Young Aussies struggling with smartphone expectations

One in four young Australians have felt under pressure to buy the latest smartphones in order to keep up with their friends or family.

And one in five have been locked into a mobile phone contract they struggled to afford.

Consumer research company Canstar Blue surveyed 1,800 adults and also found that 13% of Gen Ys have been burdened with a mobile phone debt.

“This survey highlights how many young Aussies in particular feel the need to keep up with the latest trends in consumer technology, even if it means getting into financial difficulties,” said Canstar Blue spokesman Simon Downes.

“Many people feel under pressure to have the latest and greatest gadgets to keep up with their peers, and new smartphones seem to be one of the biggest ‘must have’ accessories. But consumers should make sure they keep their spending in check, particularly when signing up to a plan to get the phone they want. Mobile phone contracts are a serious financial commitment and should not be taken lightly, no matter how badly you want a new phone.”

The survey also found that 29% of Gen Y respondents have felt pressured into signing up to a contract in order to get the phone they wanted, while 30% have been shocked by the size of a bill.

Cutting back on smartphone costs

There are three main areas in which you can save on your smartphone.

1)       Carrier costs

2)       Device costs

3)       Lifetime repair/ancillary costs

Which phone plan/prepaid option will work out the cheapest?

The most important thing to consider when signing up to any mobile phone contract is whether or not you can realistically afford the monthly payments. Be honest with yourself and don’t underestimate the significance of what you’re doing – a mobile phone plan represents a serious financial commitment over an agreed period of time and not keeping up with payments will have consequences.

First, consider whether or not a prepaid option could work best for your circumstances. This really depends on how much data you tend to use, how many calls you make, and how many texts you send. If the answer is “not much” then prepaid could be a good idea – allowing you to set budgets and make sure you don’t spend what you can’t afford. However, if you rarely put your phone down and use lots of data, there could be better value in signing up to a good plan.

Joseph Hanlon, Editor of tech comparison site WhistleOut, says there are big saving to be had if you’re willing to resist the temptation of upgrading your smartphone.

“It’s terrible that so many Aussies feel that they struggle with the cost of their phone service,” he said. “The good news is that if you have a working smartphone, and you can resist the temptation to upgrade to a newer model, there are huge savings in SIM-only monthly phone plans. People who have been paying $70 a month or more will find they can halve their bill each month and not lose any of the service they have come to expect.”

Service providers are starting to make it easier for consumers to understand what sort of plan works best for them. For example, Vodafone recently earned a Canstar Blue Innovation Excellence awards for its new Data Workout Plan, helping customers understand how much data they actually need each month.

You should also consider what other consumers think about their mobile phone service provider. Canstar Blue’s most recent customer satisfaction survey saw amaysim rated highest for both plan and prepaid services.

Which smartphone should you buy?

Look at the costs of your potential smartphone handset purchase, divide the cost by the number of months you’ll have your carrier plan for, and see how it compares to a plan that bundles an included device. If it works out to be cheaper, great! If it’s a similar price, you might find that it’s ultimately a more cost effective choice to bundle. If you decide to purchase outright, phone prices will vary widely in both online and retail stores. Shop around for a price you’re comfortable paying.

Canstar Blue’s latest smartphone ratings offer an interesting insight into what consumers think about their phones and which they believe stand out in different areas, with LG phones deemed to offer the best value for money, although Apple and Samsung couldn’t be beaten for overall satisfaction.

Lifetime repair/ancillary costs

More than a third of survey respondents said expensive repair costs were a pet hate of owning a smartphone, while 40% bemoaned the fact that they’re easily damaged in the first place. Dropping your device effectively ensures you’ll end up paying through the nose to repair the tiny components inside. Because of this, invest early on in a durable, no nonsense phone case. There are plenty of reviews online for countless devices.

The other big costs are apps, games, movie and TV rentals, digital music subscriptions, etc. They all seem cheap on the surface, but the small amounts add up over time. Go into your Apple or Google account and add up what you spent in the previous year – you might be surprised.