November 12, 2013

Shopping Around for Cheap Gas - Don't Forget Your Time

The other day I was running out of gas and had to stop to fill up.  I usually try to find the cheap option for gas so I had a decision to make.   I know in general which stations are cheap in my area and I stick to those as much as possible.  I had two cheap options in mind.  I could either swing into the grocery store and use their gas station or I could drive a little further and go to Costco.   Usually the Costco is a little cheaper so I figured I could save some money going to Costco.   But the Costco was a bit further out of my way.   The grocery store however was really right on my way and was only a quick stop off the normal track.

I decided to go ahead and just stop at the grocery store.    I figured yes maybe Costco was a little cheaper but driving out of my way might very well cost me more in gas just to make the side trip.  

Was I right?

After the fact I calculated the actual distance I'd have to drive for both trips.  

Driving out of my way to swing by Costco would have taken an extra 2 miles.    My car averages about 22MPG so that 2 miles would have been 1 / 11 of a gallon or 0.09 gallon.    At Costco gas was running $3.10.   So driving those extra 2 miles to Costco would have used 28.2¢ more worth of gas to get there.

Gas at the Costco was running 4¢ per gallon cheaper than my grocery store station.   I filled up with 14.6 gallons so I spent $0.58 more at my grocery store station than I'd have spent at Costco. 

If I had driven to Costco I would have spent 28¢ worth of gas to drive the extra 2 miles but I would have saved 58¢ to fill up there.   That would have been a net difference of 30¢ cheaper at Costco.

Net cost difference : Costco would have been 30¢ less.

No I wasn't correct.  Driving out of the way to Costco would have saved me money even after figuring in the cost of gas to drive the extra 2 miles.

But what about my TIME? ...

When I made the decision to just stop at the grocery store I didn't consciously figure in the waste of time to drive down to Costco.    I didn't stop and think "my time is worth more than that".   My decision was just about "this gas is more expensive, but I'd waste gas to get to the cheaper option".    But I really should have considered the amount of time taken in the equation too.

Driving out of my way down to Costco would have also taken 5 minutes longer.  

 Is 5 minutes worth 30¢ to me?     I'd say yes.  That figures to just $3.60 per hour.   I have a lot better things I could be doing with my time than saving $3.60 an hour.   Even if you figure in taxes thats still below minimum wage level.

Now can I simply cash in 5 minutes of time and get 30¢?    Not really.   5 minute increments of time are hard to cash in.   But if you do this stuff often enough it adds up.   Don't think of it as just 5 minutes that would have been wasted otherwise.   Little bits of time like 5 minutes add up and if you save enough time you get an hour and then with an hour you can really put it to a better use.   Better uses for your time dont' necessarily mean working an extra hour at your job and getting paid an extra hours worth of wages.   I might instead use that hour towards some other money saving frugal tactics.


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