You've heard of house rich and cash poor, when your mortgage eats up so much of your income that you don't have money for other things. It means you've bought too much house.
Now families can say the same thing about smartphones, suggests a Wall Street Journal article. It says spending on phone service jumped 4% last year, when the average annual cost was $1,226. However, families with more than one smartphone are paying a whole lot more than that, the story notes.
The article predicts that the pressure of smartphones on the family budget will intensify. It says:
"Wireless carriers are betting they can pull bills even higher by offering faster speeds on expensive new networks and new usage-based data plans. The effort will test the limits of consumer spending as the draw of new technology competes with cellphone owners' more rudimentary needs and desires."
"Think of it as 'iStrain,' or wireless-induced financial anxiety," says The Boston Globe.
The WSJ story gave several examples of families who have cut back on spending for food and entertainment as their wireless bills have climbed. (A poll of WSJ readers showed that only 36% of respondents said they had to sacrifice elsewhere in their budget to afford higher mobile data expenses, which may say more about the income of people who read the story than anything else. And a few, judging by the comments, are people like me, who use a Tracfone and buy a year at a time.)
This raises several good questions, including:
- Why are we so attached to this technology? For some people it's become an essential job tool, but I suspect that's not the case for most of us. Yet, according to the Pew Internet & American Life Project, 45% of U.S. adults and two-thirds of young adults have a smartphone, as do 35% of people with a household income below $30,000.
- Why haven't more people taken steps to reduce what they pay? Are you really using all of those minutes? Why are you watching TV shows on that tiny screen?
A CouponCabin.com survey said 46% of cellphone users pay $100 a month or more, and 13% pay at least $200. Also, 21% spend more on their cellphone than they do for groceries. (These people must eat out a lot, Brad Tuttle of Time concludes.)
"People say 'I have to pay my phone bill, I can't pay the doctor,'" Jay Gonsalves, president of the Action Collection Agency of Boston, told the Globe. "People put cellphone bills right up there with paying the rent."
Has this gotten out of hand? Wrote one reader of the Journal story:
"The world around you has not changed. The sun still rises in the east. The birds still sing and the crops still grow. What has changed is our collective, insatiable lust for all technology. . . . If you have to limit your groceries so you can have a smartphone, you are a fool."
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