Drivers are monitoring gas stations and consulting websites to find the lowest available gas prices in their area. Canadians will drive a few extra blocks, or even several kilometers, out of their way to save money on gas, even if it’s just a few tenths of a cent per litre.
Related: 35 Ways To Save Money
It seems there are few things more satisfying than buying a tank-full of cheaper gas.
Save Money On Gas
With gasoline prices over $1 a litre, it’s time to review some ways to save money at the pumps. Here are 20 tips to save money on gas:
Driving habits
- Ease off that lead foot. Rapid acceleration from red lights and hard breaking increases fuel consumption by 37% – not to mention the five-fold increase in toxic emissions.
A car consumes the most gas as it accelerates. Keep your ride smooth. Keeping a little more distance from the car ahead of you allows you to hold your speed steady without having to step on the brake all the time (unless everything slows down).
Related: How To Save Money By Going Green
- Don’t idle excessively. I know we all like to get into a warm vehicle on a cold day, but excessive idling wastes a lot of gas – and can be hard on your engine as well.
Experts say that if you are going to be stopped for more than 10 seconds (except in traffic) turn off the engine.
Driving around town
- Plan and combine your trips. Several short trips taken from a cold start can use twice as much fuel as a longer multipurpose trip covering the same distance.
- Pick a better route. Avoid heavy traffic and lots of traffic lights. The shortest route is not always the most fuel efficient if you have to stop all the time.
- When commuting to work stagger your work hours to avoid peak rush (or better yet, telecommute) if your employer permits it.
- Reduce weight. Empty out the trunk by removing heavy items you don’t need – golf clubs, etc. This affects smaller vehicles more than larger ones.
- Reduce drag. Why are you driving around with that full ski/bike/luggage rack on your roof if you don’t need it? Loaded roof racks decrease fuel efficiency by 5%. Place items in the trunk whenever possible – but only when you need them.
Travel
- Slow down on the highway. The speed limit on most Canadian highways is 100 – 110 kph. Motorists who keep to that speed find that they are passed by most of the traffic – but they will have better gas mileage. It takes 20% more fuel to go the same distance at 120 kph than it does at 100 kph.
- Use your cruise control (sometimes). On the flat prairies, using your cruise control will save an average of 7%. However, on hilly terrain it’s more fuel efficient to let your speed drop going uphill and build it up again going down the other side.
- The first gas station you encounter after a long stretch is almost never the cheapest – everyone pulls over to full up as soon as they can. If possible, drive a little further to find a cheaper station.
- Are we there yet? Getting lost while driving in unfamiliar areas could lead to an expensive waste of gas. Plan your route.
Don’t skimp on car maintenance
The days of back-yard mechanics are long gone. Newer vehicles are so complex that most repairs and adjustments are better left to those who are trained.
Related: How Often Should You Service Your Vehicle?
Often the only time a driver takes his or her vehicle in for service is when the “check engine” light comes on. You should check your manual for the recommended service.
- Keep your engine properly tuned.
- Use the correct grade of motor oil. The wrong grade may increase friction in your engine – it gets hotter and uses more gas. Change the oil at the recommended times.
- Keep tires properly inflated. Proper tire pressure for your vehicle is usually found on a sticker on your driver’s side doorjamb. Check your tire pressure regularly, especially after a sharp drop in temperature. Each tire that is under inflated by 2 lbs per square inch causes a 1% increase in fuel consumption.
- Don’t drive around all summer with snow tires on.
Drive less
- Walk or bike. It’s good for your wallet and your health.
- Use public transit if convenient.
- Car pool. Not only will this save money depending on how many are in the car, there are other advantages too. Conversation keeps drivers alert. In areas with HOV or car pool lanes they won’t spend as much time in traffic idling, get better gas mileage – plus get home sooner.
Drive a fuel-efficient car
If you are in the market for a new car, consider fuel efficiency. Even if you don’t want a hybrid or electric car go for the smallest version of the vehicle you are considering.
Related: What You Need To Know Before Buying A New Car
Most people who drive 8 cylinder, all-wheel drive, off-road vehicles rarely do more than commute a few kilometers to work or shop – on well-paved roads.
