Is the Drive to Work Worth it Every Morning for little Joe?
Is the Drive to Work Worth it Every Morning for little Joe? by Dr. John E. Ware, I
Little Joe drives 100 miles round-trip (50 miles to work and 50 miles home) each day, five days per week. Vehicle holds 15 gallons and gets approximately 17 miles per gallon (mpg). For the purpose of this illustration, we will assume fuel prices are $3 per gallon, gross pay is $500, and net pay after deductions is $300.
Little Joe met with the Accounting Kid to help compute his fuel costs. Here is what the Kid came up with:
It will cost $45 for a full tank of gas ($3 per gallon x 15 gallon tank).
Full tank yields approximately 255 miles (17 mpg x 15 gallons = 255 miles).
Cost per mile is 18 cents (rounded up)
($45 ÷ 255 miles = 17.6 cents per mile).
Weekly miles driven to and from work is 500 miles (100 miles round-trip x 5 days per week = 500 miles per week).
Fuel cost per week is $90 (500 miles per week x 18 cents per mile = $90 fuel cost per week), accounting for 30% of the take home pay ($90 fuel cost per week ÷ $300 net pay = 30%)
$300 (100%) net pay - $90 (30%) weekly fuel cost = $210 (70%)
Is little Joe's drive to work worth it every morning? Should little Joe quit? What other factors should be considered? How can little Joe retain more than 70% of his net pay?
Little Joe drives 100 miles round-trip (50 miles to work and 50 miles home) each day, five days per week. Vehicle holds 15 gallons and gets approximately 17 miles per gallon (mpg). For the purpose of this illustration, we will assume fuel prices are $3 per gallon, gross pay is $500, and net pay after deductions is $300.
Image Source: Wikimedia Commons
It will cost $45 for a full tank of gas ($3 per gallon x 15 gallon tank).
Full tank yields approximately 255 miles (17 mpg x 15 gallons = 255 miles).
Cost per mile is 18 cents (rounded up)
($45 ÷ 255 miles = 17.6 cents per mile).
Weekly miles driven to and from work is 500 miles (100 miles round-trip x 5 days per week = 500 miles per week).
Fuel cost per week is $90 (500 miles per week x 18 cents per mile = $90 fuel cost per week), accounting for 30% of the take home pay ($90 fuel cost per week ÷ $300 net pay = 30%)
$300 (100%) net pay - $90 (30%) weekly fuel cost = $210 (70%)
Is little Joe's drive to work worth it every morning? Should little Joe quit? What other factors should be considered? How can little Joe retain more than 70% of his net pay?
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