Here’s how to be happy when gas prices go up by hedging your fuel expense:
- Set a reasonably high gas budget, perhaps 25% higher than your average monthly expense.
- Whatever is left in your gas budget at the end of the month, move to your brokerage account.
- When you have enough money (say $1000) buy stock in an oil company (find out which oil company supplies your most often visited gas station, but the next time buy a different company and so on).
- If you go over your fuel budget just transfer the dividends you’re making back to your checking account to cover you on the months when fuel prices are exorbitantly high. If you don’t have enough cash from dividends, then if necessary sell off some of your oil stock.
Now that you own part of an oil company, you won’t complain about the “evil” oil corporations raising rates. You now partly own that oil corporation–and you’re getting dividends.
Hope that helps.