One of the primary reasons people decide to bike to work or around town is to save money. The savings can add up to significant amounts, especially if the only alternatives are train, bus, or gas-guzzling car commutes.
But exactly how much money can you realistically save by biking?
I’ve personally saved over $20,000 in the last 5 years just from biking more and driving less, especially to my NYC job from New Jersey and around town with my kids (in bike trailers).
This article will give you a realistic calculation of how much money you will save from bike commuting.
How much money can you save by biking more and driving less?
According to the popular finance blogger Mr. Money Mustache, you can save up to $93,432 over a 10-year period just by biking instead of driving. This estimate is based on a savings rate of 50 cents (USD) per mile biked instead of driven. The cost savings come in the form of gas, car deprecation, maintenance, health improvements, increased productivity, and other associated benefits of biking.
$93,432 might sound like a lot of money from just biking around! That total includes many hidden benefits of biking over driving that we don’t think usually think about.
With Mr. Money Mustache’s estimates as our benchmark, the rest of this article will focus on breaking down exactly how much you can save through biking.
I have personally saved over $20,000 in the last 5 years from biking instead of driving or taking a bus or train. I’ll outline these calculations in detail below.
If you are commuting to work by bus or train, then the savings are even more significant, and you can just add your own calculations into the equation.
Here’s a helpful video I made that breaks down Mr. Money Mustache’s estimates in detail.
How to save $93,432 in 10 years by biking
Mr. Money Mustache (MMM) estimates that you will save 50 cents (USD) per mile by riding a bike instead of driving. The cost savings come in the form of gas, car deprecation, and maintenance.
If following MMM’s advice to make biking a lifestyle choice, the savings on just gas alone add up to be over $10,000 in a period of 10 years.
He states, “From this savings alone, doing a couple of bike errands per day (4 miles) in place of car errands will add up to $10,752 over ten years.”
But the savings don’t stop there.
The grand total of savings from making biking part of your daily life for 10 years adds up to a shocking amount: $93,432 in 10 years just from biking!
That $93,432 might seem like a lot for just biking around, but the math checks out for the average American consumer, and I’ve even seen very similar results in my own life (explained below). The estimated $93,432 is reached by adding up all of the savings from gas, insurance, health costs, added productivity, and other associated savings.
That number seems absurdly high, so let’s break down the math.
1. $10,752 comes from savings in gas
This amount assumes a savings rate of 50 cents (USD) per mile biked, and an average of 4 miles per day. That would equate to 1,460 miles over 365 days per year. Or 14,600 miles over 10 years.
14,600 miles x 50 cents = $7,300
MMM then adds in the associated deprecation of the car, wear and tear, and maintenance required to a grand total of just over $10,000.
2. $30,000 comes from savings in not buying unnecessarily expensive cars
With a newfound preference to take the bike instead of driving around in a flashy car, MMM adds in the savings made from downgrading an unnecessarily expensive car (that won’t be used much anymore) to a used, fuel-efficient car. For a typical American’s spending on a car, that could easily equate to $30,000 or more per decade in savings.
3. $7,680 comes from replacing costly leisure activities with free bike rides
Again, MMM is considering the fact that the average American consumer spends a significant amount per month on paid leisure. His overall argument throughout his blog is that spending more money does not equate to more happiness. On the contrary, it’s the free things that are generally healthier and subsequently add to our savings, such as going on a leisure bike trip.
4. $37,500 comes from increased productivity
MMM’s main point with regards to health and productivity is that biking makes you more focused and gives you more energy, which in turn will increase your income.
It’s pretty much common knowledge that exercise boosts your productivity and energy throughout the day. For me personally, I did see a HUGE increase in energy and focus on work when I was biking to my job in NYC from New Jersey. For the first few weeks of biking to work, you will experience a slight dip in energy because your body is not yet used to the new exercise routine. But after just a few weeks, your body adjusts and you start to gain more energy and productivity from biking.
As an entrepreneur myself, I can’t deny that having more energy does help my businesses thrive and helps me make more money.
5. $7,500 comes from health care savings
MMM estimates an immediate return of around $500 per year in savings from doctor visits, medical expenses, and prescription drugs.
But is that an accurate assessment of health care savings from biking? I actually think that is a LOW estimate when you consider the fact that having a daily biking habit for an extended period of time will have a seriously good impact on your health long into the future. The savings become even larger well into the future IF you maintain a lifestyle of biking instead of driving.
In total, that’s $93,432:
- $10,752 = gas savings
- $30,000 = fancy savings
- $7,680 = leusure activity savings
- $37,500 = increased productivity
- $7,500 = health care savings
How I saved $10,400 in two years just with biking to work
After binge-reading Mr. Money Mustache’s blog in 2016, I immediately bought a road bike and started biking to my job in NYC from New Jersey every day for the next 2 years (even through the brutal NYC winters). It was a 26-mile round trip from Palisades Park, NJ to Manhattan, NY every day through brutal snow, heavy rain, and blistering heat. And after 2 years, I was able to save up a total of $10,400 just from not taking the bus or train (which costs $20 round trip).
The timing was also perfect for me since at the time I was just diagnosed with hyperthyroidism, which meant my thyroid was overactive and my heart was pumping blood way too fast. That scared me to death, so you can imagine I took MMM’s advice on biking for wealth and health benefits seriously.
But the real beauty is what that $10,000 is doing for me right now. Since leaving my NYC job in 2018, those savings have grown to be around $13,600. What’s even more exciting is what will happen to that fund in the next 10 years. In 10 years from now, my biking fund will be worth $38,616. And that assumes I won’t be adding to it at all.
