A high-speed broadband connection to the Internet can save American consumers nearly $8,000 a year, according to the Internet Innovation Alliance (IIA). The cost savings are detailed in the IIA’s, “The Real Cost of the Digital Divide in 2011,” a report produced by Nicholas J. Delgado, a certified financial planner and principal of Dignitas, a wealth management company based in Chicago.
The savings are primarily the result of using the Internet to comparison shop and find group deals. “Consumers are able to save online due to price comparison, access to deeper markets and the power of group-buying,” said Delgado. “The popularity of websites like Groupon and LivingSocial has skyrocketed with users able to cut their spending in half in areas like dining out, entertainment and salon services.”
Delgado’s analysis is based on the 2010 Consumer Expenditure Survey, which the US Dept. of Labor released on Sept. 27.
Average annual expenditures per consumer fell two percent in 2010, according to the report, though the amount saved, at $7,707, stayed about the same compared to a year ago. 2010 percentage savings rose in Housing (9.8%), Food (26%), Gasoline (6.19%) and Non-Prescription Drugs (30%).
The average cost of a home broadband connection in 2010 was $490. Taking advantage of discounts offered only to online customers, consumers could save $7,200 per year on essentials such as housing,
food, clothing and basics like entertainment and travel, according to the IIA.
Broadband customers can completely eliminate the average $46.68 spent on paying bills, for instance. They could cut the average spent on newspapers by nearly 90%, and that spent on entertainment nearly in
half. Buying non-prescription drugs online can yield savings of 30 percent, while the amount spent on buying clothes can be reduced by nearly 34 percent.
A disproportionate percentage of Americans lacking a broadband Internet connection are either minorities, seniors, lower income or live in rural areas. Thus those who can benefit the most from a broadband connection and the savings that can be gained re missing out.
According to the Pew Internet and American Life Project, just two-thirds of American adults have a broadband connection at home, while the Commerce Dept. reported in February that only 60 percent of
rural households have a broadband connection, the IIA noted.
“Broadband service is like a treadmill; you have to use it to reap the benefits,” said Bruce Mehlman, IIA co-chair. “Extending broadband access to all Americans is the best way to empower them to better
manage their spending in a challenging economic environment.”
“Smart spending online can add up to a lot more money in your pocket,” added IIA co-chair Jamal Simmons. “For financial management, education, health care and jobs, high-speed Internet is an equalizer,
a tool that stretches across socioeconomic status and provides opportunities otherwise unavailable.”
A high-speed broadband connection to the Internet can save American consumers nearly $8,000 a year, according to the Internet Innovation Alliance (IIA). The cost savings are detailed in the IIA’s, “The Real Cost of the Digital Divide in 2011,” a report produced by Nicholas J. Delgado, a certified financial planner and principal of Dignitas, a wealth management company based in Chicago.
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