Be wary of gasoline saving devices
When gas prices rise consumers often look for ways to improve fuel efficiency. Many companies will try to sell you mileage-improving devices and fuel additives.
Some claim that they will save you 10 – 50%. Be very skeptical of these claims and consumer testimonials. None have been proven to effectively save money on gas.
In conclusion
We probably will never see really cheap gas ever again (even in Alberta). By changing your driving habits you can improve your fuel economy by up to 37%.
If you are willing to change, you’ll find many related benefits too – no speeding tickets, greater safety, lower repair bills.
Combine several tips and perform routine vehicle maintenance and, in the long run, you will get considerable savings.
Conventional wisdom says that when it comes to investing for retirement your exposure to equities should equal about 100 minus your age.
That means a 30-something should have up to 70 percent of his or her portfolio in equities to help maximize investment returns over time.
Related: Building Your Investment Portfolio
As you get older you’ll dial back the risk so that when you’re close to retirement age you’ve reduced your equity exposure to about 30 percent of your portfolio.
All GIC Portfolio
But personal finance author and chartered accountant David Trahair says you can retire well enough without putting any of your money in the stock market. Instead, he suggests the best place for your savings is in ultra-safe GICs.
Trahair’s retirement solution is simple. Pay off your debts quickly, live within your means, and don’t make the type of investing mistakes that can derail your retirement plans.
That means avoiding high MER mutual funds and volatile markets that can lead to irrational behaviour – like selling when markets are falling and buying on market exuberance.
Related: Do Stock Market Cycles Influence Your Investment Behaviour?
It’s hard to believe in this low rate environment, but GICs have held up remarkably well against the stock market over the long haul.
| Time frame | S&P/TSX Composite Total Return Index | GICs |
| 10 years to Aug 31 2009 | 9.41% | 3.35% |
| 20 years to Aug 31 2009 | 8.86% | 5.11% |
| 30 years to Aug 31 2009 | 10.76% | 7.28% |
| 40 years to Aug 31 2009 | 9.77% | 7.71% |
| 50 years to Aug 31 2009 | 9.80% | 7.35% |
Not only are GIC returns competitive with the overall stock market returns, they do so without the risk and without the fees that come with investing in equities.
- You’ll never see negative 30 to 50 percent returns from a GIC like you can with the stock market.
- When you take out the 2 percent MER from a managed fund you’re down to near GIC territory.
- To get the total market returns you’d need to be invested 100 percent in equities, which is unlikely.
Avoiding Mistakes
According to Trahair, your emotions can have the biggest impact on your investment returns.
Were you able to hold on when your equities lost almost 50 percent of their value between June 2008 and March 2009?
Related: How Index Funds Compare To Equity Mutual Funds
Can you avoid the story stocks (Nortel, RIM) and IPOs (Facebook) that can quickly sink your portfolio?
So can you succeed with an all-GIC portfolio?
This strategy makes sense if you’re the sort of person who’s still putting money in high MER mutual funds and you’re not comfortable investing on your own, or if you absolutely can’t stand the thought of losing money in the market.
You can make up a lot of ground by eliminating your debt (including your mortgage) as quickly as possible and then ramping up your savings as you get closer to retirement.
You could argue that GIC rates are so low that you’ll need to be in the stock market in order to beat inflation. But Trahair doesn’t buy that argument.
Related: Beating Inflation With Rising Dividends
I’m sure if you had $100,000 in 2008, you’d rather have $102,000 the next year with a GIC than have $70,000 in some equity mutual fund.
Besides, if inflation gets out of control it’s likely that GIC rates will also rise to keep pace.
Trahair suggests you avoid market-linked GICs, which claim to capitalize on the growth potential of the stock market without putting your principal investment at risk.
Like a traditional GIC, a market-linked GIC offers the peace of mind of 100 percent principal protection so if the markets go down you’ll still have your original investment.
But the upside is limited to about 4 percent a year, which isn’t enough of a premium over the best 5-year GIC rates, which currently sit at about 2.85 percent.
Final thoughts
Trahair defies conventional wisdom by suggesting most investors would do better with an all GIC portfolio rather than investing in equities.
At first I dismissed this approach as being too conservative and simple to work. But there’s a strong case to be made that the majority of us should protect ourselves from our own mistakes and from falling prey to investment scams and unscrupulous advisors.
