Putting Gas Prices in Perspective

We may be mad as hell about gas prices lately; still many of us have no choice but to take them. According to a 2003 Bureau of Transportation Statistics Omnibus Household Survey, the average American travels 30 miles round-trip during their daily commute. And if that commute is made by way of a vehicle, it could be costing you over $4 a gallon.

Gas Mileage and Costs

In 2008, the Research and Innovative Technology Administration, Bureau of Transportation Statistics placed fuel mileage at 22.6 mpg for the average US passenger car and 18.1 mpg for other 2-axle 4-tire vehicles. But lets face it, I'm willing to bet that unless you're driving a hybrid, compact car, a vehicle that is running at top efficiency, or are avoiding any and all stop-and-go traffic on your way to work, you probably aren't getting the best fuel economy, so let's say for ease of calculating that you're getting 15 mpg.

That means a round-trip drive to work would be costing your around eight bucks, right? So that's $40 a week (a 5-day work week), or $2,080 a year (52-weeks) to get yourself to a job that hopefully sustains your lifestyle and pays your bills.

HOW MUCH?

$2,080 a year in fuel costs just to get back and forth to work sounds pretty ridiculous doesn't it? But before we get too riled up, let's consider a few other expenses we face in our daily lives that might be equally frustrating should we consider them a bit more carefully -- and no, I've never worked for big oil. I'm just trying my best to rationalize the ridiculous price of gas lately.

The following are a few examples from people I know and the amount of money they spend upon things other than gas, which when compared to the cost of fuel, might even seem a bit more ridiculous.

Example #1 -- The family that eats out at a restaurant once per week.

Let's say the average cost for a family of four, drinks and tip included, runs about $100. This amount for 52 weeks comes out to $5,200 a year -- just to eat out at a restaurant with the family once a week!

Example #2 -- The cable bill

This is a personal example, one in which I was at one point spending $110 per month for my cable and Internet bill. That totals $1,320 a year.

Example #3 -- Property tax

Here is another personal example in which I would much rather be paying two grand a year in gas than the nearly $4,500 a year I pay in property tax.

Example #4 -- Vices

No, not vices for carpentry work, I'm talking about the fun kind -- drinking, smoking and the likes.

An associate of mine smokes two packs a day, which at $4.60 per pack, comes out to $3,358 a year. Pair this with his alcohol habit at about another $35 a week and you slap an additional $1,820 onto the vice list cost, bringing it to an yearly grand total of $5,178.

Example #5 -- Credit card interest

A friend of mine has about $50,000 in credit card debt on various credit cards. I'm not exactly sure what the rates are on these cards, but even at a low (low for credit cards that is) 12% annual rate, the interest alone could make the price of gas seem a minor issue. The cost of those cards, without paying down any of the principal would run about $6,000 in interest a year.

Putting Things in Perspective

So yes, while gas is a pretty crappy thing to have to spend money on, it does get many of us back and forth to a money earning job, or the store where we can buy food, or to interviews where we might at least have a shot of gaining income producing work.

There are other items that many of us spend money upon in our daily lives that are just as ridiculous as gas, if not more so when we step back and take a moment to consider how much we spend upon them each year and what they actually do for us.

Sources:

US Bureau of Transportation Statistics. OmniStats. Volume 3 Issue 4. October 2003. http://www.bts.gov/publications/omnistats/volume_03_issue_04/pdf/entire.pdf . June 4, 2011.

Research and Innovative Technology Administration Bureau of Transportation Statistics. http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html June 4, 2011.

More From This Contributor:

5 Websites that Could Save You Money

Valuable Financial Lessons From Mom and Dad

How One Page Simplified My Financial Life

Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.