Get out of debt

Expense #5: Gas

As everyone is aware, gas prices have grown astronomically in recent times.   For many years gas prices had been relatively level and it seems that they are making up ground in a short period of time.  At $3 and more per gallon, gasoline has become a major expense for most households and needs to be specially addressed when looking at ways to control expenses.  Here are some tips/hints on cutting down on your gas consumption and lowering your gasoline expenses:

1) Buy a car with good gas mileage

Now this recommendation is only for those who are already looking to purchase a car.  I'm not suggesting that you run out and blow $30,000 just to save a few bucks a month on gas.  However, if you are already in the market for a new car, you need to seriously consider gas mileage when making a purchase.  To get a survey and to compare the annual fuel costs (and savings) between cars you can check out the following web site:

http://www.fueleconomy.gov/

Comparing two extremes, here is an example of how the vehicle can determine how much you spend annually on gasoline:

Honda Insight:  $732 fuel cost

Pontiac Grand Prix:  $2342 fuel cost

Ford Ranger Pick up (2wd):  $1773 fuel cost

Dodge Ram 1500 Pick Up (2wd):  $4920 fuel cost

Note: This is based on 15,000 miles annually and 45% highway, 55% city driving using a $3.07 per gallon gas price.  So you can adjust for your own driving habits, but it gives you a good idea on what difference in gas costs the type of car can make.  If you drive more than 15,000 miles a year then the difference the vehicle will make in your gas expenses will be even greater.

To compare the best case and worst case above, the difference in gas expenses the choice of vehicles is almost $350 per month.  This is huge!

2) Reduce your overall driving

The next thing to do to lower your gas expenses is to reduce the number of miles you drive. 

First, your car will use more gas per mile in city driving so you need to consolodate your local trips by planning ahead.  Think about where you need to go and what you need.  Try to get all your errands done in a single trip and, better yet, at a single store. If your trying to decide whether to go out to eat, be sure to caculate in the cost of gas into the equation.  If the restaurant is 7 miles away, this means a 14 mile round trip which means (at the latest IRS rate of $.485 per mile) you will spend $6.79 on travel (gas and car expenses) alone.  Hard to believe.

Next, you need to think long and hard before going on a road trip.  If you like long leasurely drives to clear your head, remember they are costing you dearly in gas.  Using the same IRS rate, if you go on a 200 mile drive, that will cost you $97 in gas and car expenses.  Ouch!

3) Tips on how to drive to get better gas mileage:

You can actually save money and get better gas mileage just by changing your driving habits.  Here are three proven ways to improve gas mileage:

a) Starting and Stopping:  Fast starts and stops can burn up gas.  It has been shown that slowing down your starting and stopping can add up to 5 miles per gallon to your cars city mpg.   It will also save your breaks and engine.

b) Cruise control:  By using cruise control, many cars can get between 1 and 2 mpg better on the freeway. This can be a big gas saver on a long trip.

c) Tire air pressure:  Keep your tires at the proper air pressure.  Not only can this save you money on tires in the long run, but, in some cars, can gain you some miles per gallon.

 Free Gas Mileage Tracker Software - Gas Mileage Tracker is a program designed to help you understand and track your gas mileage (MPG) and gasoline usage.   You can track your total miles and gas mileage (MPG), your total highway miles and highway gas mileage, as well as your city miles and city gas mileage.  You will have a record on when you filled up on gas, how many miles you got in a given tank, how much you spent, and what your MPG (miles per gallon) was for the tank of gas.

Go to Expense #6: Other "Stuff"



 

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6 Steps to no Debt 

Step #1:  Renegotiate debt, consolidate debt, and settle debt

2) Pay off your credit card

3) Get some emergency savings

4) Start investing in 401k plan or IRA

5) Pay off other debt

6) Invest conservatively

Controlling Expenses 

1) Utilities

2) Food

3) Clothing

4) Entertainment

5) Gas

6) Other "Stuff"

Financial Mistakes to Avoid

Holding Loser Investments and Stocks

Not saving for Retirement

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Interest Only Home Mortgages

Cash Value Life Insurance

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