How much do you spend on technology each month? Technology, and mobile devices in particular, can make your life easier, but they also add to your regular expenses. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers some insights on technology spending and how to keep it in check.
A Big Expense
The cost of subscribing to digital services certainly adds up. According to a 2012 poll by the American Institute of CPAs (AICPA), consumers spent an average of $166 each month to pay for things like cable TV, home Internet access, mobile phone service, and digital subscriptions—equal to 17 percent of their monthly rent or mortgage payment. Do you download apps, songs, or other products? The AICPA study found that Americans buy an average of five digital songs, five movies or TV shows, two apps, two games, and two eBooks per month. That adds another $38 every month on average. It’s not surprising that more than half of all Americans think that technology makes it easier to spend. How can you be sure that your technology spending doesn’t add up to some unpleasant surprises? CPAs offer several tips.
Set a Budget
Create a monthly budget that identifies your regular expenses and income to help you determine how much you will spend and save. Within that budget, set limits on what you will shell out for digital services, apps, and other content. Are you currently spending more or less than you should be? Use your past and existing technology purchases as a roadmap to help you decide how to set your limits.
Separate Your Tech Spending
It can be difficult to track technology-related expenditures because many are deducted right from your bank account or charged straight to your credit card. It may be a good idea to set up a separate checking or credit card account for your digital purchases, and set e-mail or text message alerts that tell you when you’re near your limit. This approach makes it easy to see what you’re spending and helps ensure you don’t go over your limit. If you’re using a credit card, be sure to pay off the balance each month so that you don’t incur high interest charges.
Only Get What You Need
Before you sign a contract for phone or other services, make sure you understand all the details so you can be sure that you’re not going to be paying for services you don’t really want or need. Review your past cell phone or cable service statements to see what you actually used, and don’t commit to a new service that offers any more than is necessary.
Cut Out the Dead Wood
Once or twice a year, review your subscriptions and your devices, such as e-readers or tablets, to see whether you’re really getting your money’s worth out of them. If you have numerous devices, consider whether you truly require all services on each of them. It might be wiser to drop the data service on one cell phone, for example, and use your tablet for apps and Internet access. Similarly, if you signed up for an online subscription service that you never use, drop it. Also, investigate whether there are new features or bundles available that could lower your bills.
Turn to Your CPA
Want more money-saving ideas? Ask your local CPA. He or she can offer smart steps to address all of your financial concerns. To find a CPA in Pennsylvania by location or area of expertise, ask your family and friends for recommendations or use PICPA'sCPA Locator
Original publication date: July 8, 2013