Can You Walk Your Way Out of Debt?

I was talking with one of my fellow financial planners, Cynthia Meyer, about a wide range of topics recently. During our conversation, I laughed that I was feeling too lazy to walk the two blocks from where I live to the grocery store. That’s when she told me this story of when she decided to walk EVERYWHERE….

Sometimes our biggest financial lessons come from our most frustrating problems. For me, parking on the wrong side of the street set off a chain of events that changed my life for the better. In my mid-30s, I had finally paid off my Ford Bronco II. It was my first real car, purchased secondhand after a move to California, a state that reveres the automobile and makes it very hard to get around without one. I loved driving my Bronco, but it was ten years old and had been across the country and back a few times.

I had more important priorities than new wheels though. I had recently switched careers from politics to finance and was still paying off some bills, including the last of my student loans, and wanted to save for a house. I had already drastically downsized my lifestyle to handle my change in income while I built my financial planning practice. I figured I would keep the car running for a few more years until I was able to save enough for a down payment on my own place.

However, the city of Oakland had different plans for me. On Thanksgiving, I left the car parked on a city street and took the train into San Francisco to visit my cousin. It was a great party, and I got back to the East Bay after midnight. When I walked to my car, I discovered that it had been towed to make room for the Friday morning street sweeper! The fees to get it out of the impound lot after a holiday weekend were more than the car was worth.

Over the next few weeks, I went through all the stages of coping with loss.

o Denial: This isn’t really happening to me. I was working so hard to live below my means and pay off my bills.

o Anger: How dare they tow my car. I was legally parked!

o Bargaining: If I stop eating out and don’t buy new clothes, I can afford a new car payment and still save for a house.

o Depression: I’m a 36 year old professional and I don’t have a car or a house.

Finally, I came to acceptance. No matter how many times I ran the numbers, there was no way I could finish paying off my debt and save enough for the down payment needed for a Bay Area home. Was I really willing to give up my dream?

Reluctantly, I concluded that the best thing to do was to give up my car. I’d save the money it would cost to get my car back, insurance, gas and parking garage fees, and I wouldn’t have to put more money into car maintenance. So I became a walker.

I had always walked for pleasure, and when I lived on the East Coast, I lived in the city and walked for transportation. In California, walking to get around was more of challenge. I lived up in the hills and my office was downtown. Sometimes I walked to the train, and sometimes all the way. If it rained too hard to walk comfortably, I’d take the bus or a taxi.

For the first few weeks, I was resentful, but little by little, determination took over. Nothing was going to get in the way of me getting back in financial balance. After a few weeks, working out how to get somewhere wasn’t that difficult. I got over the embarrassment and began to be proud of my decision. I enjoyed walking and even lost some weight.

I freed up about $300 per month, and that was without a car payment! If I’d bought a new car, I would have easily spent double that. According to, the average monthly new car payment is $479. Add in insurance, gas, parking and maintenance, and that can total up to $700-$900 per month in transportation costs.

If you are working towards a big financial goal, such as paying down debt or saving to buy a home, looking at how you can minimize transportation expenses is a great place to start:

o   If your area is pedestrian-friendly and there is public transportation, consider selling your car and walking or using a bicycle. You could save $5,000-$11,000 per year.

o   Rent a car when you really need one or use a car-sharing service like Zipcar or Enterprise Car Sharing.

o   If you have two or more family cars, see if you can downsize to one.

o   Aim for transportation costs that do not exceed 10% of your income.   This auto loan calculator and auto lease calculator can help you figure out what you can afford.

You will be happy to hear my story ends well. By the time I met my husband the next year, I was a happy pedestrian with an emergency fund, zero credit card debt and the beginnings of a nice nest egg. Even after we married, we shared a car. By living debt-free, I was able to start off our marriage with a strong financial foundation.

Now, I am a homeowner and a rental property owner. I have two school-age children and live in a semi-rural area, so I need a car to get around but no matter how far I’ve come, the lessons from that challenging period of my life still stick with me. I have a modest, fuel-efficient car, which we paid for with cash five years ago. That’s enough for me. The rest of the time I’ll be walking.


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