Unless you own a gas company or an oil well, you’re probably not a big fan of the gas prices lately. I paid $5.67 per gallon yesterday and that was at the cheapest station in town!
It’s easy to throw our hands up in the air and decide there’s nothing we can do about the price of gas. While gas may feel like the toughest budget category to cut because we’ve got places to go, I want to show you a simple calculation that will help you reduce your gas spending.
If you’ve seen our most recent budget update, you might wonder why I’m giving advice on saving money on gas. We spent $1,154 on gas last month! But it would be A LOT more if I didn’t take this tip into consideration.
First I’ll show you the simple three-step calculation, then I’ll explain why it matters and how it can save you real money every month! At the end I’ll give you an important warning and then some good news.
STEP 1: Figure the gas mileage your car gets
Do you know how many miles per gallon your vehicle gets? Don’t just go off of what it was rated at when it was originally sold, but the gas mileage it gets now (yes, the fuel economy of a car decreases over time).
First, figure out how many miles per gallon your vehicle gets. If it’s not automatically calculated by your vehicle you can easily figure it by zeroing out your odometer (trip meter) when you fill up. Fill your tank completely (but don’t top it off). Then, the next time you get gas, fill up the tank completely and pay attention to the odometer’s trip meter reading AND how many gallons you put in.
Get out your calculator and do the following equation:
Miles driven / Gallons of gas put in
That will give you the average miles per gallon (mpg) on the previous tank of gas.
For example, if I start with a full tank, then drive 397.4 miles and refill my tank with 19.2 gallons my math would look like this:
397.4 miles/ 19.2 gallons = 20.69 mpg
Repeat this exercise several times to get data for a longer period of time and different driving situations (around town vs road trip, etc).
STEP 2: Calculate the cost to drive ONE mile
Now that you know how many miles your vehicle will take you for each gallon of gas, we’re going to figure how much it costs us to drive ONE mile.
To do that take the price of gas and divide it by how many miles per gallon your vehicle gets (what we figured in the first step).
Current price per gallon/mpg your vehicle gets
For example, if my car gets 20 mpg and gas costs $5/gallon (sadly it’s more than that here), then it costs me twenty-five cents per mile for fuel.
$5.00 per gallon / 20 mpg = $.25 per mile
STEP 3: Figure the cost of individual trips.
When you know how much the gas costs to drive a mile in your car, you can figure out how much any individual trip anywhere will cost you.
(number of miles to destination) x (cost per mile) = one-way trip cost
Don’t forget to double it because you will have to also drive home afterward.
For example, if Sam’s Club is 20 miles away away from you (as it is for me), that would be:
20 miles x $.25/mile = $5
It costs $5 to drive to Sam’s Club, so $10 round trip.
Knowing how much each trip costs you is powerful knowledge.
What you can DO with this knowledge
Knowing how much it costs to drive places empowers you to make informed financial choices. Instead of thinking that there’s nothing you can do about your gas budget, you can decide if each trip is worth the cost.
The key is to think about the cost when you are deciding to make the trip.
Are you driving the right car?
If you have multiple vehicles, figure the cost per mile for each of them to help you decide which car to take. Drive the car that gets the best gas mileage unless you have a good reason to drive your gas guzzler.
If gas were just $5/gallon (crazy that now that sounds good right now), our big van (which gets 12 mpg) would cost $.42 per mile to drive. So that above $10 round trip to Sam’s Club would cost nearly $17 in the big van.
Are you being efficient?
Can you combine the trip with another time you have to go out? Try to not make trips out for just one thing. Plan flexible outings like shopping around firm appointments.
I have this efficiency down to a science. I make sure to bring books and snacks for my kids so that they are prepared to wait in the car for an hour between dropping some kids off and picking up others, to avoid a trip home and back out again.
Is it worth paying for postage or shipping instead?
This goes both ways- whether you are sending or receiving. When you look at the cost of gas, suddenly a stamp doesn’t seem expensive at all. Instead of dropping off a card, drop it in the mail.
