Rising Gas Prices: Practical Ways to Budget and Adjust
Rising Gas Prices: Practical Ways to Budget and Adjust
For most families, few things affect daily life as noticeably as gas prices. Recently, gas prices in the Birmingham area have seen a significant jump, with Alabama’s average exceeding $3.40 per gallon, and the national average surpassing $3.70.
These spikes are often driven by global factors beyond our control, such as recent volatility in Middle Eastern oil production and rising crude oil costs. However, the impact on your monthly budget is very much a local reality.
When Higher Gas Prices Start Affecting Monthly Cash Flow
When gas prices rise, it can easily add $30 to $50 to your monthly expenses per driver. If you haven’t built any margin (or cushion) into your budget, this increase might push your expenses beyond your income. To create or maintain a financial margin, it is crucial to review your budget regularly and adjust as needed.
Look For Easy Budget Adjustments
Start by identifying “lazy” expenses that have crept into your lifestyle. Subscriptions are often a great area to focus on for cutting costs. Many households pay for one to five streaming services, apps, or gym memberships that they no longer use. Redirecting that $15 or $20 toward your transportation fund can help offset the price increase.
Use Memberships, Rewards, and Technology to Your Advantage
You can often lower the price you pay for gas by using technology and membership programs. Apps like GasBuddy provide real-time pricing data for local gas stations, while FuelRewards Network allows you to stack discounts at Shell stations through grocery and dining purchases. Many individual chains may also offer discounts for using their membership programs or making payments through their apps. Additionally, wholesale clubs like Costco and Sam’s Club frequently price their gas 10 to 30 cents below the market average for their members.
Be Strategic About Your Payment Options
Your choice of payment can help you save as well. While using a cash budget can help monitor your spending, if you’re careful and disciplined, many debit and credit cards now offer up to 5% cash back at gas stations. Some examples include PayPal Debit Card, Citi Custom Cash, AAA Travel Advantage, and Sam’s Club Mastercard.
This does come with a word of caution: we recommend you pay your statement in full each month. With average credit card interest rates exceeding 20%, carrying a balance for even one month can completely wipe out any savings you gained at the pump and more.
Focus on What You Can Control
Rising gas prices can be frustrating, but they also serve as an important reminder to stay engaged with your financial plan. Making a few small adjustments, like cutting unnecessary expenses, comparing fuel prices, and being disciplined with your payment choices, can help ease the strain on your budget.
While you cannot control global energy markets, you can take thoughtful steps to manage your cash flow and adapt when costs increase, even when global markets are uncertain.
