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Are you smartphone rich and cash poor?

The cost of owning a phone is consuming more of people's household budgets, prompting some families to cut back on other spending.

By Karen Datko Oct 1, 2012 7:13PM

Frustrated woman with mobile device © Jacqueline Veissid, Photodisc, Getty ImagesYou'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:

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."

 

More on MSN Money:

9Comments
Oct 2, 2012 8:06PM
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More proof that our society is growing more stupid.  People will buy a fancy phone just to be able to carry it around.  Nobody has the sense to think that they can't AFFORD it...they just know they WANT it.  I am so tired of people walking around on their cell phones all day long talking in public places while the rest of the world has to listen to their conversations.  As if they are so busy or important to make phone calls in private.  Just arrogant and rude...PUT YOUR PHONE down and show some class.
Oct 16, 2012 12:13AM
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I've been using Net10 since 2005 when I got my first cell phone ever through their company.  I think cell phone prices and plans are absolutely insane and I refuse to pay for it.  I would rather enjoy life and have experiences than pay for a smartphone.



Oct 24, 2012 8:27AM
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This article confirmed what I believed all along, most smartphone users are fools.  Unless you need if for your job they are a colossal waste of money.  To put a cell phone bill before essentials like food or rent is so incredibly ridiculous it's almost hard to believe people do it.  Trust me people, you can live without smartphones.  Watching TV on a phone?  You have go to be kidding me. 
Oct 24, 2012 4:10AM
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I really didn't need a cell phone, I've lived 60 years without one which allowed me to invest the money instead.  These savings will allow me to keep up my standard of living in my retirement.
Now that I'm retired with plenty of cash I decided I can afford a cell phone but put a limit how much I'm willing to spend.   $100 per year is my limit, and I found the credits for not using the phone as often as I thought has build my credit to 4 years worth of calls.
It's utter insane to listen to someone who is short on his rent or complains he can't afford to take a vacation while all along blowing thousands for the privilege to carry a 7" toy around.  I agree that the cell phone is proof Americans are growing more stupid by the day.

Mar 14, 2013 11:17AM
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my phone is OFF at bedtime. people have from 7a-9p to call -- 14 friggin' hours. if ya can't be bothered to reach me in that span of time, screw ya.
Aug 10, 2013 3:10AM
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Who's the dummy?  Obama didn't give me a cell phone, the phone company did.  It was an internet special.   Their loss though.  I hardly use a phone these days.  I got my Motorola flip phone from T-mobile about five years ago.  I buy a thousand minutes for $100 dollars which is  good for a year.  The next year I still have 500 minutes so I buy $15 more, get 15% more minutes because I went gold with my $100 purchase the year before, and the remaining unused 500 minutes get extended another year because I bought more minutes before the original minutes expired.    The cost works out to a little more than $60 a year, or about $5.00/month on average.  Why anybody would spend more than that for a gadget is beyond me.  To think that some people pay as much as $200/month for their smart phone is particularly annoying when they fiddle with it in the grocery line ahead of me while paying for their groceries with food stamps! 
Oct 24, 2012 8:52AM
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why not let obamanation buy ur fone....

oh wait...you mean us.....

we are paying for all these poor slobs who have these fones.....

 

don't u just love this country.....the people working who can't afford cell fones...paying for the lazy fat-assed slobs cell fones....while we do without.......

 

thank you DUMOCRATS!!!!

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