So, the Gullyborg put up a great little post about people not understanding what the gas price increases have really meant to them.
I compltely understand this. My wife keeps freaking out about how expensive gas is, then I remind her that it is costing us $3.20 more to fill up our 18 gallon tank (and we go through six tanks a month at 16 gallons per, never draining the tank) than it did a month ago.
$19.20 a month; and we drive about 2400 miles a month, twice the national average.
She keeps looking for places that are cheaper, and I tell her, unless it's more than $0.20 cheaper it's not worth the bother. Ten cents? That's $1.60. If you're so concerned about that $1.60 don't buy the bottle of Mountain Dew.
Hell, lets go back to 2002/3 prices at about $2 a gallon (depending on where you live). We're paying $3.20 to $3.30 a gallon right now for premium (it's a BMW, yes you really do need to use premium in high compression engines).
That's less than $30 a week ($28.80) for us. Sure it's nothing to sneeze at, but it's really not all that much. In fact, adjsuting for inflation it's more like $26.
So it costs us about $105 more a month to drive than it did four years ago, or $1260 more a year; and thats for folks who drive twice the national average. If we were "average" we'd be hit $630 a year.
Again, nothing to sneeze at. If you're poor, $1260 is a lot (and so is $630). Hell, I'm mostly broke right now, and that's a months rent (we've only been bringing in about $2000 a month since february, which is why we're so broke - the new job will of course more than make up for that)... but in the grand scheme of things, thats not really so much.
Our cost of living for two adults and two children aged four and two breaks out to about $3000 a month... actually doing the numbers its about $3250, but thats rounding everything up to the nearest $100 to add in padding for randomness, and lets just add another $250 a month for "everything else" to bring it up to $3500. Also we are somewhat atypical in that our car is paid for, and we have no credit card debt.
Rent is a little less than $1300
Food for a family of four is about $600 (and thats including feeding a bunch of friends all the time and eating out a bit)
Gasoline is about $300
Electric is about $200
Water (including sewer and garbage)is about $100
Insurance is about $200
Natural Gas is about $100
Cable and internet is about $100
Phone and Cellphone is about $100
Other random monthly bills run up to about $200 (water delivery, memberships, news paper etc...)
Everything Else is about $250
Okay so gas is our third largest expense per month after food and shelter, but still only about 8% of our monthly expenses. If theres a 50% increase in the price of gas (as there has been since 2001), it becomes 12% (assuming monthly totals ,remained constant and they wouldnt but I dont feel like doing out the math. It's only a percent or two either way), still nowhere near the 17% that is food or the 35% that is rent. If we were the "average" family and drove half as much, then it would only be 4% of our expenses.
One should also note that this is about $1500 a month more than my expenses were as a single man living in an appartment; and at that time I WAS driving half as much.
Now as I was saying, gas has gone up 50% in the last five years, BUT if you were making any amount of pay above the poverty line, and if your rate of pay kept up with inflation, then you made up about twice that increase in cost of living raises.
Lets just say that we were taking home exactly enough to cover our bills and expenses and "everything else" at $3500 a month. Thats $42,000 a year, which funny enough is not far from the national median houshold income for a family of four of $44,473, and amazingly enough is EXACTLY the median income for the sate of Arizona.
Funny thing, that's about the exact same situation half of American families are in. They take home just about what their bills and expenses are, including service on debt and a little extra for randomness, plus a 401k which they can't touch. Of course most familaies are also increasing their debt faster than their income, but for most that's a personal decision to live beyond ones means, not a necessity.
Note I say "for most". Sometimes it just happens that you hit a bad spot and you can't reduce your expenses fast enough to make up for it. We've been in one of those spots since February, and we've slashed our espenses, but we also just moved into a new house, so things have been tight. The same could be said of several of my friends, where they had a stable lifestyle, and all of a sudden something changes and they are spending more than they make for a while. It sucks, but it's part of life. Yeah the gas price increases seem harder for them, but again, it's really jsut $20 a month.
Anyway, back to the median family... Also amazingly enough, food costs (as a percentage of income) have actually gone down slightly in most areas. Assuming you rent, or own your own home and havent purchased a new home in that time, your housing costs wouldnt have gone up much more than the difference, and may not have gone up at all, or even gone down (depending on where you live, average rents have been decreasing relative to income as more people buy homes). Of course if you bought a new house in the past few years then your housing costs almsot certainly went up (possibly way up), but then again your net worth probably went way up as well.
Yeah, I'd say that if you got a basic inflation indexed cost of living raise you'd pretty much be in the same spot you were four or five years ago.
Of course people don't want to be in the same spot, they want to be gaining; but if you're only getting COL increases over five years, you are either in the wrong job, or you dont really care very much about getting ahead.
Now again this is talking about the median family. If you have a very low income, and you drive as much as we do, you're pretty well screwed. Your expense percentage on gas is much higher, so every penny increase makes a huge difference to you.
But if you're the median family, which by definition half of us are better off than; and by statistical distribution it is likely that a lot of us are very close to even if we are under it... well then even a $0.50 a gallon increase doesn't REALLY mean all that much to you.
Of course it FEELS like you're getting ripped off don't it?
