You can determine the effect of higher gas prices on your household budget with a simple mathematical calculation.
1. Determine the number of miles that you drive annually. Business mileage records for income taxes are often a good source of information, or you can simply record the odometer readings on January 1 and December 31 of the year.
2. Determine the number of miles per gallon that your make and model of car gets. Use your own records, ask your car dealer, search for data online, or read the printed information that came with your car.
3. Divide the number of miles driven (e.g., 16,000) by the number of miles per gallon (e.g., 25) to determine the number of gallons of gas used annually (e.g., 16,000 divided by 25 = 640 gallons).
4. Multiply the number of gallons of gas used per year (640) by the average increase in the price of a gallon of gas (e.g., 0.40 cents per gallon) to determine the increased cost (640 x 0.40 cents per gallon = $256).
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