Hey, remember 1999? I sure do. Sixteen years old -- the prime of my life. I used to cruise around in my parents’ green 1990 Ford F-150, jamming out to a mix tape that may or may not have featured the Backstreet Boys’ “I Want it That Way.”
Where was I going? Who cares! A driver’s license plus parental credit card privileges equaled supreme freedom; it just felt good to be on the open road. Back then, when I stopped to fill up, gas barely cost more per gallon than the pack of Jolly Ranchers that rode shotgun with me.
I remember gas prices with two digits. Yep, in February of 1999, a gallon of regular unleaded cost 92 cents on average. It wasn’t a huge blow to my parents’ budget to support my careless driving habits since the pickup truck -- dual 17-gallon tanks in that bad boy -- cost $31.28 to fill up.
Oh, how times have changed. I’m obviously older and more responsible (and financially accountable). Gas prices haven’t just added a digit; even accounting for inflation, they’ve more than doubled since 1999. And it seems like they just keep going up. According to AAA, gas prices have been rising for 27 days straight, hitting a national average of $3.77 per gallon today. And (duh) as they rise, they’re also taking a bigger bite out of our budgets.
To see how much, I got lost in the Bureau of Labor Statistics website. There’s no dearth of data in there; they can tell you how much you spent on pet toys the year your elderly dog was a puppy.
In 1999, the average American “consumer unit,” as the government calls us, spent $1,055 on gas and motor oil, not adjusted for inflation. That amount was 2.9% of total spending that year. For a little comparison, it was about one-fifth of what we spent on food, including eating out. It was roughly half of our budget for health care. Americans even gave a few more dollars to charity that year than to the gas stations.
In 2008, gas prices were much higher, second only to last year. The inflation-adjusted average was $3.44 per gallon and gasoline spending had nearly doubled within our budgets to 5.4% of spending. That’s the biggest chunk of all the years I looked at. The numbers aren’t out yet for 2011.
The latest Labor Department numbers for 2010 show an average annual expenditure of $2,132 on gas. 4.4% of total spending, if you’re wondering. That’s one-third of what we spent on food. It was more than property taxes ($1,814) and health insurance ($1,831). It also surpassed spending on education ($1,074), alcoholic beverages ($412), and footwear ($303) combined! Gasoline also beat out our charitable donations by about $500.
So what does it all mean? You’re spending a lot on gas. You’re welcome for the breaking news.
No one wants to keep putting a larger percentage of their pay toward gas as prices rise, but that’s what many of us do. People nearing their breaking points have some options. They don’t make sense for everyone, though. We can’t all afford a more fuel-efficient car. We can’t always carpool. Public transportation may be impractical, inconvenient, or nonexistent.
If you’re desperate and just can’t or won’t make any major changes to your habits, you may have to just dig a little deeper into your finances to prune some of that discretionary spending. I’m looking at you, entertainment ($2,504) and restaurants ($2,505).
Budgeting websites can help you cut back, and can be great tools in general. HLN Money Expert Clark Howard loves Mint.com. It pulls all of your financial information to give you the big picture, and then helps you set goals and a budget.
Hopefully, you’ll eventually find an alternative to paying whatever gas price the market will bear. And when that time comes, it’s a win-win: extra money in your pocket and a plan for the best way to use it. Maybe you can even buy Fido that awesome dog couch he’s been coveting. You do only spend $600 on him, you know.