When I first started driving, I was like any other early driver – I wanted to get where I was going as quickly as I could. If that meant sacrificing a few MPG to do it, I didn’t think twice. Back then, gasoline was much cheaper, I had far more disposable income, and my fuel efficiency wasn’t something I spent too much time thinking about it. Now that I use the car more often, see the pain at the pump each time, I’m more cognizant of how my driving habits affect my fuel use.

Nowadays, I drive more casually. I tend to drive at slower speeds, I’m almost never in a rush, and it’s done wonders for both my fuel mileage and my general disposition. At first, it was tough. It didn’t bother me that trips took a few minutes longer (I hardly noticed), but driving felt a little longer because I wasn’t going as fast. Then I learned to enjoy what was on the radio, enjoy the sights (even if it’s just some trees whizzing by on the highway), and I felt zero anxiety about seeing police cars stopped at the side of the highway (when you’re going at the speed limit or just a few miles over it, instead of ten, you will never get pulled over for speeding). I think it has translated to better fuel efficiency but more importantly, I think I’m calmer.
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One of the fun parts about reading and writing about personal finance and money all day is that you run into a lot of good advice and a lot of bad advice. Over the years, I’m amazed at how much of both is repeated with great regularity.

Whereas some bad advice hurts no one, a lot of money myths are costing some people money (and helping others make a lot more than they should!). So today I’ll be hitting five popular myths that span your entire life, from spices to gasoline, with the hope that it spurs a discussion that helps us all understand why these myths are wrong and why they’re costing us money.

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Every time that a gallon of gasoline starts to approach or break the $4 a gallon mark, you see a deluge of news stories about people running out of gas. They’re stories about people trying to “stretch their dollar” at the gas pump by fueling up less frequently, which is an absurd idea in the first place (running closer to empty doesn’t stretch anything except the time between fuel ups). I can understand why people do it, they don’t like paying the bill when they fuel up, but the reality is that running out of gas hurts more than paying at the pump.

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As gasoline prices continue their upward trend, more and more people are carpooling. That’s a good thing.

The bad thing is that fewer people are fairly breaking up the costs!

Personally, I’ve always felt that as a passenger in the car, I owe more than my “fair” share for gasoline. I inherently understood there were other costs involved in driving, outside of gasoline, but the main reason was because I wasn’t driving. It’s really convenient to be a passenger and so I feel like I owe more than my fair share. On some occasions, when someone else beats me to the punch in pulling out a credit card for gasoline, I’ll give them the money instead (the driver doesn’t know, which I suppose is a negative, but in the end I feel happy having paid at least my fair share). In those cases I try to split whatever they’re paying with them (if they pay more, I have zero problem paying my share of “more”).

What if you want a really fair look at costs? Well, you can go as far as to calculate the total cost of a drive, including insurance, tires, license, registration, and the works.

Back when I was driving a Acura Integra and gas was slightly cheaper, I calculated my “cost per mile” at around 7 cents. It included gasoline, insurance, tires, and a catch-all “everything” category that included windshield wipers and other routine maintenance types of things. (as an aside, knowing this information can help you make more informed decisions – like whether to drive across town to save a few cents on gas)

I personally think it all works out at the end, but if you’re a passenger, you should take the effort to make sure you aren’t taking advantage.

How do you make sure you’re a good carpool passenger?

(Photo: gennie_stafford)

You’ve probably heard about the dirt-cheap gas prices in places like Venezuela, where citizens can fill up for mere cents a gallon. While it might frustrate Americans to know that gasoline is so cheap in some countries, they can take comfort in the fact that there are places where gas is much more expensive. I remember how expensive gas was 13 years ago when I was an exchange student in Europe. What some consumers pay at the pump in other countries far exceeds what we pay here.

But why the discrepancy? It is generally acknowledged that the biggest reason that gas prices vary so widely at the pump is to do with taxes. Many countries impose an excise tax on fuel sales, and, in countries that contain provinces and states, there might be additional taxes imposed at a more local level. Kiplinger recently compiled a list of gas prices around the world, and the top price on their list is Turkey, where consumers pay $9.96 per gallon. The lowest price on the list is Venezuela, where gas is $0.08 per gallon.

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With global turmoil continuing to threaten higher gas prices — especially with the summer driving season just around the corner — it is little surprise that many people are looking for ways to save money on gas.

Indeed, as gas moves toward the $4.00 per gallon level that many think is inevitable, increasing fuel economy becomes even more important. We want to be able get the most for our gas station dollar. It is tempting to believe that you can do a few simple things and then find yourself raking in the savings. The truth, though, is that some “conventional” wisdom about saving money on gas is outdated. Or even downright false. Here are five gas saving tips that probably won’t do much in terms of saving you money at the pump:

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One of my friends absolutely loves his Penn State-branded American Express card (I think it’s a “skinned” AMEX Blue card) because he gets to earn “points” towards various Penn State-related products and services. An example is the annual Alumni Association Annual Membership which is available for 7,100 points. Sometimes I think he gets amped up seeing Joepa on the face of the card.

It made me wonder whether these types of loyalty credit cards are worth it. The ones that most immediately come to mind are the gas station credit cards where you get higher cash back or reward points when you use it at their gas station.

