Budget Sense

The current uprisings in the Middle East, the latest and most dangerous of which is now raging in Libya, has made gas prices shoot up by some 7 cents per liter, in less than a few days. That is an extra $5 or so for every fill-up.  For some, this may still not be a life changing increase, but for others, it already is. It is making them drive less, spend less on other things to afford gas, and making other changes to their lifestyle.

With the future being uncertain, and not knowing when gas prices can go down again, what can you do about it? Here are some strategies, in addition to all the common ones, to cope with current high gas prices:

-Don’t fill up, just top up: With things changing everyday, so will gas prices. In general, they have been going up for the most part, although they could go down as well. In fact, with things moving so fast, and one regime falling after another, gas prices do go down once a stubborn regime or leader eventually falls.  When the Egypt uprising started, gas prices went up, and as the president fell from power, gas prices came down. But once the Libyan uprising started (a much bigger exporter of oil) , gas prices spiked back up, and very sharply. But you can bet that once the regime falls, prices should come down.

-Check gas price forecasting websites: if possible, and unless you need to fill your car immediately, make it a habit to check the various gas prices forecasting websites, to see where prices are heading.  I have been doing this for years now, way before the current Middle East uprisings, and has saved me hundreds every year. Simply check to see if the price will go up or down the next day. Depending on the direction it is heading, that is how you will make your decision as to when you should buy gas.  Check GasBuddy or Tomorrows Gas Price Today for gas price directions.

-Make use of your ‘sick’ or ‘off days’: it may sound crazy, but if you have long commutes, take a day off to stay home, relax or get things done. Again, if you have a long commute, and given the high price of gas these days, you will actually gain from this. Of course, this is assuming that you are a salaried employee and do have paid vacation or sick days. In other words, if you are going to take them anyway, why not take some of them now?

-Put off unnecessary long trips for now: as we mentioned, these uprisings are temporary, and gas prices should come down eventually, so try to reschedule any trips that involve driving for long distances and wasting lots of money on gas.

-Share a ride or take the bus: if you haven’t shared a ride or been on a bus in a long time, or ever, it may be time to do it now. It will save you money on gas, and is a chance to try something new. Find out who in your company lives close and coordinate with them to drive each other to work, and alternate every other day or week.

-Ditch loyalty in favor of a cheaper price: if you are used to going to a specific gas station to get their loyalty reward program points (i.e Airmiles), you may put that off for now and look for the station with the cheaper price. Where I live, there is a gas station that has no loyalty program, but the price is always about 3 cents cheaper than other more well-known stations with loyalty point programs. At 3 cents, you are looking at some 2 to 3 dollar per fill-up. And as per our ‘5 principles of Financial and Budgeting Success‘ , every bit helps, right?

With gas being a very significant item in your budget, it is important to stick to the amount you have allocated for it and not exceed it, even if gas prices have gone up sharply. By following some of the tips we have outlined above and careful planning, you will avoid any major hit from these spikes.