Everybody knows that A Penny Saved is a Penny Earned, but not everybody knows how much money they could save by saving a penny here and there. One of the biggest monthly expenses is gasoline for the car. Does shopping for gas really make a difference? Absolutely! What if I told you that you could save $75, just by going to the cheapest place for gas? That’s pretty good. But what if I told you that you could save $5,000, just by shopping for the cheapest gas? I bet you’d read on!
Saving = Good.
but
Saving + Investing = Great.
Especially on monthly expenses. Gasoline probably one of your top 5 biggest monthly expenses. Let me show you how you how gasoline savings add up.
Market Rearch
The other day, I needed to fill up my Xterra, and like usual, numbers were going through my head. I knew that I’d save money over the long haul by shopping for cheaper gas. But I decided to see how much I would actually save by shopping for gas. So I got in my car and drove around a little to find the best prices. As you can see from the picture gallery below, all taken on the same day, gas prices vary depending on where purchase gas. As it turns out, on this particular day, Costco had by far the best price.
The Analysis
First, calculate how much gas I need in a year.
| Vehicle | Xterra |
| MPG | 16 |
| Miles per year | 12000 |
| Gallons per year | 750 |
Next, calculate Annual Fuel Expense.
| Annual Fuel Expense, 750 Gallons | |
| @ $3.89 | $2,917.50 |
| @ $3.79 | $2,842.50 |
Next, calculate Annual Fuel Savings.
| Annual Fuel Savings | |
| $0.10 Savings | $75.00 |
Next, calculate monthly savings (divide by 12).
| Monthly Fuel Savings | |
| $0.10 Savings | $6.25 |
That’s not too bad. By shopping for fuel at the cheapest place, I’d save $75/year, or $6.25/month. I’ll take that!
Compound Savings
But here’s the secret: Don’t stop there!!!! Invest your savings into your most expensive monthly bill. Your savings will become compound savings. Look at how much money this typical family would save, just by applying gasoline savings to their mortgage.
Saving = Good. But Saving + Investing = Great. You could save nearly $5,000, just by shopping for gas, and by managing your mortgage. Pretty cool.
Interesting info!
What about getting a newer car that has better mileage? You’d save gas money, but you have to pay for the car.
Ahh, another blog post entirely! That’s always the question — keep the paid off clunker, or get a new car. I’ll get to that in another post! Thanks!