Oil prices have been hitting record highs recently. We're feeling the pinch at the pump from this staggering increase as gas prices skyrocket nationally to average around $2.90 per gallon.
So if you're an average driver, you're now spending some $57 to fill your tank with gas, according to the American Automobile Association (AAA). That's an increase of more than a dollar a gallon compared with two years ago. The average U.S. household will spend nearly $3,200 on gasoline this year. How's your household looking?
The Wide Impact of Soaring Oil Prices
It's not just gas prices that are skyrocketing, it's all forms of energy. The natural gas segment of the Consumer Price Index rose more than 50 percent last year -- 68 percent in western cities. Coal, oil, and electricity are also up, so no matter how you heat, cool, and light your home, you're paying more.
When energy prices go up, we tend to sit idle and hope they will go down. But there's nothing in the foreseeable future to suggest that prices will go down this time around. Global demand for oil and gas is beyond anything the world has ever seen. That, coupled with the ongoing crisis in the Middle East, suggests that it's time to really look at what we spend on energy -- both at the gas pump and at home -- and cut back.
So you can complain, which millions are doing, but this won't help your finances at home. Or you can get going fast on a proactive plan to cut the cost of your fuel and energy bills.
While I won't suggest this is easy, some simple shopping around for a better deal and a little belt tightening could save you hundreds of dollars, if not more, by the end of the year. Here are some ideas to help you minimize the budgetary blow:
On the Road
Probably the fastest thing you can do to cut your fuel costs is to drive less. But don't take my word for this. First, look at how much it's really costing you to drive as much as you do now. Then we can look at what to do about it.
1. Know Your Car Costs
You'll be more motivated to reduce your fuel and other driving costs if you know what they are. To calculate:
* The fuel cost of a specific trip in a specific vehicle: AAA's FuelCostCalculator.com.
* A variety of vehicle costs, including fuel cost per year, per mile, per daily journey, and total annual running fees, try this tool from LiftShare.org.
* Monthly and annual commuting costs: CommuteSolutions.com/howmuch.html.
2. Drive Less
I just did a "Debt Diet Makeover" for a wonderful couple named Dan and Sally on a national TV show. I suggested they cut their fuel costs by carpooling to work. This one idea (which they acted on) will realistically save them at least $500 over the course of a year. Here are some great tips to help you rack up similar -- or perhaps even greater -- savings:
* The U.S. Energy Department offers tips http://www.fueleconomy.gov/feg/planning.shtml on planning and combining trips and how to reduce your fuel usage on both commutes and long trips:
* For instant 24-hour access to a pay-per-use car in several large cities that may allow you to get along without a vehicle of your own, try CarSharing.net.
* CarPoolWorld.com offers a free system that connects you with others who live and work near where you do and are interested in sharing rides.
* Locate a van pool in your area that meets your commute requirements at VanRide.com.
* For a free service that connects both commuters and long-distance travelers with a ride going the same way, check out eRideShare.com.
* Publictransportation.org or APTA.com/gasprices offer information about public transportation options in your city.
* To join the walk to school movement, which promotes the activity as safe, healthy, energy-saving, and environmentally responsible: IWalkToSchool.org.
* Save gas and time by shopping locally or online -- ShopLocal.com has information about deals available in your neighborhood.
* For information on telecommuting, including telework tools, resources, and jobs: TelCoa.org and www.angelfire.com/az2/home2.
3. Drive More Efficiently
Squeeze every mile you can out of a gallon of fuel.
* For tips on driving habits that maximize fuel economy: FuelEconomy.gov/feg/driveHabits.shtml.
* For information on vehicle maintenance that can improve fuel economy: FuelEconomy.gov/feg/maintain.shtml.
4. Rent and Save
If you need to make a long trip and don't have the right vehicle for the job, you may be able to save fuel and money by renting.
* Compare rental rates on everything from fuel-sipping subcompacts to high-miles-per-passenger-gallon vans at Orbitz.com or Priceline.com.
* To rent a lightweight, streamlined trailer that holds about as much as a pickup bed but can be pulled by even the smallest car: U-Haul.
5. Trade in the Guzzler
If you must drive a great deal, consider replacing it with a vehicle with high fuel mileage. But weigh the transaction costs carefully against projected fuel savings to make sure you'll actually come out ahead: With gas so costly, you probably won't get much for your fuel-sucking, full-size SUV -- and be prepared to pay a premium for an efficient car. Here are some helpful tools:
* To find out what your current vehicle is worth and for prices of new vehicles, check out the Kelley Blue Book or NADA.com.
* For fuel mileage figures on new models, side-by-side mileage comparisons of specific vehicles, or to search for autos by class, manufacturer, or miles per gallon: FuelEconomy.gov/feg/choosing.shtml.
* For information on new fuel-efficient vehicles: Edmunds.com/fueleconomy or Autoweb.com/content/research/top10/
Energy costs at home add up quickly. Often we just accept them for what they are. This summer, take a close look at the cost of running that air-conditioning unit. Turn off those lights. Find ways to save money.
1. Evaluate Your Energy Use
* To find out if your energy use is above average, try the resources on this Energy Star Web page.
* Hes.lbl.gov offers a Web-based, do-it-yourself home energy audit.
* For a contractor-conducted energy inspection of your home culminating in a recommendation of measures you can take to improve energy efficiency, contact your local utility or check out this page in the Energy Star site.
* The EPA offers a free software download that allows you to calculate how much you will save in money, energy, and reduction of pollutants by making specific energy-changing modifications and upgrades to your house.
* To evaluate your energy use and decide whether renewable energy or energy-efficient products are right for you: www.eere.energy.gov/consumer/calculators/homes.cfm.
2. Seal and Insulate
One of the easiest, least-expensive, and most effective ways to save on heating and cooling is to seal your home from drafts and insulate your attic. This Energy Star Web page offers more information, including a downloadable 22-page, do-it-yourself guide to energy sealing.
3. Install Energy-Efficient Products
Replacing energy-wasters with high-efficiency products gives you the same or better performance and lower operating costs.
* Lighting: Compact florescent bulbs last 10 times longer and consume 66% less energy than standard incandescent bulbs. Replacing a single 100-watt incandescent with its compact florescent equivalent can save you up to $30 over the life of the bulb. Change every bulb in your house, and you'll save up to $275 per year. Find more information here.
* Heating and cooling: Investigate various ways to reduce the largest energy expense for most homes here.
* Appliances: The energy costs to run many appliances exceed the initial purchase price several times over, so it pays to look for those that are most efficient. This Web page offers more information on efficient water heating, food storage, cooking, dishwashing, and laundry appliances, plus information on home energy efficiency in general.
4. Build and Remodel for Efficiency
* For information on energy-efficient home improvement and remodeling, consult this Energy Star resource.
* Buying a new home? Consider an Energy Star home that's engineered from the ground up to save energy.
5. Rethink Your Living Arrangements
* Think small: All things being equal, smaller homes use less energy than larger ones. For information on how to live large in a small house: NotSoBig.com.
* Co-house: This combines the benefits of private home ownership with the efficiencies of shared facilities. Co-housing developments often emphasize energy efficiency and sustainability: CoHousing.org.
For a comprehensive, information-packed site on all aspects of saving energy, visit the non-profit Alliance to Save Energy Web site.
Spend Less and Finish Rich
So here you are: 10 tips on easing the pain of high energy prices. Making some changes in your life when it comes to energy consumption will give you and your family the financial help you deserve.