Wednesday, February 10

Talk & TV: How much is too much?

A post over on MSN Smart Spending had some pretty horrifying figures. Apparently, the average American spends just under $2,000 a year for entertainment and communication: $997.07 for Internet, TV and video game services, $1,000 for cell phones.


Oh, and that $1,000? That doesn't include data plans. The average $83 a month is just for talk time.


It all sounds pretty obscene, eh?


Then I started to do the math. Internet and TV add up pretty quickly. We pay $25 for DSL and $47 for DirecTV. We don't have a game rental plan, but we do pay $40 a year for Xbox Live. That means the average monthly cost is $75.33, or $903.96 a year. Not too far off from the article's $997.07.


On the other hand, our costs end there. Our cell phones are part of a family plan, since my mom needs to have a cell for her work anyway. Each of our lines is $10 plus taxes. And right now, my mom is graciously covering that expense for us, while we try to plow through our debt.


That puts us at 44 percent of the national average. Definitely not bad, but $900 a year is still pretty pricey for anyone.


Of course, our home entertainment costs are high because of my condition. With my energy problems, I can't be very active and outdoorsy. Books are great, but I already read two or three a week, on average.


So we invest in satellite TV and Netflix. From what I've read in the blogosphere, in-home entertainment seems to be one of the main investments for people trying to be frugal. So I guess I could kind of understand the increasing amount -- especially since it only started outstripping inflation since 2008, the year when the economy really started struggling.


So what do you guys think? Is $2,000 a year too much? Is the entertainment expense more or less acceptable than the cell phone costs? How do your own numbers stack up?

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5 Comments:

Blogger Meg said...

Wow! That's the average per individual and not couples?!!

We pay almost exactly $50 for internet each month. We have high speed since we use it instead of t.v. and we often have to download large files for work. We don't buy a lot of books or video games. And we don't go out to see movies a lot (once, maybe twice a year) or rent a lot of stuff, either. Mostly, we get stuff from the library. So, we spend $600 for the internet and maybe another $100-$150 on other entertainment. And again, that's for us as a couple. Not bad, I'd say!

Now, phone is where could spend some money since we're business owners on the go a lot. Fortunately, my husband gets an allowance from his full-time job that covers most of it. We both have Blackberries with unlimited text and data, but he has unlimited voice while I have whatever the lowest number of anytime minutes is (I've never come even close to going over and used like 23 one month). Those plans come out to $180 total and then he may or may not keep a $30 data plan from another company from another mobile device he has for work. So, max that's $2,520 a year (though we pay much less out of pocket). Again, that's for us a couple, though, and we don't have a land line or separate business plans.

So, yes, considering that we're paying $2,520 for THREE data plans, unlimited texting on 2 phones, unlimited talk on one, and some talk on another, and we don't have a separate land line or business line, I wonder how in the heck the AVERAGE American is spending $1000 to talk on a cell. Maybe they should switch to Sprint if they can like we did.

February 10, 2010 at 6:54 PM

 
Anonymous Elizabeth said...

Do those numbers include taxes/fees? (Which tend to add about 15% of the total to my communication/cable bills).
Part of the issue is that these bills, to some extent, are "all or nothing." While I lived in a town of about 100,000 people, I was able to get satellite t.v. for about $35/month. (Without satellite, I only could get reception 1 channel). In my current location, I can't get satellite for logistical reasons, and the same cable package - not premium channels, etc - runs $80/month. Ouch. But it's that or nothing.
Also, "communication costs" can now cover so much more. I upgraded to a data plan on my cell - for an additional $30/month, bringing the total to $101 (includes $15 taxes/fees). The data plan allows me online access to see what times buses will be at bus stops. Especially in below zero weather, if I know what time the bus is coming, I can wait inside, and save the $ I'd probably give in and spend on a cab after freezing outside for 15 min or so, not knowing if I had to wait another 5 min or another 15. So, conservatively, the bus feature saves me $15/month in cab costs...for a net increase to my phone bill of $15. Just saying, figuring out the true costs can be complicated...

February 11, 2010 at 6:46 AM

 
Anonymous Abby said...

Meg,

Don't forget: The $1,000 a year on cell phones doesn't include data plans! My guess is that a good chunk of the $80ish comes from family plans. I hope.

On the other hand, since a lot of people are forgoing land lines or are simply constantly using their cell, I think $80-ish is plausible. A low set of minutes plus nights/weekends will easily run $40. So people who use their cell phones a lot might upgrade to the $60-70 plans. And let's not forget unlimited talk runs around $100, last I checked. (Which, admittedly, was awhile ago.) So you figure for every person spending only $40 a month, someone spending $100 a month will average out to $70.



Elizabeth,

I wondered the same thing about taxes. My guess is that they are included. Most surveys I've taken that ask about cell phone costs ask about after-tax amounts.

Also I understand what you mean about logistics. We were very happy with Dish in Seattle, but couldn't get it in our apartment here. Luckily, DirecTV was able to get us a signal. Otherwise, our cable bill would have been about what you're paying now.

As for communication costs, the $1,000 per year (as I mentioned in the post) doesn't include data plans. That's what's truly scary about it! Still, if you think of the number of Americans who have family plans for themselves and their kids, it's not a huge stretch to imagine such a big bill.

February 11, 2010 at 10:04 AM

 
Blogger Meg said...

Even at an average of $70 a month, though, that's just $840, not $1000. And are people really paying $100 a month for unlimited talk and no data? I wonder which carrier they have because the plans I've seen lately at $100 (give or take some fees) included unlimited data and text. But I wonder how they would divide that up.

And if we're including family plans, then that would actually make the cost *less* per person. Are they actually talking about the average *account* instead? That would make better sense, perhaps.

February 11, 2010 at 10:21 AM

 
Blogger Abigail said...

Meg,

I was using $70 as an example of how easily things add up. To get to $1000 a year, you have to hit a little over $83. Assuming it's after tax, that's $70-75 a month, I'm guessing.

Meanwhile, unlimited talk plans are between $70-100 for an individual plan. Family plans, on the other hand, are more. At Sprint and AT&T, they cost $120 for the first two lines and $9.99 per additional line. So, for a family of 4, that's $140 -- or about $70 per parent. (And you'd want unlimited. Most other plans top out at about 2000 minutes: about than 30 minutes per person per weekday for a family of 3.)

Between that and people increasingly getting unlimited minutes so they don't have to worry about overages... It's pretty obvious how we're getting $83 per person for cell phone usage.

February 11, 2010 at 11:22 AM

 

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