You may want to start saving money now to prepare for the $4 gas prices some experts expect to see, possibly by the summer. That’s according to a new Fortune Magazine article that says U.S. gas prices reach levels we haven’t seen since 2008 before the end of this year.
Why Gas Prices Could Be On the Rise
We have been able to benefit from relatively low gas prices for the past couple of years and with the economy still struggling a bit, no one is looking forward to prices increasing anytime soon.
But as noted by Fortune writer Colin Barr, prices could easily increase, largely because much of the gasoline being produced today costs $105 a barrel thanks to Middle East unrest an overseas economic growth.
Even the government agrees that we could see increase in prices soon. Right now, the average prices sits at $3.15, but according to the U.S. Energy Information Administration (EIA), there is a 1-in-3 chance that prices will break $3.50 over the summer and a 1-in-10 chance that prices will hit $4 over the same period.
Preparing for the Increase
With the economy already in a fragile state, small gas price increases could have a devastating effect on a family’s income. But since it looks as though a price increase is a strong possibility, it’s good to begin preparing for the shift now. Here are a few ways to get this done:
- Add to your gas portion of the budget: Consider adding at least $50 to the gas budget starting in March to help cushion the more than $50-per-month increase you could see in gas prices (if you have a 16-gallon tank or higher) if they jump from $3.15 to $4 by the summer as feared.
- Take advantage of safe investments: You could add money to your high-interest savings accounts or money market accounts to grow a little bit of cash to add to your gas fund.
- Down-size your car: If you’ve been thinking about letting go of your gas-guzzling SUV or sports car, you might consider switching to a more economical vehicle to decrease gas costs, car insurance costs and your monthly car note.
It would be great to dodge the gas bullet and simply see costs remain as they are now (or even decrease). But since it seems we might be headed for increases whether we like it or not, it’s smart to go ahead and prepare for the worst while hoping for the best.
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