8 Steps to Save Money by Buying Right!
Image sourced by David Vives @davidvives
Sometimes I have business meetings in New York City so I take the Metro North commuter railroad into the City.
I got in the habit of purchasing a one-way ticket each time I took the train to and from New York City. Who knows why. . .
I Dropped the ball because several months passed before I analyzed my commuting times against the cost of the tickets. Oops.
I Lost Money!
Metro North offers one way peak tickets and one way off-peak tickets; round trip tickets; ten trip tickets peak and off-peak; weekly and monthly rail passes and a few other varieties.
MTA (Metropolitan Transportation Authority) requires peak tickets during rush hour travel.
From my local train station to Grand Central Station, the fare is:
Peak Ticket:
One-way = $13.25
Ten trip = $132.50 or $13.25 per one-way ticket
Off-Peak Ticket:
One-way = $9.75
Ten trip = $83.00 or $8.30 per one-way ticket
Let’s analyze the various ticket offerings:
With the Off-Peak Ten-Trip Pass, the price per ticket (one way) is $8.30 ($83.00 divided by 10 trips).
In contrast, when you purchase an Off-Peak ticket One at a Time, the price is $9.75; $1.45 more.
With the Off-Peak Ten Trip Pass, You Save $14.50 ($9.75 minus $8.30 = $1.45 multiplied by 10 trips). And. . .
You save $14.50 Each Time You purchase the Off-Peak Ten Trip Pass !!!
The peak ten-trip pass costs $132.50. That equates to $13.25 per trip (one way; $132.50 divided by $13.25).
The cost of buying ten, one-way peak tickets ($132.50) and the cost of purchasing a ten-trip peak pass is $132.50 – exactly the same to the penny. In other words. . .
There’s NO savings by buying a peak ten-trip pass.
The point is that the cost of the per trip Peak Ten-Trip and the Peak One-Way Tickets are Exactly the Same: $13.25!
So there’s NO savings by buying a Peak Ten-Trip Pass. . .
Especially if you have credit card debt! You’ll pay high interest expense.
Even if you don’t have any credit card debt, you can probably find a better use for the money than giving it to Metro North, the Metropolitan Transportation Authority (MTA), I’m sure. Perhaps store the money in an interest-bearing savings account.
On the other hand, the cost of an Off-Peak One-Way Ticket when you purchase the Ten Pass is $8.30 per one way trip. So by buying the Off-Peak Ten Pass, you save $1.45 each time you take the train off peak.
I don’t track my commuting – train travel – every month, but I typically take seven or eight round trips every month. So I probably purchase one Ten-Pass every four or five weeks and Save approximately $174 per year ($14.50 multiplied by 12 months). Remember, it takes two one-way tickets to make a round trip.
And that’s in after-tax dollars!
By the way, with Metro North it’s worthwhile to purchase the Monthly Commuter Rail Pass when you take 11 or more round trips every month. Eleven (11) round trips is the breakeven point for a monthly commuter versus perhaps a weekly pass or daily tickets.
But of course, run the math based on Your usage habits. Which may change over time.
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Regarding commuting, to save even more money, check out your employee benefits package regarding TransitChek:
Under theTransitChek program, your employer deducts money from your paycheck pretax.
They issue you a debit card and load (fund) your debit card every pay period in an amount equal to the pretax payroll deductions you elect.
You reduce your taxable income and therefore your income taxes by the amount of your contributions – which could be 25% to 35% depending on your income tax rate.
You can use the debit card for commuting expenses only.
Examples include commuter rail, commuter parking and bus passes.
And you can still purchase the Ten Pass.
When I was eligible to participate in TransitChek, I saved $1,000s over the years.
Grab these 8 steps to save money:
Get a handle on your usage habits.
Learn the available service offerings and product offerings and the pricing. Take note of the expiration dates.
Analysis is typically the key to saving money.
Select the product offerings and service offerings that match your usage and offer the best pricing for you.
Monitor your usage.
Revisit your calculations and see if your original assumptions and expected usage match the cost of purchasing the item. Are you ahead of plan or behind plan? In other words, could you have spent less and saved more money?
Every so often, recheck the product offering, service offering and the pricing. Compare your current usage to the pricing plans. Are you still getting the best deal for yourself?
Modify your purchasing habits based on your new analysis to maximize your savings or optimize your savings!
.
See you on the train and at the bank.
Arthur VanDam
P.S. To Save More Money Every Day – click here.
Budget and Grow Rich® – ISSN: 2992-9296 – USA International Standard Serial Number (ISSN)
Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax, accounting or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!
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