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Thursday, January 3, 2008

Personal Finance QuickTake: $100 Barrel Oil

$100 per Barrel Oil has a lot more to do with your Budget than just your Car or Truck petrol cost. It literally touches Everything you do on a daily basis.

Yahoo Finance had a good article last night talking about some of the potential issues, but it doesn't go far enough. Don't want to be an alarmist but don't forget about these three key areas too:

  • Food - Until they get transporters dialed in, the only way that food makes it from crop, to warehouse, to grocery store is on trucks, planes and boats. Given that Food is a necessity it is easier to pass on fuel surcharges here than most places and it is usually directly passed on.

  • Clothes - Polyester may be called different things then we were kids, but a lot of the microfiber in the world is still partially oil derived.

  • Plastic - Raw plastic pellets is way higher. Expect higher priced toys, CDs, DVDs, etc..

No one is "off the grid" enough to say they don't eat or use plastic, or use most other synthetic fibers. It is all manageable, but it will take even tighter watching of your money and budget.

Just remember everything has consequences, but having a plan in a storm is always better than not having one...


Fiscal Musings said...

I agree and have already noticed food prices and things going up. We ought to have a little wiggle room in our budgets to be able to handle these things. If things are already so tight, we need to start changing things now before it gets any worse.

RacerX said...

That is a Super point and will lead to a future blog entry.

Most of us have a tendency to budget best-case scenarios. If our Grocery bill is consistantly $500, but one time it was $450, e believe that has to be the right number.

I believe that inflation is going to raise its head a bit more than usual this year, probably faster then my next raise.

Better to plan now, then fail later!

Thanks for reading!

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