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Dave Ramsey's Thoughts on Gas Prices

3 Minute Read

Gas prices continue to slowly rise, up 30 cents per gallon over this time last year. Since most of us are used to daily commutes, running the kids here and there and visiting friends and family, this price increase is affecting us both at the pump and in what we pay for other goods and services.

"But there's nothing I can do," some say. Dave says, "Oh, yes there is!"

It's time to revisit the budget.

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Most people feel like they've crunched their budgets as much as they can. But how much is your car payment? How much is your monthly cable or satellite bill? Is the Starbucks drive-through a regular stop on your morning commute?

This may be tough to hear, but new cars, cable and Starbucks are luxuries, not necessities! You can easily survive with a used (and paid-for!) car, no cable reality shows and coffee made at home. Just think of all the money you could use to pay off debt and beef up your gasoline budget if you did just those three things!

An algebra teacher and Dave fan in Michigan sent in an interesting email on this topic. She wrote:

Dave, I often give my math students this calculation to figure out. A typical latte costs $3.59 for 16 oz. That's 22 cents per ounce or $28.72 a gallon! Ask your listeners if they've drank a gallon of latte lately!

Wow!

First Things First

You must remember there is a difference between needs and wants in life. The first items in your budget should be your needs: shelter, food, transportation, clothing and utilities. If you currently go to the movie theater every weekend or have a Hawaiian vacation at the top of your list, but you struggle to pay the electric bill, your priorities are out of wack. Don't sacrifice your needs to finance your wants. If you do, it will catch up with you and you'll regret it.

Plan Ahead

You can also strategically plan ahead while running errands and commuting to work. If you go to the grocery store twice a week, reorganize your list so you only have to go once a week. If you have a lot of errands to run, plan your route ahead of time so you're not retracing your steps around town. You could also organize a carpool with some of your coworkers who live near you.

It's anyone's guess where gas prices will end up, so see where you can free up some money and keep your family from feeling the pinch. The only way to do this is to know where your money is going. Well, we believe budgeting should be easy and, dare we say it, FUN! Give every dollar a name and focus your money on what matters. Meet EveryDollar, Dave's free budget tool.

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