Use Car Sharing to Make a Long-term Investment in Your Children’s Future

My friend Max is a finance wizard who demonstrated that skill convincingly to us recently when we were talking about saving car expenses recently at our lunch break.   He described to us the way he and his wife recently started up their kids’ education fund by using a car sharing membership program.  They decided to start the fund by using a Groupon coupon to get a $25 free driving credit when they enrolled as members in Zipcar auto sharing service.

Max said they’d initially disagreed whether to move to the suburbs or find a good family locale in town near their work.  After some discussion, his wife agreed to stay in town, but only if they set up a special fund for the children.  Max decided to put an amount that would equal whatever money that would ordinarily be spent on monthly car expenses – car payment – plus the average monthly amounts spent on fuel, upkeep, maintenance, insurance and parking – into a monthly deposit in a long-term investment account.  This would be dedicated to the children’s education.  They calculated the average amounts based on receipts for the previous year. He added the amount they would be paying monthly for an SUV payment to that average to calculate an average monthly “car ownership” estimate.

Then they calculated the cost of a Zipcar car sharing membership.  To that they added the average amount of time they used their car per week and the average mileage they drove to estimate how much would be used in a month of car sharing – without deducting any benefits they could get from Groupon discounts.  (They also added in the cost of a monthly transit pass, to cover times they wouldn’t use a car.)  This sum was used as a figure for monthly “total travel” expenses.  They calculated the difference between these two, and used that for the minimum monthly deposit in the fund.  This amount would accrue rapidly due to the fund’s higher interest rate.  And that didn’t include savings resulting from not having to include vehicle depreciation.  The Zipcar membership offered additional advantages like reductions in condo fees since they didn’t need dedicated vehicle parking.  They didn’t have to pay vehicle insurance or maintenance fees.  In all, Max and his wife agreed these benefits clearly outweighed those of the traditional two-car family in mid-20th century America.