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Gas prices have dropped significantly at the pump in the last month. I tell you how to take the money you save and make it work for you. I explain how to do it painlessly.
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Gas prices, they've been dropping
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significantly in the last month, as you
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can see in this chart here.
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That means more money in your pocket.
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But what are you doing with that extra
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cash? How about investing?
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So, if you're driving, say, for example,
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12,000 mi a year, that's almost $1,000 a
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year savings just right there. But gas
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pumps don't give refunds. So, how do you
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capitalize on those savings?
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Create a plan. Where does that money go?
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You know, you have to decide, does that
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go to more of a Roth contribution or
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higher contribution? Does it go into
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some kind of an account to preserve for
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an emergency fund, but you have to
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proactively decide where that money
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goes.
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Ideally, you want to put that extra cash
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in a place where it not only can be
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saved, but also can work for you.
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Ultimately, we love to see people put it
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into some kind of account that's
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generating some interest because that's
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how it's going to compound. Like for
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example, if you're able to get a 10%
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rate of return, your money should double
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in 7.2 years. That's called the rule of
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72. Uh so if it was a 5%, then it would
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be 20 years. Training yourself to pay
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yourself needs to become a habit. And
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really, it's a habit that you can
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develop in just under 3 weeks. you take
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that money, pick a day of the month, uh
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15th of the month or whatever your pay
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period is, and just force yourself to
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start small and create that habit. And
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then over time, you'll start to see the
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benefits. Resist the urge to fritter
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away that extra money on things like
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that fancy high-end cup of coffee or
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other little goodies that you can really
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do without. Now, admittedly, your gas
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price savings will start small, but if
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you keep at it, they will continue to
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grow significantly, and over a year's
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time, you'll have a considerable chunk
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of change, which you then can keep
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adding to. Working for you, I'm the
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consumer guy, Steve Bridget.
Autos & Vehicles
Financial Planning & Management
Investing
Asset & Portfolio Management