The True Cost of Living Further From Work to Save on Rent

Many people choose to live further from their workplace to save money on housing costs, especially in expensive urban areas. While this strategy can reduce your rent or mortgage payment on paper, the true financial picture is more complex when you factor in commuting costs, time expenditure, and quality-of-life impacts. Let's examine whether living further away to save on housing actually puts more money in your pocket.

The Housing Cost Savings

There's no denying that housing costs typically decrease as you move further from city centers. In many metro areas, you might save:

• 20-30% on rent by moving 15-20 miles out
• 40-50% on rent by moving 30+ miles out
• Even greater savings if you're comparing urban apartments to suburban houses

For example, a $2,500 downtown apartment might compare to a $1,600 apartment 20 miles out—a $900 monthly savings that seems compelling at first glance.

The Commuting Costs That Eat Into Savings

Now let's calculate the true cost of that longer commute:

Transportation Costs

Using the IRS mileage rate of $0.655 per mile (which includes gas, maintenance, and depreciation):

• 40-mile round trip × $0.655 = $26.20 per day
• $26.20 × 22 working days = $576.40 monthly

Time Costs

If your commute increases by 1 hour total per day (30 minutes each way):

• 1 hour × 22 days = 22 hours monthly
• If you value your time at $25/hour = $550 monthly opportunity cost

Additional Hidden Costs

• Higher insurance premiums for longer commutes
• More frequent car replacements due to higher mileage
• Increased eating out due to less time for meal prep
• Higher childcare costs if commute takes you away from family longer

In our example, the $900 housing savings is reduced by $576 in direct commuting costs and $550 in time costs—actually putting you $226 in the red each month before even accounting for the hidden costs.

Quality of Life Considerations

Beyond dollars, consider these factors:

Stress and Health

Long commutes correlate with:

• Higher stress levels
• Less time for exercise
• Poorer sleep habits
• Less time for social connections

Career Impacts

Being further from work may mean:

• Less likely to attend networking events
• Harder to participate in after-work activities
• More difficulty working late when needed
• Less visibility for promotions

When Living Further Out Makes Financial Sense

Despite these costs, living further away can be financially beneficial when:

• You have reliable, low-cost public transit options
• You can work remotely several days per week
• Your commute is against traffic (shorter travel times)
• You're moving to an area with significantly better schools (saving on private tuition)
• The housing cost difference is extremely substantial
• You genuinely prefer suburban/rural living

Alternative Strategies

Instead of automatically moving further out, consider:

1. Smaller, Closer Housing

A smaller apartment near work might cost the same as a larger one further out when you factor in commuting costs.

2. Roommates

Splitting a closer apartment might provide better net savings than living alone further out.

3. Different Neighborhoods

Look for less trendy areas that are still convenient—sometimes adjacent neighborhoods have significant price differences.

4. Negotiate Remote Work

Even 1-2 remote days per week dramatically reduces commuting costs.

How to Calculate Your Break-Even Distance

Follow this formula to determine when housing savings outweigh commuting costs:

1. Determine your potential housing savings (Current rent - Proposed rent)
2. Calculate new daily commute cost (Round trip miles × $0.655)
3. Multiply by working days (typically 22/month)
4. Add time cost (Extra commute hours × your hourly value)
5. Compare to housing savings

"A study by the Victoria Transport Policy Institute found that for every dollar saved on housing by moving further out, the average household spends $0.77 on increased transportation costs."

The decision to live further from work to save on housing is highly personal and depends on your specific circumstances. However, when you properly account for all costs—not just the monthly rent difference—many people find that the apparent savings disappear or even reverse. By running the numbers carefully and considering quality-of-life factors, you can make a housing decision that truly improves your financial situation rather than just appearing to on the surface.