Is Prepaying for Gas a Smart Thing to Do?

Is Prepaying for Gas a Smart Thing to Do?

Everyone has their own budgeting tips and strategies that work for them. In truth, any approach can work, as long as you stick with it. However, prepaying at the pump was one of the stranger ones I’ve heard recently. Although not entirely convinced this is the best way to save money on gas, is prepaying for gas a smart thing to do for your budget?

Cash-Only Budgeting

The part of this money-saving strategy that I like is setting a strict spending limit. Sometimes this means creating restrictions that will prevent you from going over budget, even if you try. Prepaying for gas aligns very well with my personal habit of using cash only when I’m on a bare-bones budget.

First, I deposit my paycheck into an account that has no debit card so the money remains out of reach for daily use. Then, I only take out enough cash to cover my estimated monthly expenses. Although it was difficult to adjust at first, it made me more aware of where my money was going each month. At times when I literally had no spending cash, it pinpointed some irresponsible spending habits that were undermining my attempts to build savings. The sooner I saw the behavior, the faster I corrected it.

Another reason I prefer using a cash-only budget is that I’m less likely to go further into debt. If my funds aren’t easily accessible, it’s harder to spend. While the “out of sight, out of mind” mentality works to some extent, it has also given me greater control. In the process of learning to live within my means, I’ve also learned to tell myself no when I can’t afford it. This has also taught me greater self-discipline in the long run as well.

Advantages of Prepaying for Gas

From an objective standpoint, there are some financial benefits for prepaying for gas. First of all, it’s standard practice in most places. Gas stations usually require you to prepay, either inside or at the pump, to avoid “pump and runs.” Prepaying means that you’ll never forget to pay or have to deal with legal consequences. If convicted, not only will you still be responsible for the price of the gas, but also service charges, fines, civil charges, suspension of your license, and even jail time, depending on the state laws where you live.

Secondly, prepaying keeps you aware of your budget if you have a set amount to spend on gas. You can prepay the amount you have for each visit, and the pump will shut off once you hit your limit. This means you’ll still spend the same amount on fuel, even when prices fluctuate.

If you continually go over budget and spend more on gas than you can afford, you probably need to rethink unnecessary trips out.  Although I enjoyed my nights driving around aimlessly, it also wasted a ton of gas. For those on a tight budget, you have to find ways to reduce spending every way possible.

Is Prepaying for Gas a Smart Thing to Do?

While some people may find it is a good way to prevent themselves from wasting gas and putting extra miles on their car, this isn’t the best way to save on fuel.

For me personally, prepaying for gas is just inconvenient. For example, sometimes the set amount isn’t enough to fill the tank. So, you’d either have to use a card if you want to top it off, which defeats the point of prepaying. Or, you’ll have to go inside and pay again. Furthermore, if you overpay, you have to talk to the clerk about your change.

In a worst-case scenario, you could find yourself in a dangerous situation. If you run out of gas, you could get stranded without any gas money.

Other Ways to Save on Gas

If prepaying for gas works for your monthly budgeting, by all means, keep at it! However, I have found other methods that are more effective for saving money on gas. For example finding discounts, apps, rewards programs, and other budgeting strategies can add up to very real savings over time.

1. Buy prepaid gas cards.

Prepaid gas cards are a more convenient solution than prepaying for gas with cash every visit. When you get your card, you start with a zero balance. Then, you use only recharge when necessary. This way, you can still determine how much of your budget is set aside for fuel and transportation.

You can get one specific to a gas station, or find a generic credit card that can be used for all your monthly purchases. The advantage of prepaid cards is that they have a built-in brake system to keep you from overspending. Not only are they easy to use, but they also provide several convenient ways to recharge.

2. Join a fuel saver program.

We signed up for fuel saver rewards through our local grocery store. We accrue points from our weekly shopping, which we then redeem for a discount at the pump. There have been times I’ve gotten over $0.50 off per gallon.

Not only was this particular program convenient, but it also had a higher limit on how many gallons we could get with the discounted rate. While some only offer the lower price for 20 gallons, our allows up to 35 gallons per fill.

The other thing you should do is compare the maximum discounts allowed. While ours caps it at a maximum of a $1 discount per gallon, some will allow you to use rewards that allow you to claim rewards that reduce the price to almost nothing.

3. Use gas coupons.

Growing up, I always hated when my mom would pull out her coupon book. Now, I realize how smart she was. Nowadays you can find coupon codes, cashback sites, and credit card rewards that will save you a ton of money on fuel. However, check for expiration dates. You won’t be able to redeem the discounts once they expire.

4. Fill up all your vehicles at once.

Another way to extend the savings is to fill multiple vehicles when you get a discounted rate. This ensures that you claim the maximum amount of savings on each trip to the gas station.

5. Save gas by carpooling.

Another way to reduce your monthly fuel expense is to share it with someone else. If you live near a coworker or can split pickup and dropoff duties with other parents from your kids’ school, carpooling can drastically reduce how much you spend on gas.

As gas prices continue to rise, we are all looking for ways to save. What fuel-saving tips have worked for you?

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