IIA REPORT: CONSUMERS CAN SET ASIDE $10,500 ANNUALLY BY UTILIZING HIGH-SPEED INTERNET AS A MONEY-SAVING TOOL
Potential broadband-enabled savings rose 55 percent over five-year period thanks to new online offerings, virtual marketplaces, Internet tools and mobile applications
WASHINGTON, D.C. – December 10, 2015 – High-speed Internet enables Americans to save an average of $11,944 per year on household spending, the Internet Innovation Alliance (IIA) today announced. After factoring in the average annual cost of a mobile data plan and a home broadband connection ($1,440), the annual savings still add up to more than $10,500. The financial analysis, “10 Ways You Can Be Money-Savvy with Broadband,” was authored by Nicholas J. Delgado, certified financial planner and principal of Chicago-based wealth management firm Dignitas, in partnership with IIA.
Since 2010, IIA has calculated potential Internet-enabled savings in 10 different categories, factoring in data from the Bureau of Labor Statistics’ annual Consumer Expenditure Survey and opportunities to take advantage of online offerings that replace traditional consumption, along with virtual marketplaces, Internet tools and mobile applications for web-exclusive discounts and effective comparison shopping. Over the past five years, the amount of money that consumers can keep in their pockets by utilizing high-speed Internet as a tool has shot up 55%, from $7,707 annual savings in 2010 to $11,944 annual savings in 2015, largely thanks to innovators who continue to reimagine the consumer experience. Of note, household income before taxes rose 6.4% from $62,857 in 2009 to $66,877 in 2014, and average annual expenditures per consumer unit climbed 9.0% from $49,067 in 2009 to $53,495 in 2014.
“Without question, the return on investment in broadband connectivity outweighs the cost, with unmatched chances for deal comparison, competitive pricing, and group-buying,” said Delgado. “Online-only discounts, coupons and sales can be exciting, so it’s important to keep your impulses in check to avoid over-spending.”
Drawing from the 2014 Consumer Expenditure Survey released on September 3, 2015 by the Bureau of Labor Statistics, IIA’s 2015 installment in its Cost Campaign series analyzed what the typical American family can save yearly on necessities like housing, food and clothing; basics including entertainment, gasoline and health insurance; and everyday services like bill pay and news, through opportunities only available via the Internet.
The savings are based on average spending in each category for the typical U.S. household, according to the Bureau of Labor Statistics.
Compared to IIA’s financial analysis in 2013, the greatest increases in savings opportunities emerged in the Entertainment and Automotive categories. As part of the Entertainment category, IIA this year calculated savings that consumers can garner by cutting the cord. The average annual cost for cable TV is $1,188.00, whereas the price for a year of online streaming via Netflix is $119.88, allowing consumers to save $1,068.12 over 12 months by making the switch. For the Automotive category, in previous years IIA applied a $500 one-time savings factor cited in the Edmunds article “Dealership Internet Departments vs. Traditional Car Buying” to the average new car price ($30,748.00 in 2012, for example, according to TrueCar.com). This year, IIA applied a $3,000 average, one-time savings factor available to TrueCar.com users, according to the company, to the average new car price in 2014 ($32,386, according to Edmunds).
“Closing the digital divide has never been more important,” said IIA Co-Chair Jamal Simmons. “Not having broadband access has real consequences, such as missed opportunities to save that add up to a significant amount of money.”
Simmons added, “It’s critical that policymakers continue encouraging the investment needed to expand broadband networks to every corner of the nation and advance educational efforts that increase digital literacy and show Americans how the Internet is relevant to their lives. The benefits of saving money, I might add, are universal.”
For more information on the study’s sources, methodology and a “Top 10 Ways Being Online Saves You Money” infographic that can be added to a website or blog, go to https://internetinnovation.org/special-reports/access-to-broadband-internet-top-ten-areas-of-saving-2015/.