Friday, May 23, 2008

It's not about the gas prices

The news is reporting people struggling all over the place from the high gas prices. While they have risen quite a bit in the past year I might argue that gas prices form a small amount of the problem.

First of all, yes, you're probably paying $100 or more per month than you used to last year. For some families that has been detrimental and a big stretch to their budget.

Others may need to step back and see where they are really spending their money. If you have car payments at all, you need to get out of them. Sell it and buy something you can afford. If you can't afford to pay cash for a car, then you can't afford that car. Plain and simple. You may need to drive something that doesn't look so nice for a few years just to break that cycle. A while back I sold a car for just $1,000. That's what it took for our family to break the cycle.

Also look at your home. If your mortgage (all of them combined) are more than 25% of your take-home pay, you probably cannot afford your home. You should have a 15 or 20 (at the max) fixed rate mortgage on your home.

Maybe it's time to re-evaluate where all of your money is going. $100 extra a month in gas most likely isn't your problem.

1 comment:

Bruno LoGreco said...

Good point - new to your blog