them for other public transit like trains, ferries and buses, vanpool, and rideshare (Lyft Shared, Uber Pool). The benefit also applies to drivers who can apply towards parking costs.
It also works out for your employer. With less taxable income, employers pay less in payroll taxes. Employers save on average about 7.65 percent in payroll taxes. If your company doesn’t offer commuter benefits, it’s a great idea to suggest.
If you don’t have commuter benefits in your workplace, it doesn’t hurt to start a conversation. Let your employer know you want commuter benefits here.
You can download our “5 Steps to Starting a Commuter Benefits Program” download to share with your company’s management. This guide includes the questions you’ll need to answer and steps you need to take to get your program going in the right direction.