The other day I helped out Nadia Smiley of Bike Bike Inc. with their pop-up store booth at the Calgary Baby & Tot Show and repeatedly answered peoples’ question: “How much does one of these cost?” and it made me think even more about this important aspect of attaining cargo bike ownership: personal finances.
I was recently interviewed on BikeTown Podcast by Greg Glatz and one of the questions he asked me was about how we afford cargo bikes because they are not cheap. I touched on it in the interview, how we prioritized it from a lifestyle point of view, but here I am to break it down further because raw numbers are easier to read than talk about.
Money can’t buy happiness
But, it sure can help get you to a state of cargo bike bliss.
As new parents initially looking at getting a bakfiets/long john-style cargo bike we scoffed at the price, wished we had saved up more prior to having a kid, and decided that a trailer — or possibly a basic longtail cargo bike — was our only option.
We found a used trailer on kijiji for a few hundred bucks. (We still have it, it’s 11 years old now and we’ve had it for over 6 of those years.)
Financially tight beginnings
I get the feeling of not being able to afford a cargo bike, let alone an electric cargo bike.
Our annual financial situation changed dramatically when we had our first kid:
- we moved to Calgary with an 8-day old baby;
- bought our first house (and it’s not new…);
- I went on EI (i.e. 55% of a pittance of a non-living wage non-profit sector level salary, about a $12k hit); and,
- my husband took a pay cut moving to the public sector (plus he was now forced to contribute to a pension plan, so his was a $20+k hit, albeit a good chunk should have long term benefits).
Reality set in pretty quickly but really hit home the next Christmas. EI had been over for a few months and we were realizing that our spending patterns had changed as costs were very different in Calgary (housing was similar for us, but food cost a lot more than our previous few years in Vancouver): we had to get serious about budgeting.
You need a budget
I need a budget, you need a budget. But, what we all really need is You Need a Budget.
YNAB (“why-nab”) and their philosophy of budgeting transformed us. The system made sense and we made it work, prioritizing non-negotiables like mortgage payments, saving for a new roof, appliances, and purchasing decent food. There wasn’t much left (if anything!) for other categories unless I was to go back to work; our booze budget was even a paltry $25/month for a long, long time (which pretty much meant we were dry), we had no personal spending money whatsoever for years. This opened up a dialogue on what we wanted to focus on in life: family, food, and bikes. It also motivated us to create space for these priorities; for example, as a full-time parent I find little need to spend money on clothes, there is no one to impress but myself, I get my hair cut once per year (maybe), and I’ve been cutting my husband’s hair for about 15 years.
People have a hard time believing that all the little costs add up, but they truly do. I entered our costs into a YNAB-styled spreadsheet every day for a long time to make sure that we were staying within our spending categories because we had little to no room for error at this point, having drained our cash reserves when we bought our first house. Eventually I moved to a bi-weekly system and now monthly.
This is our sixth year of budgeting this way and things really have added up and that is affording us more flexibility and freedom to pursue some dreams that seemed completely unattainable before. I have managed to not go back to work full-time at any point yet on this parenting journey (I have done a bit of part-time work in between kids, but haven’t received a formal pay cheque since kid number two). We have slowly crept back to our income-level pre-kids, I think, if not a bit more, which has helped immensely.
Time is money
As a full-time parent that could not be more true.
While I wish that I could claim at least $35k per year as wages paid for childcare costs on my husband’s taxes for some of my time, fact of the matter is I can’t make money looking after my kids, but I can save money.
Biking with my kids is one way that I save money. Lots and lots of it. I have the time to use active transportation to get around and each kilometre that I walk or bike saves me $0.54CAD: I self-propel myself (and my kids) on average 20 km per weekday, which translates to over $10/day, at least $50/week, or $200+/mth.
$200+ per month is a lot of money. It is for our single-income family, at least. My husband also rides to work almost every work day of the year, which saves us another $100+/month. None of these figures include the cost of parking.
That’s at least $3 600CAD per year for our family.
In two years that almost fully pays for a brand new electric assist super fancy Larry vs Harry eBullitt and it definitely buys you an amazing e-assist longtail.
These facts and figures do not even begin to address the money that we are saving the government in health care costs, alone, since cycle commuting has repeatedly been shown to provide huge benefits to physical health. Nor do they address the invaluable price of my personal health and well-being because cycling keeps my body moving and that is a very, very good thing. I struggle to find the time to go for a run, but if I manage to squeeze one in nowadays it is glorious icing on the cake, as I’m generally guaranteed at least a half hour’s solid exercise per day through active transportation (it’s usually more like 1-2 hours).
