By David Pilley on February 2, 2012

If you needed another reason to not open a new line of credit, try gasoline prices. Much of your everyday spending deals with the essentials of food and shelter. Stretch it out over a month, and you’ll deal with a bunch more bills, like rent/mortgage, utilities, and miscellaneous entertainment. Gasoline is one of the red flags in your budget. It’s an expenditure that isn’t as planned as it should be. You might just decide, “Oh, I’m running low on gas” and then go fill up. Making your gas tank fill-ups more structured can be difficult because of the volatile nature of gas prices. Not only do they constantly change, they are different in every state, even in different cities within the same state. However, you can become more structured in dealing with gasoline purchases.

In the third week of January, the national average of gas was $3.39 per gallon. This is about 17 cents higher than December, and it is a record high for the month of January. This is unusual because gas demand is currently going down. (A major refinery in the Virgin Islands will be closing down in February. It produced about 350,000 barrels per day.) Analysts say tensions in the Persian Gulf have kept oil prices around $100 per barrel, but Iranian imports are banned in the US. Who exactly sets gas prices is downright convoluted, but it basically comes down to local taxes, competition, and distance from oil refineries. Prices at individual gas stations can actually change multiple times during the day because the store owners drive by their competitors every day to keep track of what they are doing. Because gas prices are subject to change, I suggest you check out gasbuddy.com to check out average gas prices in your city and state. (It saves driving around to see them…)

So, gas prices could go up in the near future, or they may go down, or they might not change at all. It’s hard to tell, so what can you do to save up on gas? Well, carpooling or taking public transportation from time to time will save you immediately. This might not always be an option, so become a better note taker. Keep track of how many miles you drive per day by using your car’s odometer. Whenever you fill up on gas, write down the total cost, the number of gallons, and the cost per gallon. As a safety net, always keep a spare gallon of gas in the trunk of your car. After you keep notes for a while, say a month or so, you can analyze the data to see how many times a week you should fill your tank. Besides using the website I supplied, you can also watch your local news for reports on local gas prices. (This is usually more common in the summer, when most people go on vacation, and gas demand is higher.) If you write down what you spend and keep track of local prices, you will not fall victim to overspending on gas!