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Have you seen all the Toyota Prius commercials lately? The ones with the people dressed up as foliage and climbing on top of one another? It was to highlight how “green” the vehicles are and announce that Prius was launching another generation of the hugely popular hybrid-electric. At first, my wife didn’t even realize they were people and I, to this day, think it’s just a little bit creepy.

However, despite the creepiness of the ads and the whole slew of new hybrid-electric cars, I still would love to have a Prius (or a Tesla!). The only problem I have is that it’s not a financially sound decision. It’s an emotional one (which is fine too!).

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If your car calls for 87 octane gas, you only need to put in 87 octane. You won’t get any benefit by putting in a higher octane and it will only cost you more. If your car calls for premium gas, put in premium gas. You can do damage to your car if you put in a lower octane and you’ll understand why in a moment.

Most cars have a four-stroke gasoline engine where the strokes refer to the cylinders moving up and down. One of the strokes is what’s known as the compression stroke. The piston compresses a mixture of air and gasoline before it is ignited by a spark plug. Octane rating of gasoline refers to how much that gas and air can be compressed before it spontaneously ignites, the lower the octane the less it can be compressed before igniting. Premium gas can be compressed far more than regular gas.

Why you should only buy what your car needs. If your car calls for 87 octane gas, that means it’s going to compress that air/fuel mix to a point where 87 won’t ignite on its own. If you pay more and add in 89, you get no benefit because it’ll only compress that mix to the 87 level. You get no added benefit because your engine can’t take advantage of the higher compression ratio.

Why you shouldn’t skimp and buy a lower octane than required. Your engine operates most efficiently when that air/fuel mix explodes when it’s supposed to explode. The whole timing of the engine is fouled up when it explodes early and that’s what happens if you put regular gas into an engine designed with premium in mind. When 87 gas is compressed to 91 levels, it’ll explode prematurely and foul up the timing of the engine (this is known as “knocking”).

Why people think higher octane is better. Because it is better! If all other specs are kept equal, an engine with a higher compression ratio will have greater horsepower. However, you need an engine that is operating with the higher compression ratio. If you have an engine compressing for an 87 octane fuel and you put in 91, nothing changes except you’re a little bit poorer.

Gas prices have come down the last few months (whew!) but you aren’t doing yourself any favors by getting fuel your car isn’t designed to use.

(Photo: riza)

I don’t know about you but every time I heard oil prices falling, I grin from ear to ear. I like free markets if they are operating in a healthy economic environment (which means I’m cool with the bailout of banks, but I’m not cool with talks on bailing out GM, though I understand why) but those OPEC nations were taking it too far. I wrote about how OPEC hates us and how they were decreasing supply to “cope” with sagging demand. They got used to the high prices and now that demand is falling, they want to keep the high prices. That’s just mean.

So, what can we do? Hit them where they want to hit us, in the money sack. We must use less gas.

The lesson here, which we should’ve learned in the 70′s, is that OPEC should control our destiny. Say what you want about offshore drilling or alternative fuels, that’s for the pundits and the policy makers to figure out for 2015… I’m going to continue to do what I can today – use less gas.

Five Ways to Screw OPEC

1. Regularly maintain your car. Getting regular checkups, regular tune ups, and regular oil changes will improve your fuel mileage and increase the lifespan of your car. The myth about the 3,000 oil change is a myth, you can follow whatever your car manual says for your type of usage, but you still need to get that changed. As for the 30,000 and 60,000 checkups? Do them. Tune ups? Wonderful for gas mileage as you replace things that have been worn down. Don’t be penny wise and pound foolish with your car because the day you take it for granted is the day it reminds you that you shouldn’t.

2. Check your tires regularly and rotate them. Rotating the tires maximizes their lifespan. Keeping them properly inflated maximizes your fuel efficiency and maximizes their lifespan. Those two simple things will reduce how much gasoline your car consumes and how much oil is used to produce the rubber for your tires. Use less, OPEC complains.

3. Carpool to reduce driving. I feel like a broken record (can I even use that analogy anymore?) but carpooling and efficient trip planning has to be the easiest way to save gas. My wife and I try to plan our trips such that we minimize how much driving we do and it makes for a fun mental exercise.

Did you know that if two separate people are meeting at a point between them, it’s always better for one person to pick up the other person first as long as they return to the same place? If my wife is leaving work and I’m at home, it’s better for her to pick me up if we plan to go out for dinner than for us to meet each other at the restaurant. I didn’t think it was intuitive but if you draw it out it makes very obvious sense. (if the meeting point is equidistant to both then it’s equal)

4. Learn how to hypermile. Hypermiling is changing your driving behavior so that you maximize your car’s fuel efficiency. The basics are quite simple, you want to brake as little as possible, accelerate as slowly as possible, and travel as slowly as reasonably possible. Realistic hypermiling are a few suggestions I feel are both effective and realistic in our current driving environment.

5. Buy a bike. My wife and I bought bikes earlier this year and we use it to get around our area fairly easily. This may or may not be feasible for you given your neighborhood but it’s something you should consider. If not a bike, then investigate how you can best utilize mass transportation in our area. The key here is to ditch the car and try something fun and different.

Now say it with me, “Down with OPEC! Down with OPEC!”

(Photo: jfabra)