The price of gas has been steadily creeping up and it is only going to get higher as summer comes along. While there is nothing I can do to change the price of gas I can take steps to lessen the hurt on my budget while the prices are still relatively low.
I am preparing for higher gas prices by taking a closer look at my budget. I will be doing two main things to make the summer more bearable when it comes to filling up my tank.
* Increase my gas budget
* Roll over my gas budget
I added a little more to the allowable amount for gas in my budget when I made the last tweak to the budget. This means I can spend a little more and not go into the red based on the fluctuations in the price of gas during the summer months. I did not increase it too much because I do not want to have a huge budget because that might tempt me to spend more.
img. from newcartoronto.com
The second thing I did to control the bite of the fuel on my budget is to roll over my budget on a monthly basis. Some bloggers call this hedging against the fuel price increase but I just see it as a sort of savings account for gas. The way it works is if I set up a $70 budget for gas then I will ‘spend’ $70 every month regardless of the actual cost. So during the lower priced months if I only spend $30 in gas then I have $40 to add to the following month’s $70. If the price of gas doubles, assuming I use $60 the second month then I still have a surplus to roll over to the next month.
Now I will not be tracking this rollover in my spreadsheet because that is too much of a bother for me but luckily Mint has a handy feature that allows you to set a budgeted amount as a rollover every month. This is great for me because Mint actually shows me how much I have rolling over each month and when there is a surplus I can spend more than the budgeted $70 without going over the total. I don’t actually move the money to a separate gas savings account but I know that I have that much more money to spend on gas when the price goes up and then when the price goes down again things will all even out.
I think at the end of the year if I have a surplus in the ‘gas fund’ then I will transfer some of it to the Splurge Fund and some to the Car Fund. I will use the splurge money to get myself a nice Christmas gift and the Car money will go towards the purchase of my next vehicle.
I like the idea of a Splurge fund when you have leftovers. I budget into categories for a lot of expenses. One that we may have some extra in is our heating bill. I had budgeted for a rate increase that we didn’t get plus I sealed a couple of leaks that had a much more favorable effect on our bill than I had thought. Many times with overages, I’ll simply move it to another category that I feel warrants an increase, but a splurge fund isn’t a bad idea either 🙂
I know Christmas is still a long way off, but do you have any ideas as to what you want to use the splurge fund for?
I am not sure yet but I do have my eye on a new smartphone!!!!!
I have also been thinking about getting a laptop or a tablet….I guess it depends on how much I end up with in the Splurge Fund.
I too am worried about the price of gas going up and messing up my budget. I don’t have a separate fund for gas – it all comes out of the Adult Allowance I give myself and my husband (we have separate accounts for this). Thus, if I have to spend more, I get less “fun” money for the month. I think we’ll probably have to bolster the account from savings though, if it keeps going up. We don’t drive much – but we live far from our schools and we have no way to move closer.
I like your idea of moving your excess at the end of the year to a need (car) and a want (present) – gives you an incentive to keep the spending down the whole year.
I think you did the right thing by saving money and rolling it over.
I have the same thoughts. I think you are doing a great job there, saving and rolling over to the next month!
It is quite frustrating watching the price of gas steadily increase. Here in Canada the pricing is even higher. Whenever we happen to drive down to Seattle, we make a point of filling up before heading back across the border. To combat the high gas prices, we also drive my girlfriend’s compact car much more often. Plus I walk whenever something is close enough.
Gas is up to almost four dollars a gallon where I live. It is ridiculous. I hope this will not last like it did a year or so ago. Anyhow I think rolling the money over was the best idea.
– Robert
I have found that driving with caution has helped me. I used to overlook the possibility of making accidents and spending on penalties while speeding. I have succeded in reducing money on gas by observing the speed limits. I mostly buy my gas on wednesdays. It normally goes up on thursdays in my city.
Interesting tip. I never heard of the “roll over” method until reading your post.
This sounds like something I should try out as it relates to my other expenses monthly like my growing food bill.