Isn’t it amazing how the price of gas can make us or break us? We finally got to the point where gas prices started breaking us down. We started dumping our SUV’s, buying smaller cars and completely conscientious about how much we were spending. Now, gas prices have dropped and we can all now start saving money in the bank. I think I will just deposit the savings (about $1.75 per gallon) into my savings account every time I fill up. That has to be worth something by the time it goes up!
Interesting enough, I decided to see how much we really are saving by going to the Bureau of Labor and Statistics to calculate our real savings. Assuming that we are spending $1.57 a gallon in gas during the year 2015, what should we be paying according to the nominal inflation of our U.S. dollar?
In 1980 According to Inflationdata.com a gallon of gas cost $1.22 per gallon, so what is the buying power of that same $1.22 today? Well, it is $3.51 per gallon. If that isn’t very informative, maybe this statistic will shock you. A gallon of gas in 1918 was $0.25 per gallon. That $0.25 has inflated to the buying power of $3.92 today in 2015. So, technically, we should all be putting away $2.35 per gallon away in our savings accounts. This data, of course, is taken from Colorado Springs, CO. current gas prices and a national inflationary calculator, but you can get the gist.
Bottom line, we are all saving money in a big way. Gas prices in January 2015 on an inflation adjusted basis are actually lower than they were during the great depression. So, go spend or invest your savings while it lasts!