Cycling is good for you. Not only is it great exercise, but also a fantastic way to get around your city, gets you out in the fresh air, helps you avoid the traffic and is a hell of a lot cheaper than driving and public transport!
Bike to Work Scheme
Ireland has a great “Bike to Work Scheme” which allows you to buy a bike and accessories worth up to €1,000…and it is completely tax-deductible!! FREE MONEY!
Last year I decided to avail of this scheme, I was still the Foolish FIRE-ish but I was still able to spot a deal that I couldn’t pass up. So I went to my employer, filled out the form, did my research and went to buy a road bike, helmet, lock and lights.
The Cannondale Synapse has been the best expense in the last year. Let’s crunch those number I hear you say?
All in all the bike and accessories cost me €1,100. I paid this of over 10 months, and don’t forget the max limit allowed is €1,000 that we can claim for. So €100/month payment, taken before tax. I am in the higher tax bracket of 40% therefore each €100 means €40 in my pocket in tax-deductions.
Awesome, my €1,100 bike has automatically dropped to €700 because of these savings.
I have saved €400 which is now going into our stocks. Remember, we are looking at everything long-term so we can see the true value. This €400 compounds to €786.86 over 10 years, WHOOP!
But there is more!! The bike comes with other benefits; I get outside more, I exercise more (leading to a recent 14 kg weight-loss), I use my car less and I get around everywhere a lot quicker.
I want to focus on the using my car less:
Car: VW Passat Sport 2.0 TDi Bluemotion
Fuel Consumption: 4.6L/100km
Average Diesel price: €1.419/Litre or €6.5274/100km or €0.065/km
My drive to work was 4.9 km each way, so 9.8 km each day. This works out at 49 km each week just getting to and from my job which I do to get money in order to pay for this fuel (which is why I am working towards FIRE to get out of this endless loop). I worked Monday to Friday and sometimes at weekends, with 5 weeks of annual leave and a week at Christmas so 46 weeks in total.
49 km for 46 week = 2,254 km for the year
2,254 km @ €0.065/km = €147.13 saved in fuel costs for the year
€147.13 compounded over 10 year @ 7% = €2,032.81
Add initial €400 to these savings, over all savings = €2,884.13
This is actually my first time running these numbers and I am pleasantly surprised. The bike will more than pay for itself. I pay €700 and end up with an extra €2,884.13 in my nest-egg. Looking back, maybe I was starting to turn into the Frugal FIRE-ish a year before I thought I did!
Check it out!
Any of you living in Ireland, check out the Bike to Work Scheme and if your employer offers it. If your employer doesn’t, maybe you can suggest it to them and be the first in your company, or if you are an employer, why not start helping out your employees by providing this possibility. I am not sure if there schemes are available in other countries, but maybe you should check it out! If not, then I still advocate getting a bike, because even without the schemes, there are significant savings to be made. And don’t forget, these are calculated purely on my work commutes, I have not even factored in any of the driving on my days off that I could have avoided with a bike.
I am Steve, the author and owner of Fire-ish, where I try to share my story and help people towards Financial Independence with small tips and tricks that add up. Follow me on Twitter at @fire_ish and on Pinterest. I am trying to grow my readership so if you enjoyed this post, please share it!