Author Topic: Americans spend 78% of savings on lower gasoline prices  (Read 4002 times)

One Noisy Cat

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Americans spend 78% of savings on lower gasoline prices
« on: October 10, 2015, 08:24:29 PM »
   I'm not really surprised by these findings. But if the last 40 years has taught me anything, it is that a few years from now oil will be over $100 a barrel, a gallon will be $4 at the pump and people will be complaining. I suppose if they are spending 78%, they are using the other 22% for savings and debt reduction. But I was hoping for a lot more.

http://blogs.wsj.com/economics/2015/10/08/u-s-consumers-splurged-with-gas-savings-after-all-study-finds/

Homey The Clown

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #1 on: October 10, 2015, 09:57:19 PM »
How much do lower gas prices actually save people? If they drive a lot they might be saving $75 per month. For people at the top, this isn't going to change their behavior much. For people at the bottom, they were sacrificing in other areas to pay for gas. Maybe now they can buy a few extra groceries. I don't consciously think, "now gas is cheaper, let me save an extra $20 per month." I'm already maxing my 403b, both our Roth's, and mostly funding my wife's TSP. I suppose I could bump her contribution up $10 per pay period, but then am I going to drop it when prices go back up?

SoftwareGoddess

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #2 on: October 11, 2015, 08:28:01 AM »
For people at the top, this isn't going to change their behavior much. For people at the bottom, they were sacrificing in other areas to pay for gas. Maybe now they can buy a few extra groceries.

Or cigarettes. http://www.cbc.ca/news/health/tobacco-cigarette-production-1.3263506

Making Cookies

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #3 on: October 11, 2015, 07:43:53 PM »
Oh I can't wait for the sub-15 mpg vehicle driver complaining about the price of fuel. Of course they lived through $4+ gasoline and then as soon as gas dropped to $2 per gallon, they skipped the fuel sipper car and went for the deluxe gas guzzler. ;)

Of course then they get to be on the evening news complaining how fuel is killing their budget.

What I guess would be the most entertaining would be someone "in the know" to walk up behind them during the interview and explain that he had a fuel sipper car that would be perfectly fine for years yet...

Personally I expect fuel to go back up to it's $3.75 to $4 range if not more within a year or two. It will be a factor in whatever we drive or buy. I could be wrong and it'll stay cheap. That's fine too b/c we are putting the fuel savings in the bank. We're driving less now than we were five years ago by design.

SwordGuy

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #4 on: October 11, 2015, 08:25:59 PM »
How much do lower gas prices actually save people? If they drive a lot they might be saving $75 per month. For people at the top, this isn't going to change their behavior much. For people at the bottom, they were sacrificing in other areas to pay for gas. Maybe now they can buy a few extra groceries. I don't consciously think, "now gas is cheaper, let me save an extra $20 per month." I'm already maxing my 403b, both our Roth's, and mostly funding my wife's TSP. I suppose I could bump her contribution up $10 per pay period, but then am I going to drop it when prices go back up?

I drove a U-Haul truck today.  It cost about $75 to fill it up.   At $4 a gallon that would be $150.   My regular sedan fills up at $24 at $2/gallon.   At one tank per week you are talking over $300 per month from $2 to $4/gallon

CabinetGuy

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #5 on: October 12, 2015, 08:22:06 AM »
I drive an 06 Tundra for work.  Go easy, I'm a carpenter and I need something to haul my tools during the week.  It sits on the weekend.  When gas was 4.00 a gallon, it hurt, but it was a cost of doing business.  Now that it's back down to about 2.09 where I live, I'm saving quite a bit on fuel costs.  And that savings is put directly into the bank to the tune of at a minimum 80.00 a month.  Adds up real quick.

etotheix

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #6 on: October 12, 2015, 09:10:25 AM »
I think for the vast majority of people money in ~= money out, so they'll always spend the savings.

If you budget, then you get to book the savings.  My wife & I budget $180 a month for gas based on our spending over the past year.  Between the record low oil prices, buying at Costco (easy 50 cent savings over the gas station right down the road!), and carpooling when able we've got it down to ~$120. 

Hopefully we're able to keep that track record!  Our driving doesn't really change with the price of gas, 90%+ of our driving is our daily commute.

FatCat

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #7 on: October 12, 2015, 09:26:46 AM »
A lot of people base their decisions of what to do on their available funds. So if it's the weekend and you have no cash, you stay home, eat what's in the kitchen already, and watch TV. If you still have money, you go to the movies or buy something at the mall. It all depends on what the balance says. I can see how people living like this would just spend whatever they saved from gas prices going down. I don't really get it. If I checked my accounts and saw I only had $20 to my name, I wouldn't decide that's enough to go out to a restaurant. But plenty of people live this way. Then when some big expense comes along they act like they couldn't have been expected to be able to pay it.

MrMoneyMaxwell

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #8 on: October 12, 2015, 02:51:46 PM »
For what it's worth, I do not miss the days of fueling up my Honda Civic and seeing $50.00+ on the pump.

runningthroughFIRE

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Re: Americans spend 78% of savings on lower gasoline prices
« Reply #9 on: October 13, 2015, 10:03:02 AM »
How much do lower gas prices actually save people? If they drive a lot they might be saving $75 per month. For people at the top, this isn't going to change their behavior much. For people at the bottom, they were sacrificing in other areas to pay for gas. Maybe now they can buy a few extra groceries. I don't consciously think, "now gas is cheaper, let me save an extra $20 per month." I'm already maxing my 403b, both our Roth's, and mostly funding my wife's TSP. I suppose I could bump her contribution up $10 per pay period, but then am I going to drop it when prices go back up?

I drove a U-Haul truck today.  It cost about $75 to fill it up.   At $4 a gallon that would be $150.   My regular sedan fills up at $24 at $2/gallon.   At one tank per week you are talking over $300 per month from $2 to $4/gallon
I'm confused.  Are you filling up a U-Haul once per week? Where does that $24/$48 per week sedan come into this?