How Do Fluctuations in Fuel Prices Impact Your Budget?

Fluctuations in fuel prices are a fact of life, and with a limited resource, things can only get more serious. While a $0.10 increase in fuel per gallon may seem like a relatively small amount, when it comes to a tank, you could be looking at $2 per fill-up (or more if you drive a car with a big tank). So what impact do fuel prices really have on the average household budget? Here is Herb Gordon Subaru's answer.

If you are on a high income and or you have relatively few other financial commitments, then an increase in fuel prices may actually have very little effect on your budget. In fact, the chances are that you won't even notice the change. Drivers with a high disposable income are the least vulnerable group, because they are much better equipped to cope with even relatively high increases in fuel prices.

Households on an average income are more likely to see an impact and will have to take appropriate decisions to adjust their spending. Realistically, an increase of $2 per fill-up, seen once or twice a week can eat into a family budget of $20-$30 per month. That could mean less money to spend on luxuries like days out, trips to the theater, birthday presents, or new clothes for the kids. More seriously, families that are already stretched could find themselves having to cut back further in areas where there isn't much room to move. Families are coping with this by switching to cheaper grocery brands, cutting back on meals out, and trying to find more financial wriggle room for the basics.

For some families and individuals, of course, any increase in gasoline prices is extremely serious indeed, because there simply isn't any room to move. Families and individuals on lower incomes, relying on their cars simply to get to work, have to make other compromises. Disabled drivers or those using a car to help care for somebody who is disabled can find themselves falling into debt, simply to keep their cars on the road. The link between increasing gasoline prices and significantly reduced household spending demonstrates that, particularly for individuals on low incomes, most other areas of the budget take a hit before fuel prices.

It's worth remembering, therefore, that while global fuel prices may seem like a remote problem, the situation is certainly not far-removed from the average American. For some, an increase in fuel prices is not about whether to buy a coffee at Starbucks. It's much more serious than that. For some individuals, an extra $0.10 on gasoline prices could be the difference between having enough money to eat a decent meal and not.

Because of this, it's important to choose a vehicle with the efficiency to meet your driving needs. Contact Herb Gordon Subaru for more information.