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What higher gas prices mean to your budget

Posted Apr 28 2008, 02:01 PM by Karen Datko
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Higher gas prices are assuredly hurting people with incomes near or at minimum wage. But how about many of the rest of us? Has the price done as much damage to our standard of living as some people claim?

Not hardly, said Seb at Pinching Copper. This blogger often approaches problems from a fresh point of view, and this time he analyzed what higher gas prices are costing many drivers.

He figured out how much more the owners of three different types of cars -- SUVs, sports cars and sedans -- who drive 15,000 miles a year are now paying for gas compared with a year ago. The increase is $30 to $40 a month, manageable for many people, he said.

"While a higher price for gas might create some sticker shock, for most people it is hardly the budget buster that they are making it out to be. Sure, paying more for gas sucks. But an extra $35 a month per car should not strain your finances," Seb wrote.

Plus, you can cut down on your gas consumption by following driving tips we've written about here.

"The fact is, if you cannot afford an increase in your yearly budget of $500, you are stretching your income beyond what you can afford," he said.

Comments

 

Boy, I wish I was one of those people where $35/month wouldn't strain my budget.  Though I've cut out most discretionary spending and only driving when I absolutely have to, that extra money is money that could go into my savings which I am trying to build up.

What about the increase in food prices due to transportation costs? Should everyone be able to suck that up also?

I agree!  Yes it's hard to watch the gas prices go up and up, but at the end of the day it's really not affecting your budget the way most think it is.  The problem is too many people just regurgitate what the news tells them and fail to actually run the math themselves like Sed.

Sure, $35 isn't much.  I don't even have a car to put gas in, but the cost of my monthly subway cards went up about $20.  When you add that to the extra increase to the cost of groceries, the 16% increase I saw in my portion of my health insurance, the 3% increase to my rent, etc. this slowly becomes a very big problem.  Donna has mentioned "snowflaking" or saving very small amounts and watching them grow and compound over time before and the theory applies to expenditures the same way it applies to savings.  

It may not show on the outside, but it's a "slow death" for the budget.  A dollar here, a quarter there.  Pay raises dont' keep up with inflation.  It won't be a total disaster in a month, just a gradual decline.  

What an arrogant jerk. How very simplistic can you get?  $35 per car per month may not strain your budget, but it does affect it.  Unless you decrease savings goals, that money has to come from somewhere--whether it's your Starbucks, food or medicine.  The fact is that if it was only the gas tank that was affected, it would not be such an issue of concern.  Unfortunately, as the past posters have noted, it's not just the gas.  It's the price of basic neccessities--food, insurances, taxes, etc. in addition to that $35 per car per month that is making budgets go haywire.

Only $35 a month?  Well unfortunately, the high gas prices affects more than what we pay at the gas pump. As a result, food costs are higher (among other factors, the trucks paying to bring the food costs more so they raise their prices and the grocers then have to raise their prices, and I'm sure trucker are paying a lot more than $35 a month in gas costs), utilites go up espeically heat to heat our homes and gas to cook, the list goes on.  the rise in gas prices costs people more than $35 a month on top of the fact that most companies are cutting back on raises and staff because of the slowing economy.

that blogger is way off on this one.  the reason most people are complaining is because the cost of EVERYTHING is going up.

I agree that this is way to simplistic of a view.  If you have a budget and are trying to stick to it, than you have to have the money come from somewhere.  It isn't just the tank of gas either, it is the food price increases, going out to eat, etc (as others have mentioned)  If you have a job that drives a LOT and you don't have a choice but to switch jobs for it (and no it is not worth switching jobs for).  Instead, we go on fewer dates (bummer!), try to eat cheaper, so that we don't start impacting deposits into our EF, IRA, charities, etc,.  Not living beyond our means, just trying to stay within our goals.  So unless you have unlimited petty cash, it is hurting the average american.

It's easy to say only 35 dollars a month. We live in maine and heating oil has gone from $ 2.15 a gallon last fall to as high as $3.99 a gallon today. The average maine house uses 850 gallons a year. That's  and extra $1564  that must be found in a persons budget. How many budgets have and extra $312 in the budget each month. The reason the amount is so high is because most people buy all there oil over the 5 winter months and must pay for it when they get it. so for a lot of poeple in maine it's the 312 + 35=$347 plus extra for electric, food and health insurance. Something has to give.

 I also drive a truck for a living and can tell you that diesel is killing the industry. I drive for a company and we budgeted for $3.50 a gallon and are paying over $4.00. Our trucks run over 100,000 miles a week and get about 5 miles to the gallon.If you do the math we are spending an extra $10,000 a week and that is at $4.00 a gallon. We either spend less or raise prices to the customer.

This guy is not looking at all the facts.  The price of everything that gets delivered by truck is going up.  From food to flowers to stamps it's all going up because of gas.  Anyone who can say the price of gas isn't affect our budget needs to get his head out of the clouds and live in the real world.

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