THE LIFE

March 8th, 2011

The True Cost Of Your Gadgets

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We all want to make sure we keep our gadgets up-to-date, but have you stopped to think about the cost after purchase?

In a recent Smart Money article, the author explains how much our treasured gadgets cost us during the products useful life. I took a few hot items from the list that we all have or would love to have and shared them with you, take a look.

Smart Phones (Total Cost: Up to $3,400 over two years)

Over the course of a two-year smart phone contract, the average buyer pays $2,140 for their plan, plus talk time, data, and extras, according to BillShrink.com, which tracks the wireless industry. That’s up 13% over the past three years. Then there’s the tax bill. On average, wireless service is taxed at about a 15% rate, with rates higher than 20% in Washington, Nebraska, Florida and New York. Want that hot new app? Prices are rising there, too — up 43% over the past year to about $2.85 per, according to KnowYourCell.com, which tracks the mobile phone industry.

Video Game Systems (Total Cost: About $160 to $300 per year, initial console purchase not included)

Nintendo, Sony or Microsoft, haven’t introduced new systems lately, they are rolling out new, pricey accessories. For $150 each, Microsoft’s Kinect motion controller for Xbox 360 has sold more than 2.5 million units since introduced last month, for example. The average gamer also buys four games per year at an average cost of $40 each, although prices run up to $100. And then there are the extra remotes. The Nintendo Wii system, for example, comes with only one remote controller, even though up to four people can play; each remote is $30 or more.

Owning A Car (Total Cost: In the first five years, drivers can expect to spend $3,600 per year)

A car’s true cost of ownership rose about 15% this year, which means that popular car models like the 2010 Toyota Camry and Honda Accord cost a whopping 60% more than the sticker price over the first five years of ownership, according to Edmunds.com. That includes an expected $4,000 on maintenance and $6,000 on insurance. Then there are the incidentals, like parking in a major city ($5,000 per year), or interest on a car loan (say, another $1,600). “Many buyers are in a state of denial, watching a car ad on TV and thinking ‘oh I can afford that’,” says Phil Reed, a senior editor at Edmunds.com.

E-Readers (Total Cost: Voracious readers and media hounds should budget up to $785 extra per year)

The number of consumers buying e-readers, like the Kindle or Nook, tripled this year, to roughly 6.4 million, according to the Consumer Electronics Association. Once they own the device, consumers buy about three books a month, according to Marketing and Research Resources. That totals about $300 to $380 per year on books, plus the cost of magazine and newspaper app downloads (for example, a monthly subscription to The Wall Street Journal costs $15; the most-downloaded magazine, the New Yorker, costs $3 per month). Cases and screen protectors start at $15 and go up.

Who would have thought that we spend this amount of money on these simple day to day items? Be sure to read the article for ways to contain and reduce cost of your everyday gadgets.


About the Author

Corey Phillips
Born and raised in Queens, NY, Corey is a working finance professional in Indianapolis, IN. A graduate of the University of South Carolina, Corey obtained a dual degree in Finance and Management. In addition to his corporate career, Corey possesses a passion for helping others realize their potential and authority.




 
 

 
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