“These prices don’t matter,” consumer Matt Miner says

What’s the point of (sort of) maintaining a blog unless you post the occasional diatribe?  Does anyone but the news outlets care how much gas costs?  I’m being hyperbolic – the answer is obviously yes, but with all the stupid congressional posturing and the hue and cry from every local paper, radio station or 10pm newscast you’d think this was a national tragedy.

And yet – the economy keeps growing; people keep buying cars and consumer electronics let alone clothing or food.  Here are some back-of-the envelope finance facts about gasoline prices:

For the median U.S. Income family (~$45K / year) gasoline should represent less than 10% of their monthly take home income.  Therefore, even a 40% increase in the price of gasoline has only a 4% hit to take home pay.  With a little effort, most people can save an extra 4% per month by omitting other luxuries, etc.  Think about the flexibility and leisure a car affords!  10 – 14% of monthly income is a pittance compared to the value of a car.

But this isn’t even a fair comparison.  Car owners skew above the median income, because there are a large number of people (concentrated in the bottom quartile of income) who simply do not own cars.  A more reasonable income assumption for auto-owners is probably more like $60K / year.  At this income level, gas prices matter even less.

People say that can’t reduce gasoline consumption.  This is baloney.  Anyone (except the most conservative drivers amongst us) can immediately reduce consumption by 5% just by altering their driving habits.  From there, the next step is some light carpooling (2 days per week with one other driver).  This will reduce your weekly consumption by another 10 – 15%.  Hey, already we’ve saved 20%, and with very little effort!  (I do both these things, by the way).

The next step is a more aggressive carpool.  This increases the inconvenience and logistical overhead, but if you expand your carpool to four committed individuals, you will drive only twice per week to work!  You may cut your fuel bill by 50%!  Further, you’ll reduce your mileage traveled, so you can drop the mileage rating on your auto insurance policy (I’ve done this too, saving $20/month on my premium).

Hey – look at that – a little effort offsets ½ the price increase, and a little more effort gets more than the rest.  And you get to stick it to the Mullahs!  Don’t want to take these somewhat time-consuming steps in order to save $100 - $150 per month?  That’s fine with me too, but don’t complain about the price at the pump.  Just acknowledge that you’re buying convenience and that you’re prepared to pay a small portion of your monthly income to do so!