A   Hidden Cost of Housing

If you work five days a week, 50 weeks a year, you travel 500 round-trip miles for every mile of distance between the place you live and the place you work. Say it costs 56 cents a mile to operate the typical automobile (including depreciation of the car itself). At this rate, every mile costs $280 a year, or $23 a month. This is not income tax deductible.

If you own your home and have a 30-year mortgage, every thousand dollars of house value costs about $9.50 a month for the mortgage, insurance, property tax and maintenance. Much of this is income tax deductible. Depending on your income and other deductions, the net-of-tax cost might be $7.50.

Therefore, for every mile closer to your work,

you can afford about $3,000 more house.

If your car costs 80 cents to operate, it works out to $4,000 more house you can afford for every mile you are closer to work.   If your car costs only 40 cents to operate, it still works out to over $2,000 more house you can afford. For every mile!

Click here to calculate your car milage

Don't overlook the total mileage if two people are commuting in separate cars.

Even more important are the intangibles . How would your life be different if your commuting time was reduced? More time for your family and friends? More time for your career? More time for your personal and spiritual growth? More time for tennis or golf or hobbies? Only you know!

This hidden cost applies, whether you rent or own. And mortgage lenders don’t take this into account when qualifying you for a loan.  But your life is more than just the cost of housing.  With wise planning, you will have more money for other enjoyable things in life.