AICPA Survey: Digital world has made it easier to spend, not save

The explosion in mobile and online music, games, apps, connections, and movie downloads are taking a toll on Americans’ wallets, according to a new survey sponsored by the American Institute of Certified Public Accountants (AICPA).

More than half (56 percent) of U.S. adults say technology has made it easier to spend money and only 3 percent say it has made it easier to save, according to the survey conducted for the AICPA by Harris Interactive for National Financial Literacy Month. Thirty-seven percent are split on the issue, saying technology has made it easier to both spend and save.

The national phone poll of 1,005 U.S. adults found that Americans who subscribe to digital services spend an average of $166 each month for cable TV, home Internet access, mobile-phone service, and digital subscriptions, like satellite radio and streaming video. It’s the equivalent of 17 percent of their monthly rent or mortgage payment, the AICPA says. Those who download songs, apps, and other products spend an additional $38 per month, on average, according to the survey.

“Our gadgets and connections can bring benefits like mobility and efficiency,” Jordan Amin, chairman of the National CPA Financial Literacy Commission, said in an April 18 news release. “But they can also bring financial challenges, like taking money that could go to savings, for instance, or contributing to credit-card debt. We have to mind these expenses and budget for them to ensure the benefits outweigh the costs.”

The National CPA Financial Literacy Commission offers these three tips on managing digital expenses:

Make a budget. Decide how much you are willing to spend each month on digital services, apps, and content. Look at how much
you’ve spent on technology purchases in previous months and how that compares with your overall spending and saving. This will give you a baseline for determining an ideal budget for such purchases.

Set up an account. Since many digital purchases are automatically drafted from bank accounts or charged to credit cards, it can be difficult to keep track of spending, the AICPA says. To help, set up a separate checking account or credit-card account — with a low limit — for your digital purchases. Set email or text-message alerts to let you know when your balance is near your budgeted threshold. If you use a credit card, be sure to pay off the balance each month.

Evaluate. Regularly evaluate your spending on digital products, especially subscription services with recurring fees. Are you using the services enough to justify the expense? At least yearly, consumers should also look at spending on technology infrastructure such as cell phones and Internet connections to consider if new features, bundles, or technologies could lower their total bill, the AICPA advises.

Since 2007, the AICPA has conducted an annual survey of Americans to determine their top financial concerns and assess their financial well-being. Additional findings from this survey include:

-Four in 10 adults, or 41 percent, download and pay for digital products or services.

-Based on those who download each type of content, Americans buy an average of five digital songs per month, five movies or TV shows, two apps, two games, and two eBooks.

-Seven in 10 adults, 69 percent, with annual household incomes of $100,000 or more, download and pay for digital products and services, which is significantly higher than the 28 percent with annual household incomes of less than $35,000.

-If facing a financial crunch, Americans would rather change what they eat than give up their cell phones, downloads, or digital TV services, the survey found. Asked to choose the one action they would most likely take in tight times, 41 percent said they would cut back on eating out, 20 percent said they would cut off cable TV, 8 percent said they would end cell-phone service, and 8 percent said they would stop downloading songs and digital products.

Harris Interactive conducted the telephone survey on behalf of the AICPA within the United States between March 8 and March 11, reaching a nationally representative sample of 1,005 adults aged 18 and older by landline and mobile phone. 

The American Institute of Certified Public Accountants says it’s the world’s largest association representing the accounting profession, with nearly 377,000 members in 128 countries. AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting.

The AICPA maintains offices in New York, Washington, D.C., Durham, N.C., and Ewing, N.J.