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It can be difficult to find good news these days with the Coronavirus pandemic going on. Lot’s of people are getting sick (even healthy ones) and many are dying from this virus. It is absolutely no joke.
So it can be easy to get sucked into all the bad news going around. I know that I have certainly spent too much time on social media and following the news coverage of this pandemic. It can get tiring and stressful.
Instead of talking about all the negative going on in this world right now … I’ve been trying to focus my content and writing around positives. For example, I recently discussed 20 things you can focus on now in a pandemic.
I also discussed my plan for selling dividend stocks … if the time comes when companies we own start cutting dividends. Then I talked about our strategy for investing in my workplace retirement accounts.
Today I would like to discuss another silver lining to this pandemic … a likely reduction in transportation expenses this year.
As many of us already know … transportation is one of the big 3 expenses for most households in addition to food and housing.
A few weeks ago … I wrote about how we lowered our transportation expenses last year (2019) compared to the previous year (2018). And how we will try and continue that trend in 2020.
Well this post is a bit of an addendum to that post … as I believe our 2020 transportation expenses will be even lower due to the Coronavirus outbreak.
But before we talk about this years transportation costs … let’s first take a look at what we paid in transportation the past couple of years.
Historical Snapshot of Transportation Expenses
We have been tracking our transportation expenses now since 2017. So we have 3 full years of data to work with.
In 2019 … we spent an average of $893.45 per month on transportation. Last year … that total amount of transportation expenses made up 17.7% of our annual spending.
A year earlier in 2018 … we spent an average of $1,031.99 per month on transportation. In 2018 … the total amount of transportation expenses made up 20.6% of our annual spending.
Two years earlier in 2017 … we spent an average of $1,050.34 per month on transportation. In 2017 … the total amount of transportation expenses made up 21.0% of our annual spending.
As you can see … there has been a downward trend for the past 3 years.
Next, lets take a look at why we think our 2020 expenses will be lower than what we originally planned.
Why Our Estimated Transportation Expenses Will Decrease this Year
First I’d like to point out that I’m not saying our transportation expenses in 2020 will be lower than 2019.
For example … we planned on purchasing a 3rd car this year for our oldest son who is now 16. Not only will this increase our expenses (we plan to buy a used car), but our car insurance will increase as well.
We likely will still purchase another vehicle for our son … but we are holding off for now. Since we are hardly driving our 2 vehicles now … there is zero incentive to buy that 3rd car at this point.
Plus … the longer we wait … we can continue to save on car insurance. We have our son added to our policy, but our rates won’t really jump until we add that 3rd car. More incentive to wait.
And … who knows … we may be able to get a good deal on a used vehicle if the economy continues to stumble.
Here are a few other reasons why our transportation expenses will be lower this year than we expected due to the Coronavirus –
- Telework – I will be teleworking for at least 2 full months which saves on transportation
- eLearning – Our kids will be doing eLearning for the remainder of the year … which means less driving
- Less Gas – I figure we may fill up our vehicles once a month for the next several months … if that
- Cheaper Gas – Gas is considerably cheaper now … when we do fill up
- Less Maintenance – We will be driving a lot less miles … so required maintenance will be way less
- Better Condition – Overall we will keep both of our current vehicles in much better condition now with less miles
Let’s finish by looking at a recap of our 2020 transportation expenses and where we think they will drop.
Transportation Costs – Remainder of 2020
To look at our transportation expenses for 2020, we need to first revisit our 2019 costs.
Here is a quick breakdown of what we spent in 2019 on transportation –
- Car Loan #1 – $2,559.96
- Car Loan #2 – $2,951.64
- Gas – $2,897.98
- Insurance – $850.61
- Maintenance – $952.33
- Registration – $508.89
With the Coronavirus pandemic … I can already predict several of our 2020 transportation expenses will decrease for the remainder of this year.
I have already established that we’ve paid off car loan #1 in 2018 … so those costs have already went away in 2020. In addition, since we are still paying down car loan #2 (0% interest rate) … those expenses will remain the same in 2020 as the car won’t be paid of this year.
Next … registration will not likely change at all for 2020. Although we did prepay my car registration for this year back in 2019. So in reality our registration fee’s this year will be lower than last year but not as a result of the Coronavirus. Also keep in mind that buying a 3rd car this year will add some additional registration fee’s.
I have already stated in our previous roundup post that our insurance will be higher this year because we added our son to our policy. However, it likely won’t be as high as it could have been … if we continue to hold off on buying that 3rd car.
This brings us to the 2 transportation expenses that will certainly be cheaper (possibly a lot cheaper) than originally expected in 2020 –
We’ve been pretty much assured that our kids won’t physically go back to school this year. Since my wife drives two of our kids to school and picks them up each day … we will save a ton of miles and gas just from carpool.
In addition, I’ve been teleworking for the past 3 weeks and will continue for at least 4 more weeks. This will likely get extended even further. Considering I used to drive between 180 to 200 miles a week for work … this will help us save a ton on gas too.
Then there is maintenance …
Since we are driving a LOT less miles … we don’t need as many oil changes. And we wouldn’t likely need as much other maintenance. For example, our tires will last a bit longer.
Those are just a few of my thoughts on how we will save money on transportation expenses this year!
A Silver Lining of the Coronavirus Outbreak?
I don’t want to discount the illness and deaths that this pandemic has caused. I’m just trying to find any silver linings I can find in a really tough time.
This thing is very serious … and we all need to do our part to fix it.
That being said … I do see a silver lining when it comes to our family’s finances from everything that is going on.
One of the financial benefits that I see our family benefiting is a big savings on transportation costs. I plan to keep a track over the next few months to see how we are doing and if warranted … provide updated posts.
I’m sure there are plenty of other financial benefits to this economic downturn that I will cover in future posts.
What opportunities have you seen to help your personal finances during this economic downturn? Do you expect a reduction in your transportation spending?