Possibly the Biggest Money Saving Idea for City Employees!

As promised, here is the next post with the next big idea. How to save big money. Really big money. How big? How about $1,000? Would you believe $10,000? Well personally, I have saved all this and more. Can you guess what I'm talking about? Yes that's right, it's public transportation. Now, if you are already doing this then you are already saving the money and if you are not already doing this, I am sure it's because you need the car at work. Well, you need to re-think that idea carefully.

First, a little about costs. Just how much does it cost you to drive your car anyway? A good objective measure is to calculate how much it costs to drive a mile in your car. The calculation is not too hard, just add up all the costs of driving the car. I mean all of them, not just the gas. You buy tires, change the oil, pay for insurance, pay for repairs, oh, and you have to actually buy the car and probably pay interest on the loan. Add this all up and divide it by the miles you drive and you get a cost per mile. Now, before you go to all that work, consider this: the IRS has already done this for you. You know the IRS, known as the Infernal Internal Revenue Service. They are not known for giving you overly large deductions, so you can be sure that the amount that they allow for a business mileage deduction ($0.55 per mile) is not going to be overly generous. I have done the calculations and the $0.55 per mile pays for a simple Ford Ranger pick up truck and all the expenses of driving. This is what we pay in the City to employees who have to use their vehicle in the course of business. In fact, the unions convinced the City that this is not even enough, and so we pay our inspectors an additional $55 a month to supplement that IRS figure.

Now what about public transportation? Lets take the train for example. My current train pass costs $168 a month. My train trip is 27 miles, so in an average month, I travel 27(miles) x 2(times per day) x 19(days per month) or 1,026 miles on the train and connecting transportation. That equals about 16 cents per mile (1,026 /$168). I won't even get into the fact that I get $50 back from the City and my parking is free. Lets just say, 55 cents per mile car cost minus 16 cents per mile train cost equals 39 cents per mile savings x 1,026 miles traveled a month = $400 per month savings.... really!

Try multiplying that by 12 for the amount saved in a year, adding in the transit subsidy, adding in all the train friends and networking that takes place and you have quite a deal. There is nothing quite like having a hard day at work, getting on the train and running into one of your train friends to share the ride home. Quite the deal!

The savings math is even better with a van pool, however, you are on a fixed schedule. I personally like the trains because of the flexibility, and they are smoother, and you can stand up and walk around if you want to.

Oh, and about the car that you need downtown - there are lots of ways around that problem, such as checking out a car, getting a ride with friends, spouses, other public transportation, dial-a-ride, taxis, etc. You can pay for a lot of transportation with $400 a month.

So that's my big idea for the month. I hope you liked it.

The Talk

Now that I have this blog going, it's time to post a new item. This is an important step you need to take if the furloughs really happen and I am pretty certain that they will.You need to gather your family, significant other, girlfriend or whomever you are close to, and have a discussion about a change in finances to make sure they are on the same page. Say something like, "I will be getting furloughed starting in July and it will amount to about 10% of my pay. We will not have as much money to spend as we had before so we need to slow down our spending." Explain that you need to discuss your financial plans for the coming year and think of ways you can reduce. As you work this out with your loved ones, it will make it much easier to adjust to the new pay. That way you can avoid some of the tension that finances cause in a household. You might inadvertently forget to mention the probable 3% raise you should get in July and the 2.75% other raise that coalition MOU members will probably get in January. Of course we are not totally sure about all that, but it's best not to plan for it.

Next time: One of biggest money saving tips for working folks in LA.

Welcome to the Get Your Ten Percent Back Blog!

This blog is intended to help those City of LA employees who are now experiencing a 10% cut in pay due to furloughs. I thought it would be helpful to share ideas about saving money so that we could reduce the impact of the reduction in pay. I am sure that there are lots of ideas out there that will help and, maybe with a little effort, you can get back the whole thing.

To start with, here are seven ideas about getting your 10% back:

1. You probably got a 3% cost of living raise on July 1st, so the cut is not really 10% but in fact only 7%. See, we've already eliminated 30% of the pay cut!
2. You now have an great excuse not to spend money. You can say, "Sorry, I'm now taking furlough days and I can no longer afford it. This gives you the excuse to not spend money on things that you felt obligated to pay for but really didn't want to.
3. Cancel HBO, there's nothing good on anymore anyway. You might have even forgotten that you are paying $15 a month extra for it.
4. Many people pay a gardener to do their yard work and pay a gym to get exercise. Why don't you fire the gardener, mow your own lawn for exercise and cancel the gym membership?
5. Limit yourself to going out to eat no more than once a week.
6. No, this is not the time to buy that new car. There's no telling what the City will do when the deficit doubles in FY 10-11.
7. Because of the way tax rates work, your taxes should go down more than 10% for a 10% cut in pay.

Those are my ideas for the moment. There will be more later and I welcome your ideas as well. Also, feel free to comment on the City's financial picture or even ask questions about the City's financial situation. I would be happy to answer what I can as long as you realize that this blog is in no way official City of LA business.

Anyway, thanks for reading.

Larry