The Spot Price for barrels of oil has soared in recent weeks due to political unrest in the Middle East. This causes gasoline at the pump to go up in price until the issues are settled.
Californian's have been through this before, when gas was reaching $5.00 a gallon in 2008. Given the rather fickle nature of OPEC controlled countries - the price of gas can go up or down whenever they feel like it. Most of the gasoline that the United States uses actually comes from Mexico and Canada - so these types of price jumps are pure market speculation and panic.
The bottom line is we hear too many consumers that are hurt paying bills and living their daily life when the price of gas goes up. You should never have a budget that is so tight that paying $50 - $100 extra for gas during a month will cause you to not pay other expenses ... but this is all too often the case. People gladly spend $100 a month for an iPhone, Jordan Sneakers, a video game, cable TV or things we don't really 'need' instead of saving that money when we really need it.
Remember to cut back on expenses when you have money so you can have something in reserve when/if daily living expenses go up. The trend over the next couple of years will be for things to get MORE expensive - not cheaper. Think Houses, Food, Water Bills, Rent, Wages ---- all are expected to go up (inflation) in the coming years after a downtrend (deflation). The cost to borrow money (interest rates) will go WAY up in the coming years, as these rates are at record lows and are artificially being held down by the United States Federal Reserve. So don't think you will just charge everything on your credit card either - as those rates are already going up, and will continue to do so.
If a small jump in oil/gas prices causes you to panic about paying bills - its a big sign that you need to cut other expenses out of your life. Sit down tonight and identify things like TV, clothing, eating out, ... ect that you can save money by cutting out of your monthly budget. Doing this over a long period of time will create a nice pile of cash you would have just blown on stuff you don't need/use.