The money makes sense, but…
How do you get there? Fine, saving $3 600/year in family transportation costs is a lovely number on paper, but it is not cash in your hand so you still have to get ahead financially before you can buy the bike and really get ahead!
How do you reap those benefits if you are still stuck spending $0.54 per kilometre in your car? Maybe you:
- Have some savings you can tap into now that you see the numbers, it is a financially prudent decision, after all (not to mention good for your overall health and the environment).
- Are feeling brave enough to tap into retirement savings and take a hit there because you deem this to be a worthwhile move (I don’t whole-heartedly recommend this option as I think it is a slippery slope to tap into RRSPs or whatever long-term savings vehicle you’re using, but…).
- Have an employer is progressive and you have a health spending account that you can use for active living or they are flexible letting you spend other perks (like a gym membership) on a cargo bike, instead.
- Could start a program at your place of work that helps to support active transportation. For example, one reader wrote in to say her employer pays her $5 each day she comes to work without a single occupancy vehicle as this encourages alternative modes of transportation, resulting in reduced strain on parking requirements around her place of work. If you are in a large enough organization, perhaps you have a Green Team or similar group that would be the group to approach with such ideas.
- Could sell one of your two cars! Or even go car free!!!
- Could qualify for a financing option from your local bike shop, an option some LBSs offer (although I despise debt so don’t consider this an endorsement for your actions!).
- Are living paycheque-to-paycheque. This is pretty much where we were at so the way we saved was through budgeting, YNAB-style.
Slowly, but surely, things started to add up. Then I finally got a kijiji alert that there was a used cargo bike for sale in town for just over $1000 and we had pretty much saved that amount. So, with a little bit of “rolling with the punches” and “borrowing” from our other longterm savings categories (…who needs a completely new roof in 8 years anyway…), we made the move and bought our first cargo bike. This has allowed us to save even more money by not using the car: the ultimate positive feedback loop!
A few years later we bought our second using the same principles.
Then our third. Which we added an e-assist to this past fall, enabling year round cargo biking nirvana for us. (The e-assist was finally justified after doing the math on getting a kid or two to one school for the next seven years…)
In between we sold our first longtail and bought another version that is lighter and easier for multi-modal use. And, now, we are ready to sell our second because we have found what works best for our family.
Maybe your first step to being able to reap these financial benefits and being able to set aside the cash for a more complete cargo biking setup is to use the bike you have and get a used bike trailer. It worked for us.
Government and employment incentives
This transition would be so much easier for many families if the government would subsidize bicycles and/or e-bikes like they do electric cars.
Many employers offer perks like a gym membership, free parking, or transit passes. It would be wonderful if more employers were flexible in realizing that helping their employees invest in their health and city in other less ‘traditional’ ways would be amazing, i.e. a credit towards bike maintenance or purchase (and I have a business idea along these lines if anyone is interested, email me — I’m serious).
I fully acknowledge that we are fortunate and while I really do believe in this style of budgeting even though it felt restrictive and socially isolating for us, at first, I know that there are other’s in worse off financial shape. I also know that there a lots of people who have made it work for them or their families, in spite of financial hardship, and they have reaped all of the benefits of being able to cargo bike instead of operate a vehicle. We all make choices on how to spend our money in order to live the way we want.
Hopefully you are in a fortunate enough position that a little math on paper helps you make the paradigm shift to a car lite lifestyle!
Our annual car costs
In the spirit of full disclosure: We still own a car. A giant Honda Odyssey, in fact, which serves its purpose very well when we use it to get to the mountains for skiing, biking, or to visit family and friends, near and far. In 2017, it cost us about $3 000 to run (insurance, gas, maintenance), plus annual depreciation. The other aspect of our car budget is saving for the next one ($1 000/yr), saving for our next set of tires, and saving for bigger repairs down the road (our current car is fairly young but our last was ancient and required a lot of work so we learned our lesson).
We are very privileged to be able to afford the luxury of having this car sit on our parking pad for most of the week, but since we have it (and a dog and two kids and big gear to move) we will be keeping it. Whether or not we will replace it is an entirely different issue!
Disclaimer: This is not a sponsored post for YNAB or any of the companies or links mentioned within this post. I’m just a fan. For illustrative purposes on pricing of cargo bikes, I am linking up to my local bike shop’s online store. Stop in at your LBS this weekend and go for a test ride: Join the cargo bike revolution! #tothegrocerystoreandbeyond