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Your Family Budget – This Will Kill It

Cell phones can destroy a family budget quickly.The New Killer of the Family Budget

So you agree that your family budget is really being stretched or maybe it’s already snapped. This may not come as a surprise to many individuals, but the newest killer of the family budget is the monthly cell phone bill. When I first realized this, I found it hard to believe. But after much research, and talking with friends, I discovered that this was true.

The cell phone bill(s) has now become number 2 in size, right after the mortgage payment. That fact blows my mind. What is so important that needs to be said, that justifies cell phone usage of this magnitude?

I just heard of one young lady who paid her final 2012 telephone bill, and for the year, the twelve bills total $4,105.00. To make matters worse, she earns a little over $30,000.00 per year, and doesn’t use her cell for business. Fourteen (14%) of her salary was spent on her cell phone, and now she wonders why her credit card bills are so high and the family budget strained.

Do you think that cell phone usage is perhaps frying some individual’s brains causing them to be unable to make rational decisions? When you look around, practically everyone you see has a cell phone glued to their ear, and it doesn’t matter where they are, or who it may disturb.

One of the major news networks conducted a survey, and they claim that it showed cell phone bills decreasing. Bull! You don’t have to go far to hear many horror stories about cell phone bills. There are individuals who have cut back on necessary purchases in their family budget just to keep their smartphone bill current.  Many others have carried these balances to credit cards and struggle to keep their bills paid. They also shop around constantly looking for better deals and ultimately find out that all providers charge about the same.

One lady compared her family’s cell phone usage to crack cocaine. She is divorced and she pays for three smartphones and one flip, to the tune of $4,100.00 per year. She lost her job recently and can’t see how she can lower her average bill of $350.00 per month without paying high fees or losing the service. I have an answer for her, but she wouldn’t listen. It would help her family budget considerably as well.

Cell phone trade groups continue to say that the average bill is just $47.00, (one hand set) but what they don’t say is for the average family of four, that equates to $188.00 per month, base charge. By the time you add in the data plans and every other conceivable type of unnecessary services, the charges mount up very quickly and take its toll on the family budget.

Do I need to remind you what happens when you go over your monthly allotment? Out comes the credit card to pay the bill,

The most obvious question raised after reading these comments is how in the world did cell phone bills increase this much and so quickly? You go into the store and purchase the phone and sign up for a plan that you think you can afford. Then the first bill arrives, and you realize that you didn’t sign up for this, or so you thought.

Was there the bait and switch game played by the provider or the sales person? Apparently, a lot of the terms aren’t clear or spelled out, and this is where the surprises jump out. It does seem to me however, that many individuals are confusing their wants with their needs.

Why does one “need” broadband internet access on their cell? I’m speaking here of someone where their job doesn’t require it, nor is there any other obvious reason. Then when you factor in smartphones for each child, it’s absurd.

Many consumers continue to complain about the phone providers move that caused a price increase in all data plans. They call it a rip off, but continue to pay and use. Just before the increase, I renewed my old plan with carryover minutes with no frills.

I personally dislike telephones period, and only turn on my cell when I need to make a call, which is perhaps three times a week. My bill would be the envy of all who saw it. When the time comes and I have to subscribe to a data plan, the cell phone will be gone instantly. The cell phone industry reminds me a lot of the gasoline suppliers…one major price fixing that the government regulators are afraid to tackle, and the reason cell phones are a killer of the family budget.

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About Gust Lenglet

An accountant and tax preparer by profession, Gust's true passion lies in his blog titled "How To Manage Your Money". Through this venue, he not only tries to teach individuals about budgeting and money management, but he writes the majority of the articles as well.