Related: Fee Only Financial Planner Vs Commission Based Advisor
Consider that from 1991 to 2010 the S&P 500 Index averaged 9.14 percent a year, but the average equity fund investor earned just 3.83 percent a year.
Our irrational behavior often leads to poor returns because we tend to buy after the market goes up, and bail when it goes down.
We chase the latest trends and pay too much attention to what’s happening in the economy today without keeping an eye on the long term.
A strict diet of GICs is about as stodgy as it gets, but you might sleep better at night with this risk-free approach.
What do you think of Trahair’s argument?
I ran across a great infographic the other day which was originally put together by the BBC. It’s called “Tomorrow’s World” and it illustrates all the advancements that are at least somewhat likely in the next hundred years or so.
I know what you’re thinking, “in the 60’s and 70’s they said I would be driving a flying car by now”, unfortunately this hasn’t become reality yet but a lot of other advances are slowly materializing.
Related: Investing In The Future
According to the creators of this graphic, the odds are 6 to 1 that an immortal mouse will be created by 2015 and 1 in 5 that a digital currency is accepted in the United States. Let’s take a look at a few of these in more detail.
Genome sequencing
By 2014 there’s a 50% chance you can get your genome sequenced for under $100. This is a pretty powerful prediction.
There have been many advances in this area in recent years. Prices started at about $50,000 in 2009 and have come down to around $5,000 in 2012, a 10 fold decrease in 3 years.
While many people may prefer to take life as it comes, I think I’d rather know a little more about my genetic future and be armed with more information.
Just because one may be genetically predisposed to heart issues doesn’t mean that you’ll necessarily have them but it’s good to keep an eye on your health.
Related: How Mobile Technology Can Improve Your Health
Those who like to wear tinfoil hats may think that someone could clone them. To this I say, why would someone want to clone you in the first place? We don’t live in a world of science fiction!
Facebook gets supplanted by another social network
Here’s another interesting prediction; apparently the odds are even that Facebook will be surpassed by another social network by 2016.
Investors in the recent Facebook IPO probably don’t want to think about this possible scenario. Remember Myspace?
Related: Social Media Stocks Tumble
I don’t know about you, but I think Facebook fatigue is setting in for many people. Research was conducted recently that indicates that 27% of users will spend less time on the site in the next year.
Technology tends to come in waves and the Facebook wave will have to end sooner or later.
Arctic free of ice in summer
Depending on your point of view, the 3 to 1 odds of the arctic being free of ice in the summer by 2016 could be a good or a bad thing.
In my opinion, this will be one of the biggest world developments of the next decade or two.
Canadians have a huge vested interest in the arctic and the topic will only heat up with time, pun intended. Could this be the makings of another gold rush?
Related: How To Invest In Gold
I wonder how many companies are already developing preliminary plans to explore the vast tundra for resources to extract.
Sky high buildings
Am I alone in thinking that the architects who come up with the plans for mega towers are all men? According to the graphic, there is a 2 to 1 chance that the world will sport at least one structure that is 10km tall by 2050.
Buildings have been getting taller and taller as the years progress. It seems someone has taken the heights of the world’s tallest towers by date and estimated their growth potential over the period between now and 2050.
What would one look at from the height of several kilometers? I can’t imagine there would be much to see given the distance from the ground, cloud cover and visibility!
Establishing a base on Mars
One of the farthest out and least likely events to occur will be for humans to establish a base on Mars by around 2060.
Odds are not in our favor at 33 to 1 that we’ll have a footprint on the red planet. As far fetched as some of these predictions are, I really hope the odds turn in our favor and this event occurs.
Related: Why We Aren’t In A Post-PC World
Being an avid science fiction and technology fan, I would’ve loved to experience the space race and man setting foot on the moon.
My parents can still remember where they were when Neil Armstrong uttered one of history’s most famous phrases almost 50 years ago. I can only hope to still be around for such a pivotal event in human history.
Even with all the challenges we face, our future is very, very bright.
Andrew Martin is a personal finance and investing blogger from Toronto, Ontario with a background in technology and a passion for travel. His blog, She Thinks I’m Cheap aims to help Canadians make more money by sharing facts, stories and advice.