So, gas prices are down – What are you doing with the savings?

Let’s forget for a moment the impact that crude oil trading in the $50 range will have on our national economy, federal surpluses or Alberta’s housing prices in the short term.

Gas Pump

We are all saving money at the pumps – and it’s not a small amount of savings. The gentleman who pumped my gas the other night (yes, there are still a few full-service stations!) had to give me change for my $50 bill that I had pre-paid. I was running just about empty, and I was getting change on a $50 bill! It wasn’t long ago that it felt like I was cashing out a Canada Savings Bond every time I filled the tank.

So, if our savings are somewhere in the $30-$50 range for each fill-up, what are you doing with the savings? A recent poll asked that exact question, and here were the responses:

– Pay down debts – 51%

– Enjoy the savings – 29%

– Spend more – 10%

– Look at a bigger vehicle – 5%

– Other responses – 5%

Of course, I like the #1 response. If debt is weighing on the family balance sheet – and we know this is the case with most households in this country – there’s nothing better than taking unexpected savings from one category and applying it to debt owing. That could add up to $2,000 less debt in a year’s time.

And conversely, there’s nothing worse than absorbing unexpected savings by spending more elsewhere – especially if it leads to a less affordable lifestyle when gas prices eventually go up again. [5% of respondents were considering a bigger vehicle – really??]. Having an intentional plan for your money is all about overlaying your personal values and long term goals against your day-to-day spending. If something like lower gas prices means more money in your pocket, take advantage of it… and put it towards something that you will really value.

Now, for those who are living within their means, but who have cut back significantly in other categories to maintain their financial stability, there is nothing wrong with spending some of the gas savings on something that will bring joy to the family.

A new date night a month might be just what you could use. Or perhaps an appliance needs replacing that’s been put off. Weighing the pros and cons of different purchases to do what 29% of those polled responded (“Enjoy the savings”) is also a good ‘intentional’ route – try not to squander it.

Gas prices may not stay low for long, so don’t get used to it. Enjoy it. Apply it against your debt. Thank the gas station manager. Give it to a charity. Have a meal out. Sleep better. And don’t be surprised to be paying $1.20 a litre again in a year or two.

Take control of your finances today.

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