I went to Wal-Mart the other day and noticed huge lines at the gas station where a gallon of regular was selling for $3.749.
Cars were lined up 2-3 deep.
It was going to a take a while to get to the pump and fill up.
Not far away there was no line and a gallon of regular was selling for $3.799.
I didn’t need gas that day but my gut old me waiting in line wasn’t worth it.
Then I started feeling guilty.
In these tough times shouldn’t we all be trying to save every last penny, especially on gas, even if it means waiting in line for a little while?
The answer, it turns out, depends on a couple of factors.
Let’s assume a person’s (we’ll call him Mr. Pump) adjusted gross income (after deductions but before taxes) is $50,000 a year and that federal and state taxes take a total of 25% of that.
Mr. Pump’s net earnings are $37,500 a year.
There are 8,760 hours in a year.
Mr. Pump’s time is worth, after all taxes, about $4.28 per hour.
Now suppose Mr. Pump had to wait in line an extra 15 minutes at the cheap gas station to get 12 gallons of gas at $3.749.
That would cost Mr. Pump $44.98 for the gas and ¼ of $4.28 or $1.07 for the extra 15 minutes.
Total cost at cheap station: $46.05.
If Mr. Pump had gone to the more expensive station with no line, paid $3.799 a gallon, and saved 15 minutes his total cost for the same 12 gallons of regular would have been $45.59.
In this case waiting in line an extra 15 minutes didn’t save Mr. Pump any money. It actually cost him $.46 more.
Moral of the story: figure out what your time is worth.
It may not always pay to wait for the cheap stuff.
