How Lower Gas Prices Could Mean an Additional $27,000 in Savings for You

June 14, 2017

A recent article in the New York Times pointed out that according to GasBuddy, gas prices are the lowest they’ve been in over 10 years – have you noticed? But more importantly, what are you doing with that extra money in your budget?

Unless you’re a professional driver, have a ridiculously long commute to work, or live in Southern California where my colleagues laughed when I shared this fact with them (taxes make up the majority of the price of a gallon of gas in that area), chances are that any savings at the pump have been casually absorbed into your everyday spending, offering little effect on your long-term finances.

In fact, lower gas prices may even compel you to spend more money on things like vacations, as the article points out – the people interviewed say that they’re planning to take more road trips due to lower gas prices. That kind of defeats the purpose, don’t you think?

A different way to think of it

You can get really technical in calculating how much you’re actually saving compared to last year – you’ll need to know the size of your tank, how many times you fill up per month and the actual difference in your spending on gas this year versus last year – but that’s not really the point. The point is that many of us have a fixed mindset about our inability to save due to a tight budget, and we miss opportunities that could painlessly help loosen things up.

The little things add up

The article estimates that a driver in the Midwest should be saving about $5 per fill-up. If you fill your tank once per week, that’s $20 per month or $240 per year. It doesn’t sound like much (it’s not), but it adds up. Increasing your 401(k) contributions by just $5 per week could give an estimated $27,000 savings bump to a 35-year old’s 401(k) balance over 30 years.

In other words, every $5 per week you can find in additional savings is a potential extra $27,000 toward retirement. With that in mind, what other ways can you find an additional five bucks per week?

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Are You Married to a Spender?

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Financial Lessons from a Group of Retirees

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I have had the opportunity lately to talk with a number of people who have been retired for at least a decade.  I asked them to take a look back at their financial lives to see if there were any lessons they had learned that today’s workforce could learn from.  All of these people were comfortable financially and had successful careers in their chosen fields.  I did not expect to hear so many comments about what they would do differently if they had the opportunity to turn back time.  They had some advice for their grandchildren’s generation, and here are just a few of their observations and recommendations: Continue reading “Financial Lessons from a Group of Retirees”