A properly inflated tire will generate less heat from friction with the road, increasing fuel economy and decreasing tire wear. Running tires 20 percent under-inflated -- by 6 to 7 pounds per square inch -- wastes fuel by as much as 10 percent. A tire that is either over-inflated or under-inflated will wear unevenly, and an under-inflated tire loses cornering ability because the sidewall isn't properly stiff.
Also, a tire's load capacity decreases as it loses air pressure. If you are packing your SUV full for the family vacation, you should adjust tire pressures upward to handle the increased load. Those under-inflated tires have more road surface contact and heat up quicker, and may lead to a tire failure.
Properly inflation is based on the air pressure stated on the outer wall of the tire. For example: "31 lbs. PSI cold." This means that the tire should have 31 pounds of air per square inch, before the tire heats up from driving. Once a tire heats up from road friction, the air pressure will read differently. If you are not close to a gas station with air pump, then a hand held air pressure gauge is an inexpensive and helpful tool.
Regardless of temperature, tires typically lose between 1-2 PSI (pounds per square inch) per month. In addition, for every 5 degrees Celsius drop in temperature, a tire will lose another pound of pressure. This means a tire filled to 35 PSI on an 25 C degree day in May could have lost 12 PSI by a 0 C degree day in November. If you happen to be in a city where temperatures fluctuate (like Calgary), keep air temperature in mind when checking tire pressures.