Comments

  1. A wonderful post that I forwarded to my teenager. On a recent one week vacation in Mexico the bill was $600+ in roaming, texting and data transfer charges. The data charges were sharing photos, videos and logging into Foursquares, Facebook, Twitter and so on. Talk about blowing the family budget, that was the grocery budget for a month :(

  2. I agree with your article 120%!!! I know everywhere we look we see that cell phone use is increasing, but I have not joined the masses. About a year ago we were running on a very tight budget because my husband was out of work for awhile, and I am a stay-at-home mom. So we looked at all our bills and checked to see where we could cut down. Our phone bill was one place we could save on, so we down-graded our plan and dropped the internet for both of our phones. Our bill is now about $50 less each month than it was previously. Besides, I disliked going online with my phone anyway – I prefer the larger screen of my PC :)

  3. I love this post! LOl!!
    Unfortunately, we need our phones because of our jobs, although we can deduct some of our bill for business expenses, it still costs a fortune and I am endlessly calling and trying to find a better deal for our family plan. But of course, they have to throw all of these extras in that we don’t need, and it drives me nuts!
    Sometimes, just to get what we want, I have to call several times just to get a customer service rep to give us a deal that they apparently aren’t supposed to discuss.
    Most recently, we tried to continue “grandfathering” our family plan we had for several years, and found out that this certain company doesn’t allow “grandfathering” anymore, once you upgrade.
    The worst part is we are stuck in this neverending contract, knowing there are other companies who offer better deals, much better plans and even better and cheaper phones. But we always have 1 out of 5 of our phones on a contract, while another needs upgraded, UGH!
    I also agree with the above comment abiut not caring to much for the size of the phone screen. I hate having to use this to get online, but there are times I just have to check Facebook, lol.
    Actually, I tried calling to get a lower rate on a plan with internet access, and talthough they make it very hard, if you argue enough, they will do it.
    I checked our actual usage compared to what we have leftover each month, and we haven’t even been using half of what we are alloted each month. So, after knocking us down a few tiers, we saved $80 a month on our family plan!!

  4. The cell phone stuff is outrageous. I’ve canceled it on all but my own and my wife’s phone and there are voice over ip options that pay for credits for for the kids. Much much cheaper.

  5. Richy Chavez says:

    My husband and I only have two smart phones but mine has the hotspot service added to it and a $4 a month charge so that i can make international calls. The total cost of our phones is around $250 a month. This is ridiculous considering that we only pay $550 a month for rent.

  6. JTomlinson says:

    We have a cell phone on a family plan shared with parents/grandparents, but we hardly ever use it. We pre-charge it with 100 dollars that rolls over from year to year. It’s taken us 2 years to use ten dollars of the prepaid money. We don’t text, we just use it for traveling in case of emergency. I am tired of seeing people texting or talking constantly… like they can’t stand to be away from Facebook long enough to go out to eat with their family. Too many times I’ve seen a family sitting around a table at a restaurant, and mom and dad are texting on their cell phones, and the kids each have their own phone playing games or texting…. and NOBODY is looking or talking to each other! Crazy.

  7. Edwin Miller says:

    It’s bad enough cell phone services charge the fees they do, but on average I find overcharges every other month. They always refund the overcharge but only because they were caught I’m sure. So I recommend everyone checks their bills carefully.

  8. Michael Brighton says:

    I tried a number of different carriers and different plans with each. None could be trusted to live up to their end of the contract they created. There were always price increases, added fees that were not included in the agreement but mysteriously turned up, etc. I finally gave up and purchased a cell phone and buy prepaid sim cards as I need them. No monthly billing surprises.

  9. Our family’s cell phone bill is now the highest of all of our utility payments. There is no way I could live without it but it really does kill our budget.

  10. Actually I think this is among the most vital information for me. And i am glad reading your article. But want to remark on some general things, the web site style is ideal, the articles is really excellent. Thank you for sharing with us. I think it would be effective for all. Good job, cheers!

  11. I think when people add up all of the ‘things’ they pay for each month, it is a shock. Cell phones have become a daily tool that we seem not to be able to live without. But there has to be a way to control the cost. Bait and switch is scary and happens a lot more than we think. Thankfully, there is more competition and wireless plans might be getting cheaper.

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