Americans aren't saving from cheaper gas

A customer prepares to pump gasoline at an Arco gas station in Mill Valley, Calif.
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A customer prepares to pump gasoline at an Arco gas station in Mill Valley, Calif.

The majority of Americans are not saving those extra dollars from cheaper gas prices, according to a Bankrate survey released on Monday. (Tweet this)

The study found that only 23 percent of Americans were putting that leftover money toward their savings or investments.

So what are Americans doing with the extra cash? The survey found that 40 percent were using it to pay for essentials such as rent or groceries. Another 14 percent said they were using the money to enjoy themselves a little more, liking eating out or taking a vacation.

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"In a testament to tight household budgets, more Americans spent the savings from lower gasoline prices on necessities than anything else," says Greg McBride, CFA, Bankrate's chief financial analyst. "The percentage of Americans earmarking money for everyday necessities outpaced those using it for discretionary purchases by nearly 3 to 1."

Gas prices have dropped about 28 percent since May of last year, reports Bankrate. That could mean about $700 in savings per household in 2015 compared to 2014, according to estimates by the Energy Information Administration. If that holds true, it would be the lowest spending on car fuel in 11 years.

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Among the findings:

  • More women use the saved money for necessities, compare to men.
  • People who earned the highest incomes were twice as likely to save the money.
  • Democrats were almost twice as likely to spend the money on non-essentials like vacations, compared to their Republican counterparts.

Read the full report here.