Daily Fuel Economy Tip

Higher Gas Prices Beginning to Affect Lifestyle

Unless you’ve been living in a cave, or have been able to function without the use of a personal vehicle, you’re well aware that the cost of gasoline has skyrocketed over the last couple of years, and is beginning to take a significant bite out of many people’s “discretionary” spending money.

Over the past two years, the national average price of a gallon of regular unleaded gasoline has jumped from $2.40 to $3.07. While this 67 cent increase may not seem to hurt you too much when you fill up, over the course of a year, that seemingly insignificant price increase can add up to a lot of lost money.

For example, let’s say that you fill up your 12 gallon car once every week. That 67 cent per gallon increase will cost you an extra $8.04 per week, or an extra $418.08 per year. Obviously, the more you have to fill up or the worse gas mileage you get, the more money you’re going to have to spend, but I think you get the general idea.

If you’re making tons of money, that extra cost is likely to be lost in the noise. However, if you’re not making a lot of money and are already scraping just to get by, that unexpectedly higher gasoline cost could be enough to drastically change your spending habits.

To find out more on how others are being affected, I recently added a poll to Daily Fuel Economy Tip which asked: “Have you noticed a change in your lifestyle due to higher gasoline prices?” Based on the 112 responses, here’s how people answered:

• 36% of people said that they have had to significantly reduce spending in other areas of their lives due to higher gas prices
• 32% of people said that they have not had to reduce spending or change their lifestyle
• 29% of people said that they have reduced spending, but haven’t made significant lifestyle changes
• 3% were unsure how higher gasoline prices have affected their lifestyle and spending habits

With oil having closed above $100 per barrel for the first time, gasoline prices are likely to continue to climb for at least the near future (hitting the $4 mark?), and unless something unforeseen happens, probably won’t begin to drop until early in the fall of 2008.

Unfortunately, this probably means that more and more of us will begin to feel the squeeze, reduce our spending elsewhere, and push an already feeble economy deeper and deeper into a recession.

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