Gas prices are finally coming down, but it may be too little, too late. Nearly six in ten Americans (59%) have already cut back on spending since the beginning of the year due to high gas prices, according to new research by Bankrate.com. So even though prices have recently dropped, Americans have reduced their spending on things like vacations and eating out over the past few months.
The average price of a gallon of regular gas is $3.69, according to AAA. That’s down 18 cents in a month.
When the national average price for a gallon of regular gas was $3.96 in May 2011, Bankrate found that 63% of Americans were reigning in their spending due to the extra costs.
“Despite the fact that oil prices are currently near six-month lows, consumers are still clearly feeling the impact of elevated gas prices in an environment of stagnant wages,” said Greg McBride, senior financial analyst for Bankrate.
Higher gas prices become a tough short-term obstacle because there’s no time to save for the extra expense.
“Those most likely to have cut back on spending due to high gas prices are those with lower levels of income and education,” said McBride.
About 71% of Americans earning less than $30,000 a year say they’ve cut back on spending due to higher gas prices, according to Bankrate. Only 43% of people who make $75,000 or more a year say they’ve had to cut back. When gas prices spike, people who are on a tight budget are hit the hardest, because if there’s no practical alternative like public transportation, the only available option is to simply pay for the gas and spend less on something else.
As high gas prices change consumer spending habits, other areas of the economy start to feel it. So although prices have been coming down, finding ways to spend less on gas is always great for your wallet.
Check out HLN Money Expert Clark Howard’s commuter alternatives.