While Tesla and other electric vehicles (EVs) are making strides toward a greener future, they might not yet be within reach for everyone. Until EVs become more accessible, many of us continue to rely on our current gas-powered cars, known as internal combustion engine (ICE) vehicles. Here’s how to navigate the ongoing costs and manage your budget effectively with an ICE vehicle
When creating your budget, it’s crucial to consider your gas spending, especially with rising fuel prices. Deciding whether to allocate a fixed amount or a flexible amount for gas depends on your driving habits and budget cycle.
Fixed Amount vs. Flexible Amount
Fixed Amount: Allocating a fixed amount for gas ensures that you stay within a budgeted limit, encouraging you to drive more efficiently and avoid unnecessary trips. Any leftover funds at the end of your budget cycle can be rolled over to the next cycle or moved to savings. This method helps you control expenses and manage fluctuations in gas prices.
Flexible Amount: Alternatively, a flexible budget allows you to adjust your gas spending based on your actual usage, which can vary. While this approach accommodates changes in driving patterns, it may lead to overspending if not monitored closely.
The Impact of Gas Prices
With gas prices continually rising, having a clear budget for this expense is essential. Budgeting for gas can prevent it from becoming a significant financial burden and helps you manage price fluctuations more effectively. Don’t be fooled by these rare times when price may go down, sometimes significantly, as these usually don’t last. In the long term, gas prices will continue to rise, with governments pushing stronger for more people to adapt to electric vehicles.
Personal Experience
Personally, I allocate a fixed amount for gas and adjust it every few months. This approach has not only saved me money but also improved my overall budget management. Without a set amount, I’d risk overspending and impacting other financial areas. Moreover, setting a gas budget helps reduce unnecessary driving, saving on both fuel and car mileage. While I enjoy driving for its utility and pleasure, I prioritize saving money for more important goals, like building a passive income.
What If You Run Short?
If you encounter weeks where your gas allocation is insufficient, consider drawing from other flexible budget categories, such as ‘Personal Spending’ or ‘Emergency Funds.’
Saving on Gas
Even with a fixed budget, you can save more by:
- Reducing unnecessary driving
- Combining trips
- Using public transit when possible
- Improving your car’s fuel efficiency
- Generally planning ahead
For more tips on optimizing fuel mileage, click here.