Monday, June 30, 2008

How Long to Fill Up Your Tank?

No, I don't mean "How long does it take for you to fill your car's tank?"

I mean, "How many hours do you have to work to fill your car's tank?"

There's a calculator at CNN/Money that's supposed to answer this question. But it seems a bit too optimistic — it doesn't appear to factor for taxes, for one thing. Or any other paycheck deductions. Those are pretty serious items to leave out, methinks.

(Heck, it told me I only had to work 1.3 hours to fill up our Accord's tank. No way can that be correct.)

So I built my own Excel spreadsheet to (hopefully) answer the question more realistically:

Hours worked to fill up your tank.

There. I'm much more confident of that figure. In our case, at least 2.69 hours of work would be required to top off the Accord. And with my Nissan truck, which has a slightly smaller capacity, it'd take a bit over 2.3 hours of work.

Pricing by "Hours Worked"

Figuring out any item's price in terms of "hours worked to purchase it" is a pretty good metric. (Joe Dominguez' tremendous book Your Money or Your Life (review) was the first to introduce me to this idea.) In the case of fuel prices, it's a good "hardship metric." Gas priced at $4 per gallon would generally be much more of a hardship for someone earning $10 per hour than it would for someone whose time is valued at $25 per hour. Of course, if that $10/hour person is debt-free, but the $25/hour person is leveraged to the gills ... well, that can change things a wee bit, can't it?

And yes, take-home pay matters much more than does gross income, which is what the CNN/Money calculator appears to use. I don't know about you, but I talk to very few souls who get to use their gross income to pay at the pump.

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— Posted by Michael @ 9:25 AM


I've actually been thinking for a while that something like this is a good way to re-draw the poverty line. If you can drive away your paycheck (if you can drive away 8 hours worth of pay in 8 hours on the road) in a car that gets 30 MPG at 60 MPH, you're officially in trouble.


Nifty spreadsheet. Now if my vehicle only held that few of gallons. Instead I am putting in 21 gallons, at my last tank it was just under 4 hours work to fill my tank! Bummer

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Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
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Savings Goal: $15,000
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