Wednesday, November 11, 2015

Why Cheaper Gas Doesn't Move the Needle

There's been a lot of chatter in the financial entertainment industry about the boost that lower gasoline prices should give to consumer spending. I decided to take a look at my records for the last 3 years to see if we've seen any benefit.

Both of us have worked for the same companies during the period in question and there have been no other lifestyle changes. Most of our driving is in town. That chart up there  shows our quarterly gasoline purchases for the last 3 years. The big dips in Q1 2013 and 2015 cover periods when we took lengthy vacations.

Here are the numbers behind the chart:

So what do we have? Q3 2012 was our most expensive quarter; we spent $385.85 on gasoline and Q3 2015 was our cheapest non-vacation quarter at $250.82 a savings of $135.03 for the quarter or about $45.00 per month.

That's nice, but in the overall scheme of things in our household that represents about 1.28% of our monthly budgeted expenditures (about $3498 monthly). But let's take a look at inflation:
2.1%, 1.5%, 1.6% and what looks to be close to zero for 2015. What looks like $45 a month savings over 3 years has had it's buying power gobbled up by inflation in each year except 2015.

So pundits heads up!  Here's one family that hasn't seen any real benefit from lower gas prices.

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