I ended last week’s column with a tease about profiting from rising gasoline prices, so, without further ado, here it is:
Invest in gas and oil. The specific investment is between you and your broker, but the concept is to create a hedge against rising gasoline prices: When they go up, your investments make money, and if they go down, you win at the pump.
Other tips for coping with higher gasoline prices:
Drive slower. According to CNN Money, every 10 miles per hour you drive above 60 is tantamount to a 54 cents per gallon price hike. Give it a try: compare your gas mileage at 70 mph to that at 60 mph. An increase of only 5 miles per gallon could save you around $40 per month.
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Check your air pressure. Proper tire pressure not only lowers gasoline consumption, but also helps your car ride better, handle better (and thus safer) and will extend the life of your tires.
Use your GPS to find the shortest route. Take advantage of your smart phone’s GPS to plan the shortest route for your trips. Also try for more Interstate driving. Why? Because stopping and starting sucks up gasoline.
Purchase a motorcycle, scooter or bicycle. The key is to estimate your break even time frame for this purchase. For example, if you buy a $3,000 motorcycle that gets 60 mpg, you would save about $130 a month if driving 1,000 miles with $4 per gallon gasoline. In this case, your break even time is about 24 months (3,000 divided by 130). However, my guess is you would actually be driving the cycle much less, upping the break even time frame to three or even four years. A bicycle is starting to sound like a pretty good option.
For every $1 per gallon rise in gasoline prices, the actual increase in the average budget is only about $50 a month (assuming 1,000 miles a month at 20 mpg). Face reality, make adjustments and enjoy life. You can cope.
JOE PLEMON is a certified financial counselor. Email your questions on personal finance to Joe at email@example.com.