And what about my health? How did biking for 2 years affect my thyroid issue and heart rate problem? Well, I started biking with an overactive thyroid and a resting heart rate of 80 beats/minute. Now, after just 2 years of biking to work and taking no medication, my thyroid levels are completely normal and my resting heart rate is around 45 beats/minute. That’s a drastic change that even I was surprised by when I went back to the doctor for a check-up.
The simple conclusion is that biking positively affects the most important areas of your life.
Where to invest the money saved through biking
Saving money through biking is only half the equation. The other half is figuring out exactly where to invest those savings to let it grow into a sizable early retirement nest egg.
Mr. Money Mustache is a believer in simple passive investing through index funds. He has consistently advised readers to simply buy low-cost index funds from Vanguard. MMM himself even invests his chunks of extra cash into index funds. After selling his house for $400k, he invested 80% of that windfall into Vanguard’s index funds.
He states in his self-introduction, “my own retirement income comes from a dead-simple asset allocation: a bunch of index funds at Vanguard and Betterment which pay quarterly dividends.”
Now let’s get back to the above estimate of how much you can save by biking daily as a lifestyle. If you invested that $93,432 over a period of 10 more years, how much will it be worth? What about 20 years? And 30 years?
Here’s a breakdown of how much biking for 10 years instead of taking the car will add to your net worth.
Note: the VTSAX Index Fund has a 5-year average return of 11%.
- After 10 years invested = $265,293
- After 20 years invested = $753,278
- After 30 years invested = $2,138,873
These numbers are incredible for just biking for 10 years and then just letting the savings grow in an index fund! And we’re not even accounting for a continued lifestyle of choosing to bike instead of drive. Chances are you will continue to take the bike over the car well beyond just 10 years. The wealth generation is exponential.
You can do your own math using any online compound interest calculator.
My only criticism of MMM’s biking savings estimates
In general, I agree wholeheartedly with MMM’s analysis of the true cost of driving and the tremendous savings made by biking. As I mentioned above, I have actually saved well over $10,000 with bikes in just 2 years. However, there is one thing that kept coming to mind when I was writing this review:
These savings estimates are accurate for the average consumer, but not really for people who already have some common sense.
This is not a criticism of MMM, but rather an observation.
In other words, people who tend to read MMM’s blog already don’t have typical spending habits on expensive cars, vacations, leisure activities, and unhealthy habits. Therefore, the savings a typical MMM reader will have will likely not add up to $93,432 per decade.
For that reason, I’m writing my own personal savings through biking on this blog for the sake of showcasing exactly how much (and more) a Mustachian lifestyle can save you by just biking more than driving.
In my case, I’ve saved and invested well over $10,000 in 2 years in just transportation costs. That doesn’t even account for the health benefits, my thyroid issue being fixed, my heart becoming super-efficient, and the amount of productivity and energy biking has given me.
If I were to give a conservative estimate on how much biking has directly saved me over 5 years, I would say at least $20,000, PLUS the investment returns on that money, PLUS the tax savings on that money invested in retirement accounts.
In conclusion, a typical consumer will be able to save around $100,000 per decade through making biking a daily habit. For the average MMM reader with common sense, they can expect to save around $50,000 per decade.
My Recommended Gear for Year-Round Cycling on a Budget
It took me years of trial and error to figure out the best and most affordable setup for my daily bike commuting. I would only recommend the gear that is good quality for a good price. Here’s my full year-round gear recommendation guide.
Want to know how much your cycling gear should cost? Check out my guide with different budget options here.
Ride on!
Referenced Articles by Mr. Money Mustache
Get Rich With… Bikes
This article is one of MMM’s finest pieces of work. It outlines the mathematical reasoning behind riding bikes as a viable wealth-generating activity. There are several monetary benefits mentioned in this article that you probably haven’t thought much about. His conclusion is that replacing daily car commutes with biking is estimated to save you around $93,432 per decade. Check out the article to see why!
Bicycling: The SAFEST Form of Transportation
This article is what pushed me over the edge to actually get a bike and start commuting to my job in NYC from New Jersey. I thought it was just too dangerous, but after reading the solid considerations in this article, I bought my first road bike and never looked back.
What Do You Mean “You Don’t Have a Bike”?!
Another classic by MMM, this article pokes fun in the traditional Mustachian manner at anyone who won’t consider getting a bike for whatever reason. A really good article to send to any of your friends who aren’t yet into biking!
How To Ride Your Bike All Winter – And Love it
A must-read for anyone planning on winter riding. Well, really this article is for anyone who lives in the colder parts of the world.
I managed to bike through the snowy winters of NYC with a normal bike and all the right gear. Check out my winter riding guide and gear recommendations here.
MMM Challenge: Try Getting Your Groceries with a Bike Trailer
MMM is an advocate for bike trailers to get around with kids and tow heavy items, especially when grocery shopping.
This article challenges readers to start getting groceries with bike trailers.
If you need help figuring out bike trailers, I made a helpful guide just for you.
The Shockingly Simple Math Behind Early Retirement
This one of the most important articles on the MMM blog. It’s where he shares exactly what it will take to reach financial independence and retire early. Not only that, it lays out a surprisingly feasible path to early retirement within just a decade or so.
How to make Money in the Stock Market
This article covers everything you need to know about where to invest the money saved through biking. It’s an in-depth analysis of the stock market and why it’s a good idea to invest in index funds in the long-run.
We Sold the House! Here’s How I’m Investing the $400,000.
Here’s a glimpse into what MMM himself would do with a $400,000 windfall. Hint: 80% of it goes into Vanguard index funds!
How to Carry a Big Wallet and Leave a Small Footprint
This is the article I referred to above about the wasteful nature of driving as opposed to biking. It goes deep into just how efficient biking can be when we decide to make it a lifestyle choice.