Personal Finance Advice

I’ve officially reached my limit for how much complaining about oil prices I can take. Maybe it’s because I write for Saving Advice, but I suddenly have people coming out of the woodwork complaining to me about high gas and food prices. Today a friend sent along another one of those emails urging me to refuse to buy gas on a certain day in order to “teach the oil companies a lesson.” This is a close cousin to the email that goes around urging me to boycott the big three oil companies. Neither method will be effective, for several reasons. Briefly (I know you’ve probably heard it before, but it bears repeating if for no other reason than to stop these annoying emails): Boycotting the “big three” doesn’t work because, even those stations that don’t advertise affiliation with “Exxon,” or “Shell,” or whatever are getting their gas from somewhere and it’s probably from one of the big producers. Do you think the gas station owner has an oil well and refinery in back of the store and goes out and opens it up when he needs more oil? Of course not. No gas station is independently producing their own oil so there is really nowhere you can buy gas that your money doesn’t end up in the pocket of a big oil company.

Refusing to buy gas on a certain day doesn’t work either because everyone either buys the day before or the day after the “boycott.” This does nothing to alter the amount of gas or money flowing through the system. The oil producers laugh at this one because they know they’ll get their money, it just might all come on one day.

Aside from their false claims, these emails have one other thing in common: They are both the product of, and perpetuated by, those who would rather complain and look for the easy way out of the oil situation than actually get up and do something about it. It’s easy to sit in front of the TV or the computer and complain about gas prices (and everything related to them) going up, but it’s a lot more difficult and inconvenient to try to mitigate the damage it does to your budget and to try to do your part to end our dependence on oil.

The only way to reduce these outrageous prices is to reduce worldwide demand on a consistent basis over time. The solution is both very simple and very difficult. Oil is a commodity with a finite supply whose price is based on supply and demand. Since demand is at an all time global high and supply is, by most accounts, stable or even dwindling, the only choice is to reduce demand. Yes, we can drill in more places but it doesn’t change the fact that, however much we may dredge up, there is an end point for the supply. The market knows this and prices accordingly.

The sad truth is that even if we in this country reduce our demand we will still probably have to pay high prices because other countries are only increasing their demand. Which makes complaining about it even more pointless. I can assure you that no one in India or China is listening to us complain and, if they are, they don’t care. The only thing they are interested in is growing their own economies and that is, unfortunately, accomplished using oil. You can complain and boycott and send around pointless emails all you want, but you’re only wasting breath and bandwidth. It will not change anything. Oil prices are largely out of our personal control.

The only way to change the situation is to find alternatives to oil while simultaneously reducing our demand for the commodity. The first part of this equation is largely out of your control unless you’re a genius who can develop the “killer app” that does in the need for oil. The job of finding large scale alternatives to oil fall mainly on the legislative and scientific fronts. Until our governments are willing to seriously explore, implement, and legislate alternatives, we’re at the mercy of the oil market for the most part. Unless you’re willing to live off the grid, grow all your own food, spin your own cloth, and walk everywhere, fuel prices will affect you in one way or another and all you can do is try to change your lifestyle and spending to adapt.

If you must complain to someone about high gas prices, try letting your Congressmen know that you’ve had enough and that they need to get serious about finding and requiring the use of alternative energy sources. If they won’t do it, let them know that you’ll vote for someone who will. Your power to change this part of the equation lies in the voting booth. Your Congressmen and legislators the only ones at this point that can make a serious difference in how we provide energy for this country. Admittedly it’s a long shot since most of them make a lot of money from the oil lobby, but it’s got to be better than random complaining on message boards or to people like me who have absolutely no control over anything.

The second part of the equation, reducing demand, will occur quickly once the first part of the equation is solved, but you can take some proactive steps to try to hasten it along. Things like putting solar panels on your roof and driving that hybrid car do make a small difference in the demand for oil and, if enough people take some action, it will make a substantial difference. There are many smaller things you can do, most of which you’ve probably heard before: Drive less, carpool, walk, ride a bike, use mass transit, recycle, slow down when driving to conserve fuel, conserve electricity, use less plastic which is produced with large quantities of oil, drive fuel efficient vehicles, buy reusable things rather than disposable, single use items, consume less unnecessary stuff in general since almost all products use oil in their manufacture and require it for transport to market, buy in bulk to save on packaging, and eat locally grown products that require less oil for their transport.

There are plenty of ways to try to be proactive about reducing your personal demand for oil and the resultant damage to your budget, but these require some change in lifestyle, habits, and thinking patterns. It takes work. For many people, it’s too much trouble. They are so busy defending their current lifestyle and refusing to admit that it wasn’t sustainable in the first place that they will change nothing about their lifestyle, even if it results in financial hardship. When people complain to me, I often ask if they’ve tried this or that strategy to reduce their oil-related expenses. Ninety-nine percent say, “No, why bother? It won’t change anything. It’s too much trouble for no payoff. I just have to suffer.” No, you don’t have to suffer but you might have to readjust your lifestyle a bit to adapt to a world where high gas prices are the norm. The trouble is, most of us in this country have been living a lifestyle that cannot be supported without cheap oil and, now that those days are likely gone, it’s easier to complain about what is lost than to get busy and find new and better ways to live.

True, changing your lifestyle might not change anything at the national or global level, at least not for a while. But the funny thing is, every step you take to reduce your personal dependence on oil gives you less reason to complain. Conserve electricity and your electric bill goes down. Buy less unnecessary stuff and you save money. Grow a few things in a container garden or shop at a farmer’s market or co-op and your grocery bill goes down. Drive less and your gas bill goes down. Drive a smaller car and your gas bill goes down further. Stop buying individually plastic-packaged everything, buy in bulk, and save money while reducing the amount of oil needed to make all that packaging. Think about getting a job closer to home. Most actions that reduce dependence on oil also save you some money, which gives you less reason to complain about high oil prices. You have a choice. You can complain wile continuing to live as you did in the past and watch your bills increase and your savings decrease, or you can take some action, modify your lifestyle and give yourself less reason to complain.

This is the approach that I have taken in my own life. I don’t like paying high prices so, where possible, I change the way I do things to spare me from the high prices. No, I can’t avoid all price increases. If I had that kind of ability, I could save the world. The things I have to buy at the grocery store are more expensive, as are several other things that I buy and do. But I can change the way I live to mitigate the damage and I choose to do that rather than complain about it. High fuel prices require me to make better choices and be more careful with my money. That’s probably not a bad thing.

Complaining changes nothing. Taking action, even small actions, can change how you, personally, fare during times of high prices. It can also make a difference in the future prices if enough people take the same actions. So please, the next time you’re tempted to complain about rising fuel prices on a message board or to your coworkers, stop and think about how your lifestyle is perpetuating the problem. Maybe the only one you should be complaining to is yourself.

Image courtesy of azrainman