It’s happening again! Gasoline prices are on the rise and no one seems to know where they will stop. I realize that watching those prices escalate can be depressing, but I urge you to take a deep breath, reassess your finances, and make the appropriate adjustments. Prices may be skyrocketing, but the sky isn’t falling…you CAN cope! These tips will help:
Create a budget.
How much money do you spend on gasoline every month? If you answered, “I don’t know” then you have just confessed that you don’t have a working budget. Instead of fuming about rising gas prices, use that anxiety as a motivator to get your money under control.
Establish your priorities.
Now that you have a budget, you need to decide which items you will decrease in order to offset your rising gasoline expenses. Hint: If you drive 1000 miles a month at 20 MPG, you are currently spending an additional $5 a month for every ten cent rise in gasoline prices. A dollar increase (approximately what we have seen over the past year) would be costing you an additional $50 a month.
Easy tip: If you use the envelope system to track your spending, you can simply transfer that $50 from your “eating out” or “fun” envelope into your “gasoline” envelope.
Some “what ifs”: What if you don’t like sacrificing good times to pay for your gasoline? What if you don’t have any flexibility in your other budget items? Answer: you are going to have to figure out how to keep your gasoline budget the same.
These tips will help you continue to live on the same gasoline budget.
I have a friend who is saving $200 a month by sharing rides with co-workers.
Be selective and plan ahead so you can multi-task your trips. The other day, because we were attending a birthday party in a city 30 miles away, my wife planned two other stops we could make while we were there. We not only saved the time an additional trip would have required, but we also saved about $10 in gasoline expenses.
Consider a more fuel efficient car.
No, I do not recommend that you go into debt to buy a new car. However, selling your gas guzzler and paying cash for a more efficient one is worth considering. Increasing your gas mileage from 20 MPG to 30 MPG will decrease your gasoline budget by one third.
According to CNN Money, every 10 miles per hour you drive over 60 is like the price of gasoline going up about 54 cents a gallon. That figure will be even higher for less fuel-efficient vehicles that get lower gas mileage to start with. The idea is to drive as slow as traffic and your schedule will allow. Lynn Truong, writing for Wise Bread, says that her gas mileage in her 2001 Honda Civic skyrocketed from 32 mpg to 47 mpg when she simply started driving slower. You might not have results quite that spectacular, but even an increase of 5 MPG could save around $40/month.
Change other driving habits.
Coast to stops and accelerate slowly. Don’t tailgate…driving at the same speed is the most efficient way to drive. Therefore, use your cruise control. Doing so, according to some experts, can save as much as 20 percent on gasoline expenditures.
Check your air pressure.
Everyone knows that properly inflated tires helps your gas mileage, so do it. Go by manufacturer’s recommendations, and check when cool. Proper tire pressure also helps your car ride better, handle better (and thus safer) and will extend the life of your tires.
Create a hedge by investing in gas and oil.
If gas prices continue to escalate, your investments make money. If they go down, you win with lower prices at the pump.
Use your GPS to find the shortest route.
Take advantage of your Smart phone’s GPS to plan the shortest route for your trips. Also try for more Interstate driving. Why? Because stopping and starting sucks up gasoline.
Get a motorcycle, scooter or bicycle.
I realize this is similar to tip 5, but two wheel vehicles should be in a category by themselves. The key is to estimate your break even time frame for this purchase. For example, if you purchase a $3000 motorcycle which gets 60 MPG, you would save about $130 a month if driving 1,000 miles with $4 / gallon gasoline. In this case, your break even time is about 24 months (3000 ¸ 130). However, my guess is that you would actually be driving the cycle much less, upping the break even time frame to three or even four years. A bicycle is starting to sound like a pretty good option.
Although gasoline has risen nearly $1 per gallon in the past year, the actual increase in the average budget is only about $50 a month (assuming 1000 miles a month at 20 MPG). Face reality, make adjustments and enjoy life. You can cope.
Readers: How do YOU cope with rising gasoline prices?
This post has been re-written and updated from a previous post.