Americans Spend Record on Gasoline in 2011
One of Wealth Wire's main goals is to help you find ways to keep your finances growing and prosperous, but also to make sure you are not losing money you already have...
In 2011, one of our biggest financial burdens came at the gas pump. With record-breaking gasoline prices, American families were looking for ways to consume less gasoline. But when it is all said and done, when we make our lasts trip home for the holidays in 2011, the gas pumps took a heavy chunk of money out of all our pockets. How much exactly?
Well, according to CNBC, the typical America household will have spent $4,155 filling up their gas tanks this year.
This record breaking figure is 8.4% of what the median family earns each year, which is the highest amount in thirty years. This decade's average is around 5.7% of the family budget.
Gas averaged the highest in history as more than $3.50 a gallon this year. And don't think that 2012 will get any easier. These record-breaking prices are projected to increase.
In the past, high gas prices in the United States have gone hand-in-hand with economic good times, making them less damaging to family finances. Now prices are high despite slow economic growth and weak demand.
That's because demand for crude oil is rising globally, especially in the developing nations of Asia and Latin America. But it puts the squeeze on the U.S., where unemployment is high and many people who have jobs aren't getting raises.
One of the biggest reasons for this record-breaking amount families spent on gasoline this year is employment. The annual gas price was only a 28 cent increased average from 2008 --when gas set it's last annual record-- while unemployment was still only at 7.2%, while today we inch closer to a 9% unemployment rate. The U.S. economy is rattled with unemployment and the limited amount of jobs receiving raises. Inflation is still incredibly high, therefore the amount spent at the pump doesn't get you as much as it did in 2008. American's are being hit at every angle and it is showing in our consumer spending and confidence.
James Hamilton, an economics professor at the University of California, San Diego estimates that high gasoline prices reduced the U.S. economic growth by about 0.5% this year due to our heavy oil-importing system (Remember our economy is only growing at an annual rate of about 2% therefore that's a significant amount.) So much money is spent on gas yet it ultimately leaves the country rather than being reinvested domestically with new ventures and jobs.
From LA Times,
“We are at the highest fuel prices ever for this time of year, even though they have dropped a bit in recent weeks,” said Tom Kloza, chief oil analyst for the Oil Price Information Service. “I think we will see prices in 2012 that will break ... records.”
Kloza said Americans are on pace to spend a record $489.7 billion on gasoline in 2011, which is $100 billion more than they did in 2010. The only year that came close was 2008, when U.S. motorists spent about $448 billion on gasoline; that year, the U.S. average peaked at $4.114, but prices quickly declined from those summer highs.
With these prices, the American people are fed up and are looking for ANY way to limit their gasoline consumption. Here are a few tips on how to limit your spending on gasoline in 2012 (the year you'll need it the most).
Ways to Avoid Getting Held Up by the Pump in 2012:
Change your air filters: A dirty and dusty air filter can reduce your fuel efficiency by up to 10-20%, meaning that any clog in it could mean perhaps thousands of dollars you are losing. Changing your air filter is a quick and simple process that any car mechanic can do and should be done every 25,000 miles. Remember to get your car serviced regularly and your filters will be saving you some serious cash.
Inflate your tires: Your car's handbook will explain how much your tires should be inflated. If you drive with tires that are not fully inflated, it can cost you up to 5% in fuel efficiency. Plus improperly inflated tires are one of the main reasons of accidents in bad weather due to poor traction. So inflate them up to limit your gas spending AND car insurance fees.
Reduce weight: Far too many people keep excess weight stored in their car which causes you to use more gas to get your vehicle moving. So clear out that trunk of last weekend's miscellaneous things and lighten your car's weight.
Be easier on your car: No one is looking to race Mario Andretti on their way to work, so aggressive accelerating and quick stops are brutal on your gas efficiency. When you accelerate, your car uses the most gas, so sporadically stomping on the gas pedal to get back up to speed is one of the main reasons for exhausted gas tanks. Try and maintain a constant speed and use your cruise control on flat highways (not for hilly or sloping highways) to make a significant decrease in the amount of times you need to fill up.
Choose a better route: Like the accelerating issues, many have unnecessary stop-and-go traffic for their daily commute. Freeway back ups or city driving lowers your fuel efficiency due to the constant accelerating and braking. Find alternative routes that might not be as direct, but could save you time in traffic and money at the gas pump. Plus we're bet it could be a bit more scenic than staring at the bumper of the car in front of your for hours in traffic.
Turn down your air conditioning: It may be chilly in most of the U.S. this time of year, but remember when the temperature begins to rise, air conditioning systems use more fuel when cranked up. Our suggestion is, if you must cool down your car, turn the AC on low for a little while and then welcome Mother Nature's air conditioning by rolling down your windows (and cranking up the music... there's no financial harm blasting Lady Ga Ga in your car... just social harm).
Consider alternative ways to work: If you live in the city, maybe look for a bus route or bike into work. You save on gas, parking, and potential damage to your car with terrible drivers surrounding your at every turn. Also consider walking. It's healthier and the let's be honest, the absolute cheapest way to reduce your fuel efficiency. A staggering 85% of Americans use their cars to get to work and sadly most of them drive alone, so perhaps look to carpool with others. It reduces the amount of gas you use but the number of cars on the road, therefore limiting traffic. Plus, you don't have to stress after work on getting home as your colleague will man the wheel as your own personal chauffeur (for that day). It's the little things in life that make the big difference, right? That is true to your wallet as well.+6
More like this...Fifteen Reasons for $5 Gasoline
Christian DeHaemer explains the current global oil shortage and why you should expect it to get worse.
Believe it or Not: U.S. Exports More Gasoline Than Ever
The U.S. imports more than half its oil, but due to declining demand, the country is exporting gasoline to the rest of the world at a record rate...
Gas Prices Could Drop 15 Percent
Hallelujah for some good news! Take a look at these charts...
2 Stocks that Could Soar if Gas Reaches $4 a Gallon
Finally the world sees some positive reactions as the European crisis slowly smooths out a bit. The bad news is gas prices could be on the rise...