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Fill Up on Financial Wisdom at Gas Stations

Jeffrey Strain

Beyond selling you fuel, your local gas station can also teach ways to save money. You just need to pay close attention at the pump.

With average gasoline prices at more than $3 a gallon, most people look at the gas station and wonder how they can save (or not waste) save a little cash.

Wonder no more. Here are valuable personal financel lessons you can pick up at your local station:

1. Small Amounts Add Up

Small amounts, over time and when pooled together, can add up to a hefty chunk of change.

Have you ever wondered why gas prices are marked in 9/10ths of a cent? That's because that extra 9/10ths of a cent adds over $1 billion a year into the pockets of gas station owners.

The same is true (granted, on a small scale) with the loose change you bring home everyday. Look at your change at the end of the day as your 9/10ths of a cent, save it and let it grow. If you save a dollar a day from the time you're 25 until age 65 in a Roth IRA that earns 8% a year, you'll retire with an extra $94,555 in your account.

2. It's Good to Have Multiple Sources of Income

Gas stations don't make all their money by selling only gas. Many stations also have convenience stores where you can buy food, drinks and other impulse purchases. Some offer car services such as changing tires, oil changes and car repair.

What it all says is that instead of relying on a single source of income, they derive income from a number of different sources.

In the same way, you should look at ways to expand the number of income sources you have beyond a single job. Starting a part-time business doing something that you enjoy is a great way to create extra income.

Taking the time to look for additional income opportunities gives you added security that if one income decreases, you still have another that you can rely upon lessening the impact.

3. Fancy Items Aren't Always Better

It's important to remember that just because something comes with a fancier name and costs more, it doesn't mean it's a better value. Gas stations show us this with regular gas and high-octane gas prices.

Except in very specific situations, a higher grade of gas will not make your car run any better of give you better gas mileage for the higher price, although gas stations sell higher octane gas with the impression that it is better. While it is true that some higher-performance car engines need a higher octane level, these are the exception rather than the rule.

Octane levels tell how much the fuel can be compressed before the gas ignites, but it will not improve an ordinary car's gas mileage. Check your driver's manual to find the recommended level of octane.

This can be seen in many of the products that one buys.

Brand-name products don't necessarily perform better with their higher price. Take a watch for example. The $20 watch you buy at the local drugstore and the $10,000 Rolex will do exactly the same thing: tell time.

While the Rolex may have more expensive components than the everyday watch, there is no difference in what the two accomplish.

4. Convenience Comes at a Price

Gas stations that are in convenient places sell gas for higher prices than those that are located in less convenient places. Gas stations that sell gas right off the highway are usually more expensive than those that sell gas a mile down the road.

This is also true with the items that the gas station sells. Since you are already there, the prices for food, drinks and other essentials is much more than at your local grocery or drug store.

You can see this same issue with many of the things you buy.

Prepacked foods can be much more expensive than making food from scratch. Buying dinner at a movie theater rather than going out to eat before seeing the movie will cost you a lot more. Your local convenience store will have prices higher than other stores in the area.

This doesn't automatically mean that it's not worth purchasing other stuff at a gas station. But it does mean that you need to do the calculations to make sure that the added cost is worth the convenience.

5. Cheaper Isn't Always Less Expensive

A big myth about personal finances is that something that is cheaper is also less expensive.

This can be seen when people drive miles out of their way to save a few cents when buying gas. In most cases, the cost of driving the extra distance to get the cheaper gas will end up costing you more in the gas used and wear and tear on the car the get there than is actually saved.

It's important to look at the true cost and not what you pay for an item so that you learn to get the best value for your money. A $5 shirt that lasts only a couple of months isn't as good a value as a shirt that is $15 and lasts for three years.

Look beyond the price and at the overall cost of all purchase made to decide whether something is a good value or not.

6. Maintenance Is Your Responsibility

There was a time when you went to a gas station and you would receive full service where they would wash your windows as well as check your oil, fluids and tire air pressure.

If you want full service today, it means that you will have to pay pay much more per gallon, if you can even find a gas station that offers it.

If you don't, the burden to do the basic maintenance on your car falls upon you and failing to do so can mean paying more for repairs to the car and having to replace parts sooner.

The same is true with many of the things you own. It is easy to not maintain such items as furnaces, air conditioners, major appliances, houses, and even your own health because it appears to be less expensive in the short run.

The truth, however, is that failing to maintain items can result in costly repairs down the road. Spending a little on preventative maintenance will go a long way to saving money and making the things that you own last longer.