• Home

Lesko: What To Do With Savings At the Pump

Posted:
Jason: What are Americans doing with the money they're saving at the gas pump? Greg Lesko of Lesko Financial has some answers. Greg

Greg: We're paying about a dollar less per gallon of gas today than we were at this time last year. Economists say the average household will see $700 in savings this year.

A recent survey asked people what they were doing with that money. So far, the largest portion are simply covering necessities. Four out of ten households said they are using the extra savings to pay for groceries and rent.

Jason: They're not splurging on luxuries or fun?

Greg: Well, only a small number--14%--were using the extra money for dining out and taking vacations. But those spending on non-necessities were outnumbered three-to-one.

Interestingly, this survey found that spending differed among certain groups: women and parents were more likely to put the savings toward necessities...while men, in general, were more likely to buy stuff.

Jason: How about saving or investing the extra?

Greg: Unfortunately, fewer than one in four people are putting the money to work by saving or investing it. But those with the highest incomes were twice as likely to put the extra cash into savings.

Here are a few ideas for making the most of this gas price bonus for the rest of the year:

Paying down high interest debt such as credit cards would be a good way to use the money. So would starting or adding to an emergency fund. Another good idea? Start a retirement account or add to one you already have, and turn those gas savings into a gift to yourself that’ll keep on giving!