How to Defray the Cost of Almost Anything
I don’t pay for gas.
Nope, haven’t in about two years.
Before this conjures up images of siphoning gas in the dark of night, or executing the perfect “pump and run”, let me clarify: I exchange tender for my purchase: but I don’t factor gas into my weekly budget.
Rising gas prices are making the consumer grumpy. On the pleasure spectrum, paying for gas is as much fun as eating your vegetables or cleaning the toilet. The higher the price, the more our disdain grows.
So I figured out a way to make gas prices inconsequential in my life. I dropped gas from my weekly budget.
And you can to.
Adjusting Flexible Spending
Every family has a budget.
This budget is based on how much income you bring in and how much in monthly expenses goes out. Some expenses are fixed, such as rent, mortgage, utilities and credit payments. Others are flexible expenses that can vary from month to month. Flexible expenses include food, clothing, transportation, household expenses, and entertainment.
Gas is a flexible expense, so therefore can be counterbalanced with another flexible expense.
A few years back, when gas prices were spiking, I decided to take another look at my flexible expenses.
I started with my family grocery bill. According to the U.S. Department of Labor, a family of four spends an average $1000 per month on food. Even though my family was already below the national average, I decided that this was the easiest place to cut. By dedicating 1 hour each week I was able to easily trim my family food budget by 30%.
Believe me, I am not one of those extreme couponers. I saved this much by clipping and organizing coupons from my Sunday paper and carefully reviewing local sales circulars. After choosing the store with the best deals, I would create a grocery list based on sale items only and build my weekly menus around them.
By combining these sales items with as many coupons as possible, voila! The money I always budgeted for groceries paid not only for food, but filled my gas tank as well.
My only dilemma was how to spend the extra money I originally budgeted for gas that was now left untouched.
Identify your Stress Point
When the price of one of your bills rises too much, it isn’t necessary to find a way to adjust the entire amount. Rather, identify the point where any item, such as gas, begins to stress your budget. That is the amount you adjust in your flexible spending.
If $3.25 a gallon was doable, but $4.75 a gallon begins to cause stress, then the adjustment to your flexible spending will be low. If you fill your tank once a week and your tank holds 15 gallons, then your increased weekly expenditure will be $1.50 x 15, or approximately $25 per week. After you identify how much your budget has increased, the next step is to decide where you want to cut.
Feel free to mix and match from all of your flexible expenses.
For example, cut one Starbucks Grande cappuccino, a package of Oreos and a takeout cheese pizza and you’re there. Or, if you shop where double coupons are accepted, then 10 50-cent coupons, eight 75-cent coupons, and three $1 coupons hits your mark. Cutting one trip to the movies for two (without snacks) saves you $25 dollars. And waiting till you’re running shoes are 25 percent off accomplishes your weekly goal as well.
Gas and Beyond
When any of your expenses go up, there are always ways to counterbalance them.
Those of us who have ever added a teen driver to our auto insurance knows what it is like to watch a bill go up. To help lower the cost, make an appointment with an agent to discuss possible ways to save. Your agent can review your policy and check to see if you are taking advantage of offered discounts for good grades, driving courses, and low mileage.
In addition, other tweaks and adjustments like dropping collision on older vehicles, changing torte and raising deductibles can help further. By restructuring policies, you should be able to lower your payment. This should help decrease the amount that will need to be offset. All expenses work the same way. If you add a premium cable station, then drop NetFlix. Upgrade your cell phone plan; offset it by dropping your landline. Buy a Kindle, sell your old books on sites like Half.com. If you are willing to do a little work, any price increase can always be offset somewhere else.
Life is Fluid
If the rising cost of gas is still stuck in your craw, try focusing on the positive aspects of the economy instead.
If you’re a homeowner and have yet to remortgage your home, go for it. It will be a long time, if ever, before eligible homeowners will be offered the historically low interest rates that are available now. If you are in the market for a new car, again, the interest rates for well qualified buyers are extremely low, and in some cases non-existent. We are living in a time of cash back, free shipping and rewards points. Take advantage of all the deals you can. It will more than compensate for the rising cost of fuel.
The budget you created in your twenties is certainly not the budget you will be living with when you’re forty. Having the ability to bend in the wind will always keep you more financially stable than someone who fights it. You can’t stop change. But you can stop letting it sabotage your financial health.
So if the price of fuel is getting you down, review your flexible spending. With the right adjustments, you may find yourself proclaiming to the world, “I don’t pay for gas!” Or at least you won’t feel like you do.
Contact us for assistance with your budgeting needs.