(WTNH) — Are technology purchases breaking the bank? The Consumer Technology Association (CTA) estimates that US consumers will spend a record $398 billion on technology in 2019, up 4% from last year. Financial Consultant John Caserta explains how technology purchases do not have to break the bank.
The growth in spending is being driven by smartphones, laptops, TVs, and in-vehicle technologies, all of which represent nearly 40% of all total spending. And the emergence of new technology is also adding to that growth. Smart devices, such as watches, speakers, and home automation systems, along with streaming services for music and video are some of the fastest growing categories and account for nearly 10% of spending.
All of this spending adds up for the average consumer.
In 2013, the American Institute of Certified Public Accountants (AICPA) estimated that the average US consumer spent nearly $200 per month on things like cable, internet, cell phone digital subscriptions, and purchases – that would be nearly $250 per month today.
So how can consumers control their spending on technology?
Create a budget.
Track your monthly spending on things related to technology – such as different services – and then set limits on them. This will help you determine what you really need and can afford. Include saving in your budget for future purchases – especially large ones – which can help reduce the need to rely on credit cards.
Avoid using credit cards.
While it may be tempting to finance large purchases – like TVs, laptops, or tablets – with a credit card it can ultimately end up costing you more than the actual price of the device. And that’s true even if your credit card offers 0% interest as a promotion. If the balance of the item is not paid off during the promotional period, interest is typically charged to the original balance.
Review your subscription services on occasion. Eliminate services that duplicate each other or that you have not used in a while. And redirect those payments into a savings account.
Wait for deals.
Ask retailers about upcoming sales and consider waiting to make large purchases. You can also easily comparison shop online and see if your preferred retailer will honor competitors’ prices.