Broadband saves household money – $10,500 annually

Just a quick look at a recent report from the Internet Innovation Alliance on how much money a household with broadband can save…

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

Here are the places they found cost savings

ONE. HOUSING. POTENTIAL SAVINGS: $2,413/YR (16.53%)
Source: Search based study on apartments in New York, Chicago, Los Angeles, Dallas and Jacksonville Methodology: Sampled 50 online postings in the above markets to determine average cost savings relative to local apartment rent. Considered the average annual expenditure on shelter ($17,798) minus the annual mortgage interest and charges for owned homes ($3,200) based on the Department of Labor annual study on consumer expenditures. Applied 16.53% savings factor to the remaining average expenditure for apartment living ($14,598). Source examples: http://www.craigslist.org, Craigslist App, http://www.trulia.com, Trulia Rent App, http://www.zillow.com, Zillow App

TWO. AUTOMOTIVE. POTENTIAL SAVINGS: $3,000 (A ONETIME SAVINGS OF 9.26%)
Source: Cost analysis based on average new car purchase price in 2014
Methodology: Applied $3,000 savings factor from TrueCar.com to the average 2014 vehicle purchase cost net outlay ($32,386) based on a report by Edmunds.

THREE. HEALTH INSURANCE. POTENTIAL SAVINGS: $430/YR (15%)
Source: Kaiser Family Foundation Study
Methodology: Applied 15% savings factor from Kaiser study to the average amount spent on health insurance ($2,868) based on the Department of Labor annual study on consumer expenditures.

FOUR. FOOD. POTENTIAL SAVINGS: $1,020/YR (25.68%)
Source: Search based study on basic basket of groceries based on top selling items (Carbonated beverages, Milk, Fresh bread, Produce, Snacks, Cheese, Frozen dinners/entrees, Cold cereal) Methodology: Created a standard basket of monthly groceries to establish a baseline retail cost. Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet. Potential savings based on cost reductions at the aggregate basket level. Applied 25.68% savings factor to the average annual expenditure on food at home ($3,971) based on the Department of Labor annual study on consumer expenditures. Source example: http://www.couponmom.com, http://www.peapod.com, http://www.coupons.com

FIVE. NON PRESCRIPTION DRUGS. $59/YR (17.52%)
Source: Search based study on common over the counter medicines (Pain Relievers, Antacids, Cold Remedies, Allergy Relief, Natural Remedies) Methodology: Created a standard basket of the best-selling non-prescription drugs to establish a baseline retail cost. Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet. Potential savings based on cost reductions at the aggregate basket level. Applied 17.52% savings factor to the average annual expenditure on non-prescription drugs, $338 annually according to a study by the Consumer Healthcare Products Association.
Source example: http://www.drugstore.com, http://www.overstockdrugstore.com

SIX. GASOLINE. POTENTIAL SAVINGS: $303/YR (12.28%)
Source: Search based study on lowest gasoline prices in New York, Chicago, Los Angeles, Dallas and Jacksonville Methodology: Researched average gas prices for each of the above cities, and found the lowest advertised prices in each, for a savings of 12.28% off of average gasoline expenditure ($2,468) based on the Department of Labor annual study on consumer expenditures.
Source example: http://www.gasbuddy.com, GasBuddy App

SEVEN. ENTERTAINMENT. POTENTIAL SAVINGS: $3,476/YR (63.02%)
Source: Search based study on restaurant dining, sporting/concert tickets and leisure activities in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Applied savings factor of 55.64% on dining outside of the home ($2,787) and entertainment such as concerts, events and leisure activities to the entertainment budget ($2,728) based on the Department of Labor annual study on consumer expenditures.
Source example: Groupon App, Living Social App.
Also added cost savings of “cutting the cord” on cable TV. To calculate savings, we looked at the average monthly cost of a cable subscription in the U.S. ($99, according to Yahoo Finance) and assumed the use of a streaming service like Netflix. Applied savings factor of 89.91% to the total average spent on cable as a percentage of total entertainment spending.

EIGHT. APPAREL. POTENTIAL SAVINGS: $1,117/YR (62.55%)
Source: Search based study on basic clothing combinations for men and women Methodology: Created a set of standard baskets of apparel for a man (khakis/jeans and shirts) and a woman (skirts/jeans and tops) to establish a baseline retail cost in each of five price categories. Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet. Applied 62.55% savings factor to the average annual expenditure on apparel ($1,786) based on the Department of Labor annual study on consumer expenditures.
Site example: http://www.6pm.com

NINE. NEWSPAPERS. POTENTIAL SAVINGS: $85/YR (39.29%)
Source: Search based study reviewing major newspapers in New York, Chicago, Los Angeles, Dallas and Jacksonville

Methodology: Calculated the standard annual rate for a daily delivery (including Sunday) subscription for three top papers in each of the above cities. Potential savings factor based on average annual daily subscription rates vs. online subscription rates and access to the newspaper’s app (where available).

Source example: http://www.nytimes.com, http://www.chicagotribune.com, http://www.dallasnews.com
TEN. BILL PAY. POTENTIAL SAVINGS: $41/YR (100%)
Source: Cost analysis based on average consumer’s postage for seven bills per month.
Methodology: Created a standard multiple of monthly bills that are traditionally paid via postage (Rent/Mortgage, Gas, Electric, Water, Cable/Phornet, Mobile, Credit Card). Applied average cost per U.S. postage stamp ($ 0.49) for each monthly bill.
Site examples: http://www.mycheckfree.com, http://www.chase.com, http://www.bankofamerica.com

This entry was posted in economic development, Research by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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