Budgeting Tip: Pay No Attention to the Price of Gasoline

gas prices, price of gasoline, price of gas


“What are you doing with all that extra money we’re not spending on gas?”

This was the question posted on Facebook by my local television station referencing the recent decline in gasoline prices.

My response would have been, “Not much.”

Gas prices have indeed slid about fifteen cents a gallon over the last two weeks as tensions have eased over the situation in Syria, and who knows what other unexplainable reasons that big oil companies use to explain price fluctuations. When you really think about it, fifteen cents a gallon really isn’t that much. While every price decline and dollar saved is certainly welcome, that fifteen cents would save me $3.00 when filling up my minivan’s 20 gallon tank. If I fill up once a week, that would put about $12 a month back into my budget.

Hardly anything to do cartwheels over.

Thinking more about this, I wondered to myself just how much would gasoline have to decline in price before I would really notice a difference in how much I’m paying at the pump, and add a significant amount of money back into our monthly funds. So I did some quick calculations, again using my 20 gallon minivan and a once a week fill-up as my standard scenario:

  • 15 cents a gallon = $3 per tank or $12 per month
  • 25 cents a gallon = $5 per tank or $20 per month
  • 50 cents a gallon = $10 per tank or $40 per month
  • 75 cents a gallon = $15 per tank or $60 per month
  • $1 a gallon = $20 per tank or $80 per month

Even a 25 cents a gallon decrease wouldn’t really be obvious when filling up, even though I’d gladly take an extra $20  month in my pocket.

A 50 cents a gallon drop, or $10 in savings per tank, is really the cut off line where I think I would notice that gas is costing less per trip to the pump, and the $40 a month would certainly be welcome

The question is, when was the last time we saw a sustained drop of 50 cents a gallon in gasoline? Yeah, I can’t remember either. Which is why I currently budget our gasoline usage based upon 2 tanks per vehicle (we have two vehicles) per month at a $4 a gallon price.

  • Minivan: 20 gallons x $4 a gallon x 2 tanks = $160
  • Car: 15 gallons x $4 a gallon x 2 tanks = $120

Total: $280 per month budgeted for gasoline.

If the price decreases, I never decrease the budgeted amount.  That expenditure is just viewed as being under budget for that month because we KNOW the decrease is temporary and eventually it will go back up. We treat it more as a sale than a permanent price decrease.

That way it’s less of a shock when the price shoots back up 20 cents a gallon on Friday due to a slight breeze across the gulf of Mexico.

How do you budget for your gasoline usage? How much would gas prices have to decrease for YOU to notice a difference?

Brought to you courtesy of Brock

About the author

Brock Kernin


  • I have a long commute (I think) of 120 miles/day. I get an average of 25mpg in my older, paid-off car. So with 24 gallons per week in pure commuting, I’d notice at about the same point I think.

    I do love cashing in our grocery points (Kroger) each month and filling both cars. It’s nice to pay less than $3/gallon on that glorious day. Sure we pay for it in groceries, but I still enjoy it.

  • @Dan We just had a grocery store start a similar program with a big gas station chain as well….I’ve heard of people getting gas for super cheap using the program. I’ve got to check it out soon!

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