Like most people, I want to avoid paying for shipping when I buy something online. One way to do that is to do a store pick-up, but depending on where the store is, that might not be the most economical. The closest JoAnn fabric store is 24 miles away. If my cost was $.25/mile that would cost me $12 to get there and back home. Unless I am already driving by for another reason, it’s cheaper to pay for shipping.
Does other transportation make sense?
Knowing the cost per mile allows you to figure out how other transportation options would compare to driving. Let me illustrate with two examples.
When I first heard that schools charge families for riding the school bus where we live, I thought it was nuts! You have to pay $220 a year for your kid to ride the bus? It was free when I was a kid. But doing the math is actually shocking. There are 180 days of school, which is 360 trips to school (morning and afternoon) and these are all roundtrips because I am dropping my kids off since they can’t drive themselves yet. Each round trip from home to school costs me $3, so a year of driving my kid to school would cost $1,080. Suddenly paying $220 for the year sounds like a sweet deal. The bus doesn’t work for my kids though, because they have sports practice after school and an early morning scripture study class before school.
Here’s another example. Eventually the mom of the Ukrainian family that we are sponsoring will get her license and be able to drive. Currently she rides the bus to her English school every day. The school is 35 miles away. She takes a bus then a train. The school gives her a free pass for the train and we pay for the bus. The bus cost $1.50 per ride, or $3 per day, for a total of $60 per month with 20 school days. If she were driving, using the cost of $.25 per mile (from step 2 above), it would cost $8.75 in gas for her to drive to school. That would be $17.50 per day or $350 for 20 school days a month. When she does get her license, we will encourage her to continue taking the bus to school. She’ll save $290 each month just in fuel costs!
Driving the right car, being efficient, and making informed spending decisions will help you to make the most of the gas in your tank. One decision at at a time, your gas will stay in your tank and your money in your pocket.
Be careful! Small trips add up fast!
The danger of knowing the cost of each trip is that you might look at the cost of a single trip and think, “That’s not very much!” and you will justify more trips because on its own one trip might not look too bad.
That is a dangerous temptation. Look at our gas spending as an example of how little trips add up.
Most of the places I drive regularly right now (school, sports practices and games, music lessons, taking the Ukrainian mom to and from the bus stop) are 6 to 8 miles away. That’s $1.50 to $2.00 each way or $3.00-$4.00 roundtrip. I make that roundtrip 6-10 times a day. That costs $18-$40 per day if I’m driving a minivan that gets 20 mpg (or $30- $65 per day if I’m driving the 15-passenger van that gets about 12 mpg).
Our $1,154 gas spending is made up of a bunch of $3.00-$4.00 trips. They are efficient trips getting 10 people where they need to go, but they still add up!
If zooming in to see the cost of individual trips tempts you to justify more trips, then zoom out and calculate the big picture.
You’ll actually even save more!
In this article I’m focusing solely on the price of fuel. The good new is that by driving less and foregoing unnecessary trips, you’re going to save a lot more than just at the pump.
Driving less will mean more time between oil changes. Your tires will last longer. Your brakes will last longer. The list goes on and on. Factoring in wear and tear on you vehicles may be tricky to calculate, but they are real expenses. Your insurance will also go down if you drive fewer miles.
So even though we’re only calculating the cost of gas per mile, the actual savings will be even higher than the gas alone.
It’s worth the effort!
Have you ever counted calories or logged your time for the mile run? Recording data gives you the information you need to make improvements.
It’s no different when it comes to your budget.
To start lowering your gas spending, grab a calculator and go through these simple steps. Taking the time to calculate the actual gas mileage that your vehicles get will allow you to figure out the cost of driving a mile. When you know how much it costs to drive a mile, you can figure the cost of any trip you make in your car.
Armed with these numbers, you can now compare costs, make informed decisions, and keep your gas costs down! You can do this!