The price of gas has been steadily creeping up and it is only going to get higher as summer comes along. While there is nothing I can do to change the price of gas I can take steps to lessen the hurt on my budget while the prices are still relatively low.
I am preparing for higher gas prices by taking a closer look at my budget. I will be doing two main things to make the summer more bearable when it comes to filling up my tank.
* Increase my gas budget
* Roll over my gas budget
I added a little more to the allowable amount for gas in my budget when I made the last tweak to the budget. This means I can spend a little more and not go into the red based on the fluctuations in the price of gas during the summer months. I did not increase it too much because I do not want to have a huge budget because that might tempt me to spend more.
The second thing I did to control the bite of the fuel on my budget is to roll over my budget on a monthly basis. Some bloggers call this hedging against the fuel price increase but I just see it as a sort of savings account for gas. The way it works is if I set up a $70 budget for gas then I will ‘spend’ $70 every month regardless of the actual cost. So during the lower priced months if I only spend $30 in gas then I have $40 to add to the following month’s $70. If the price of gas doubles, assuming I use $60 the second month then I still have a surplus to roll over to the next month.
Now I will not be tracking this rollover in my spreadsheet because that is too much of a bother for me but luckily Mint has a handy feature that allows you to set a budgeted amount as a rollover every month. This is great for me because Mint actually shows me how much I have rolling over each month and when there is a surplus I can spend more than the budgeted $70 without going over the total. I don’t actually move the money to a separate gas savings account but I know that I have that much more money to spend on gas when the price goes up and then when the price goes down again things will all even out.
I think at the end of the year if I have a surplus in the ‘gas fund’ then I will transfer some of it to the Splurge Fund and some to the Car Fund. I will use the splurge money to get myself a nice Christmas gift and the Car money will go towards the purchase of my next vehicle.