Bikes are awesome. For a month or two worth of gas, or probably less than a month of expenses (amortized, all-things-considered) you can buy a used bike. It's not as convenient, and is harder work, and it sucks going uphill unless you're in great shape, but on the other hand you can completely total your bike twice a year and still come out hundreds of dollars ahead compared to driving.
(What sucks about bikes is the infrastructure, at least in the US. "Bike friendly" means the city gives you a lane right next to the parking lane, and expects you to run headfirst into opening car doors and cars turning across your lane.)