Finance Friday: 7 Reasons It Might Be Cheaper to Live Close to the Office

Is the rent (or your mortgage) too darn high? Do you ever think about moving farther away from work to take advantage of lower real estate values? Think again. That might not be as smart as it seems.

If you work downtown in a city where people love to live, property values are probably higher closer to the action, which means you'll pay more to live near where you work, whether you rent or own. And it can be tempting to add a commute to your day if it means a bigger yard, and extra bedroom (or three), or a walk-in closet.

But all of those things, which can add value to your property, might end up costing more than you think when you factor in the extra expenses of living close to work.

Before you decide to head for the wide open spaces of a subdivision or luxury apartment complex, ask yourself what the opportunity cost might be. Will you come out ahead, break even, or save? And what's it worth to you? Start with this list of expenses you might have to pay.

  1. Transportation. This is an obvious one. Depending on where you live, you may have to pay for a train or other public transportation. But will you need a car or bike to get to the station? If you'll be driving to work, remember that gas mileage and wear and tear on your car count. If you put a lot of miles on your car going back and forth to work, you'll need a newer car sooner, and you may pay more in repairs, from flat tires to timing belts. If you drive an older vehicle and your insurance doesn't cover rentals, think about what kind of transportation costs you'll pay if your car is in the shop for more than a day (or find a shop that's open on weekends).
  2. Pets. Will you have to pay someone to let your dog out in the middle of the day? Or will you need to use a vacation day to take your cat to the vet? If you work near where you live, you can always eat at your desk and use your lunch break to walk your dog. Bonus: Free exercise!
  3. Getting things done around the house. Got a plumbing problem? If you live nearby, you can have the plumber (or drywaller, or security system specialist, or electrician) call your cell and you can pop over to let her in to do the work. If you're farther away, you'll have to leave a key under the mat, count on a neighbor for help, or schedule service calls on weekends, which can be more expensive.
  4. Food. Even food costs can add up when you have a long commute to work. Faced with an hour trip, you might not want to cook by the time you make it home, and you definitely don't want to add a 30-minute detour to the grocery store. So you order pricey takeout because you need one red pepper to make the recipe you planned, and you're too tired to deal. And what about lunch? Forgot yours? You'll have to buy a meal because you won't be able to run home for a sandwich. When you get really desperate - or you're having a pity party and decide you deserve it - you'll get fast food. Which will make you feel a little sick because we all have the best intentions of getting something from the salad menu, but really? That would be easy to do if they didn't also offer cheeseburgers and fries. Is the commute worth the cost to your health?
  5. Physical and mental health. Getting sick and feeling bad costs money, in lost time at work, lower productivity, and trips to the doctor. If your commute is sucking the life out of you, or even just eating up the time you had for your daily walk, it could be costing more than you know.
  6. Lost time at work. Are you late because of public transportation interruptions or traffic? Your boss might be cool with it, especially if it's the norm in your town, but you may be missing the opportunity to shine at work. If you live nearby and can show up ready to go every morning, you might get promoted, and enjoy the raise that goes with it, sooner than you think! Also, if you like to oversleep, and you can embrace the tousled hair look, living close to where you work makes it easy to hit snooze. Living nearby makes you look like the go-getter you really wish you were!
  7. Time to do the things you want to do, and the things you have to do. If your commute is 45 minutes, an hour and a half a day, that's two and a half hours a week, 125 hours a year (if you factor in two weeks of vacation). That's a lot of socializing, exercising, reading, house cleaning, lawn clearing, and DIY time. Are you willing to forgo the fun ones and pay someone to do the others? 125 hours is a lot of time.

How much does your commute cost?