I'll tell you what we need. We need yet another post about gas prices. Yea, that's the ticket.
Look, I know that I have contributed to the madness. And I'm glad I did. It allowed me to examine how much I'm spending in gas, how much it is as a part of my total cost to commute, ways that I can reduce fuel consumption, and even whether or not I should take par in any boycotts.
So, I've come to the following conclusion.
Rising gas prices have been blown way out of proportion.
I read this article in CNNMoney.com that tells us that retailers, especially lower priced ones, will suffer because gas prices are taking a bigger chunk out of consumer's wallets. I don't disagree with this. I completely understand that lower income people are more affected by this than mid to high income folks. So, rising fuel costs are essentially a regressive tax. That sucks, but here's where I think things are a little overstated.
They bring in this industry analyst, who probably has some nice credentials or experience. And he says, "When gas prices go up 5 cents a gallon, that's maybe an extra $10 a week out of consumers' pockets. But when they're going up 15 cents and more, it means $20 extra a week,"
What?!
Let's say you get 20 miles per gallon. I know, SUVs, blah, blah, blah. Well, we're not talking about people who drive Hummers. So, let's say you get 20 mpg. For a 5 cent increase in gas prices to take $10 a week out of your pocket, hmmm... how much must you be driving?
4,000 miles per week! Seriously, do the math. For a 5 cent increase to equal $10, you must buy 200 gallons of gas. If you get 20mpg, you can drive 4,000 miles before you buy 200 gallons!
So, if 5 cents equals a $10 hit, 15 cents equals a $20 hit? I hope this guy wasn't a math major.
Even if we look past his faulty math, and assume we all drive SUVs getting 10mpg, you would still have to drive 2,000 miles per week for that 5 cent increase to take $10 out of your budget.
Look, I know that prices have gone up a lot more than 5 cents. It sucks. But, aren't we going a little crazy here? There are so many areas in most of our budgets where we can cut back and make some meaningful savings. If you bought that car used to begin with, the savings would probably have paid for all the fill 'er ups for the next five years!
Stop paying interest to credit cards and maybe you could afford some gas.
I know budgets are tight, and the last thing we need is for fuel costs to start chipping away at that. But, what are you going to do about it? I'm trying to carpool once a week, drive more efficiently, etc. But it's not going to make or break my budget.
By the way, next time you fill up, go get yourself a lottery ticket or a fountain soda. That's where mom and pop gas stations franchise owners really make their money.
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