Gas prices are soaring. Consumer stress levels are, too. Do you have a plan to survive the potentially stormy financial climate ahead?
On April 8, the Energy Department predicted that gas prices could reach $4 a gallon this summer, and oil is expected to average $101 a barrel. These two factors are expected to shrink the U.S. demand for gasoline for the first time since 1991. “These projections indicate a narrowing of the difference between the gasoline retail price and the average cost of crude oil,” the EIA said in their Energy and Summer Fuel Outlook report. “It is important to note ... that even if the national average monthly gasoline price peaks around $3.60 per gallon this summer, it is possible that prices at some point will cross the $4 per gallon threshold,” the EIA said.
Whether the daily squeeze on your pocket book happens while refilling your gas tank at the local Exxon (XOM) station or stocking your pantry at Costco, (COST) most likely the pressure extends well beyond your wallet.
One way to reign in that anxiety is to devise a financial plan and stick to it. According to a recent study released by First Command Financial Services, the more consumers save, the more optimistic they feel. And optimism doesn’t come cheap in a recessionary economy.
“Data shows that just by engaging in planning and holding themselves accountable, people improve their attitude about their finances, save more and borrow less,” says J. Scott Spiker, CEO of First Command. “It’s not asking, ‘how much do you want to have?’ but ‘why is money important?’ Getting to the values that underpin that make it easy to keep people focused.”
You don’t need substantial savings to reap the emotional benefits of financial planning. First Command works with “middle America,” a demographic, according to Spiker, that is largely underserved. “Most of the other firms are chasing wealth in the top 3% to 5% of the U.S. We tend to not have folks that come in with lots of assets,” he says.