The Price of Gas: The National Distraction

Few things are as hotly discussed as the price of gasoline. I know people who will make a special trip to the gas station when they hear reports of a price change of a few cents on the gallon. I scratch my head when I realize that 2 cents off a gallon only gives you only an extra 20 cents in your pocket on a 10 gallon tank. It doesn't logically make sense to put that much attention into something with so little payback. People will give their dimes away when you need help at the vending machine, yet they run out at lunch to save the same. I call it The National Distraction.

Let's say I have a 10-gallon tank and that I fill up 4 times a month at $4/gallon, for simplicity's sake. At its peak, that would run me $160/month and $1920/year.

If prices went down to $3.50 that would be $140/month and $1680/year--a difference of only $240 over the course of an entire year and only and extra $20/month in my pocket!

Right now, we are seeing prices at half of $4. Well, that's $80/month and $960/year, and we are starting to see some significant savings.

We could all do wonderful things with an extra grand in our pocket for a year. But keep in mind this is an extreme example where you are taking the price of gas and cutting it exactly in half and being able to sustain that price level for an entire year. Gas prices were not at $4 for an entire year, nor will they be at $2 for an entire year.

The bottom line is that with all the nervousness over the price of gas, when you factor in your actual travel against the fluctuations in the price, you may be looking at a difference of only a few hundred bucks over the course of a year and only an extra Hamilton in your wallet each month.

By no means am I suggesting that pricing is fair, nor am I trying to justify the runaway profits of oil companies.

I realize small business owners as well as those with large SUV's with high mileage can actually measure their gas expenses in the thousands of dollars a year, and these folks are more acutely sensitive to the price of gas. Also, an extra $20/month for a poor family can make a huge difference, as well.

But for most of us, it is really not going to make much of a difference. I'm not saying it's not a big deal--I am only wondering if it is worth all the attention folks give it. Get a fuel efficient car, try to reduce your miles by carpooling and consolidating your trips, and quit worrying about the price change of a few cents. Try to put your attention on projects that will really save you much more money than keeping yourself on the lookout for the cheapest station to fuel at.

The real problem with the price of gas is when everything on the store shelves becomes more expensive as every company has to pay higher costs to ship their products. This is where the real threat comes into play.

If you really want to save money, consider these:

25-50% of food is wasted in American homes. Look at your food budget and you may see hundreds of dollars of potential savings there!

Try greening your home. This site says the average home in my zip code can save $682/year. It does require some investment, but it will continue to pay out year after year. It is also good for the environment. It is also something--unlike gas prices--that you have real control over.