Connect and collect
Most of us are mobile these days – able to text, call or check the internet from where ever we happen to be.
And this mobility also extends to choosing a provider that is the best fit for us. The results of this eZonomics poll echo a YouGov survey in the United Kingdom in October 2013 that found 49% of mobile phone owners had never switched provider. The top motivation for switching in that survey was saving money.
It not only mobile phone costs – a “variable expense” in basic budgeting terms – that people adjust to better balance their household finances.
The ING International Survey on Savings 2013 asked 14,000 people if they had cut back on spending in the last year – and, if so, what they had cut back on. The results show leisure and entertainment was most commonly cited, followed by clothing and personal grooming then mobile phones and internet.
Don’t fall for this common trap
The method of thinking about spending known as mental accounting is very common but can lead us to make strange spending cuts.
Mental accounting is when people budget by dividing household expenses into groups – or separate “buckets” – for food, housing, transport and other expenses.
Research summarised on the Brown University website examined petrol price rises and found people typically changed petrol buying habits when prices went up rather than cutting back in a different area of spending, such as food or their mobile phone costs.
A lesson here is that if prices rise (or income falls), it might pay to revise the household budget as a whole. This is because it might be easier to make savings in other areas – such as entertainment and travel – and move money from one “bucket” to another to help ease the pain.