Saudi Arabia's announcement that it would extend its voluntary production cuts through the end of the year sent oil prices back upward this past week. That action serves as a painful reminder to anyone who relies on oil for transportation, heating, or as raw material that we mere mortals are not in charge of the price of that globally critical commodity.
The ugly reality is that you can't control oil prices. Still, you can control what you do about them. There are likely changes that you can make to your lifestyle that can reduce the impact that higher oil prices have on your personal financial situation. These six ideas can help you get through this period of sustained high prices.
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1. Consolidate trips
To the extent you can reduce the number of trips you take in your car, you can cut your fuel usage and reduce the amount you're spending on gasoline. For instance, if you can do your grocery shopping on the way home from work instead of making a separate trip, you can reduce the number of times you run your car and potentially put fewer miles on it, too.
Likewise, if you can run several errands in a single trip, you can often cut back on the total miles you need to drive. That can also reduce your fuel usage and save you money on gas.
2. Carpool
Another time-tested approach to keeping your fuel costs down is to carpool. If you work in reasonable proximity to your friends and neighbors, both in terms of locations and work schedules, then riding together can help save a bunch on both fuel costs and on wear and tear on your cars.
Folks who carpool often report that in addition to the savings, the fact that they have others depending on their availability helps them set clear arrival and departure time boundaries at the office. For those who would otherwise find it difficult to say "no" to those early-morning or evening time slots for meetings, that forced discipline can help drive better work/life balance.
3. Take mass transit
Many urban and even suburban communities have mass transit lines that can get you from somewhere relatively close to your home to somewhere relatively close to your work, and back home again. As long as such transit is available to you and the hours work well with your schedule, you will likely find it a lower-cost alternative to driving yourself to work. That's particularly true once you roll in the costs of maintenance, parking, and wear and tear on your car, on top of the gas prices.
4. Keep your car maintained
According to the U.S. Department of Energy, having your engine properly tuned up can improve your fuel economy by up to 4% compared to an un-tuned car, and properly inflated tires can help by as much as 3%. In addition to the direct fuel savings, the reality is that overly deferred maintenance on a car can eventually turn a small problem into a much bigger one.
5. Drive efficiently
The Department of Energy also indicates that reducing your speed by 5 to 10 miles per hour can improve your fuel economy by 7% to 14%. In addition, practicing gentle acceleration and braking and maintaining constant speeds on the highways can help by as much as 40%.
6. If you can't beat them, buy them
And of course, if you believe that oil prices are likely to remain high, it may make sense to consider investing in an exchange-traded fund (ETF) like the Vanguard Energy ETF (VDE -0.80%). The Vanguard Energy Index Fund invests in a broad swath of energy companies -- from those that explore and produce it to those that transport and refine it. As is typical of Vanguard's index-type funds, it's available with a low 0.1% management fee, meaning investors will get nearly all of the returns of the underlying companies.
On the flip side, if oil prices do come down and your investment in the Vanguard Energy Index Fund loses value, you'll at least most likely have the consolation prize of paying less for the related energy.
Get started now
Regardless of what oil prices do in the future, right now, they're high enough to be noticeably painful at the pump. That makes today a great time to start putting at least some of these six ideas into practice.
