Now that the cost of gas has reached over $4 a gallon, it puts this expense into a completely new category. The rising cost of driving has reached the cost of many other large items, including the purchase of a new car. With gas prices so high, it is time to look at your whole budget.
A good friend of mine told me an interesting budget story last week. Both her and her husband live in a rural area and have to commute to work in town each day. They have different schedules, so they can’t carpool. In addition, since they live rurally, there is no public transportation to their jobs. They have no choice but to drive their cars separately to work each day. Neither one makes much money, and with the price of gas, their budget was slowly eroding.
They looked again at their budget. Although they had two cars that were paid off, they were both older cars. One was smaller and got decent gas mileage; the other was a truck that guzzled gas. Between the two cars, they were spending almost a $100 a week on gas, most of that cost coming from the truck. At $400 a month, they realized that was a car payment.
They decided to sell the truck. Have the husband (who worked the furthest away) drive the small car. With the money they saved in gas, they were able to buy a brand new car with much better gas mileage. Now they had two good fuel-efficient cars, one practically brand new, and they were spending less of their money on cars (maintenance, fuel and loan payments combined) then they were before.
I felt this lesson was a good one for everyone to hear. When the cost of one of your expenses is rising, start looking for alternatives. Instead of watching your income erode, think out of the box. What other options are there?