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Last year, global spending on consumer technology devices exceeded $1 trillion for the first time, according to the Consumer Electronics Association. The cost of subscribing to digital services certainly does add up.
According to a 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 17percent of their monthly rent or mortgage payment.
Do you download apps, songs or other products? The AICPA study also 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 all adds up to an average of another $38 every month.
It’s not surprising then that more than half of all Americans think that technology makes it easier to spend money rather than save it. How can you be sure that your technology spending doesn’t add up to some unpleasant surprises? CPAs offer several tips.
It’s a good idea to create a monthly budget that identifies your regular expenses and income and helps 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.
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 for you to set up a separate checking or credit card account for your digital purchases and set email or text message alerts that tell you when you’re near your limit.
That 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 you don’t run up high interest charges.
Once or twice a year, review not only your subscriptions but also 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.
Want more money-saving ideas? Ask your local CPA. He or she can offer smart steps to address all your financial concerns.
Copyright 2013 American Institute of Certified Public Accountants.