Adjusting Your Budget With Rising Gas Prices
Many of us need gas to get where we need to go, and high gas prices can have a devastating impact on your personal finances depending on how often you need to refuel. Even if you don’t have a car, you’re bound to feel the effects of inflation as rising gas prices affect supply chains. Learn how rising fuel prices can affect your budget and how to adjust your expenses accordingly.
How to Budget for Rising Gas Prices
Start by calculating how much you tend to spend on gas every month. You can look through your bank statement to see how much you spent previously. Track how these expenses have changed over time.
You can also calculate the number of miles you need to travel every week/month, including commuting to work, running errands, and hanging out with friends and loved ones. Find out how many miles your car gets per gallon of gas by researching the make and model. Divide how many miles you need to travel by the miles-per-gallon (MPG) rating.
For example, if you need to travel 200 miles every week and your car gets 25 mpg, you will need to buy around 8 gallons of fuel every week. Multiply this number by the average price per gallon to estimate your weekly fuel costs.
If gas is around $4 per gallon, you’ll need to spend around $32 per week on fuel. See how this number will affect your monthly budget.
Alternatively, you can check your personal mileage by resetting your trip odometer when you refuel. The next time you refuel, you can divide the number of gallons you used by the number of miles you drove.
If you find that you’re not getting the mileage you should be, the fix could be as simple as making sure your tires are inflated to the proper PSI or making sure you get other basic maintenance done.
You may need to eliminate other expenses to make up the difference from higher gas prices. Find out how much you used to spend on fuel every month to see how it compares to the new normal. For example, if you previously spent around $50 a week on gas and are now paying around $75 per week, find ways to reduce your expenses by $25 every week, or $100 per month.
Consider reducing non-essential expenses like dining out, entertainment, salon visits and fancy clothing. Find low-cost alternatives to the products you use every day to save money. You can buy generic brand food and clothing to cut back your expenses.
The same is true of many health and beauty products, including makeup, toilet paper and even medications. Try looking for coupons online or in the newspaper to save even more money on the products you need.
If you have prescription medications, look for low-cost providers or discount resources to help you save money. You can also talk with a medical professional to see if there are generic brand options you can take.
You might want to cancel your monthly subscriptions that can eat away at your finances. You can exercise outside instead of going to the gym or look for free entertainment websites online instead of paying for Netflix or Disney Plus.
How to Save Money on Gas
Find Cheaper Gas
The first thing you can consider is to find the cheapest gas available to you. You can use apps like GasBuddy to see the prices of gas stations in your area. Try to find a healthy balance of finding a gas station that has cheaper gas, but isn’t too far out of the way. Look for gas stations that are close to your normal commute.
Use Fuel Reward Programs
Another way to save money on gas is to enroll in fuel rewards programs or use credit card points. Some gas station chains and grocers will offer fuel points to loyal customers for shopping with them. These types of programs are an easy way to save a few cents per gallon. Check to see if the places you frequently shop at have these types of programs.
You can potentially increase your fuel savings by using a credit card that provides points or cash back for gas purchases. Many rewards credit cards will offer 1%-5% back for every dollar you spend on gas, effectively providing you a rebate. If you plan on applying for a rewards credit card, try to avoid high annual fees and interest rates and make sure to pay off the balance every month.
How to Consume Less Fuel
You can also try consuming less fuel when gas prices are high to make up the difference in your monthly budgeting plan. You can try to be more efficient with your time on the road by making as few stops as possible.
Use tools like Google Maps to help boost your fuel economy. Google Maps now has a feature that finds the most fuel-efficient route you can take, which is indicated by a green leaf symbol.
You can also improve your fuel economy through tips like avoiding unnecessary starting and stopping, using cruise control on the highway, not idling unless necessary and removing excess weight from your vehicle.
If possible, consider taking public transportation to work instead of driving. You can also carpool to work or school by having someone pick you up. You can both drive to a central location or meet up near the highway and then finish your commute in one car. Organize a carpool with the other parents at your children’s school or daycare to limit how far you have to travel.
Talk to your employer to see if working from home is an option. If you need to work in person and commute to work, consider working back-to-back shifts instead of working for a few hours every day.
Rising prices can be a drag on your finances, but you might be able to make up the difference by eliminating non-essential expenses. If you are living paycheck to paycheck, there may not be any fat in your budget to trim. Use budgeting tools like our budget spreadsheet or Ent’s Money Insight to help you keep track of your expenses and to see if there are areas where you can start saving.
Look for discount programs on regularly used goods and services and take advantage of credit card points or fuel reward programs to help save money on gas even as fuel prices continue to rise.