Cell Phones, Apps, Money

The Connection Between Cell Phone, Apps, and Money

If you’re wondering why a Financial Literacy presentation covers cell phones and apps, the answer is simple.

Over 97% of the people in the US have cell phones – that’s over 307 million. 85% have a smartphone. The major differences between ordinary cell phones (or mobile phones) and smartphones is that smartphones let you access the internet, take pictures, and (here’s the big one) add apps.

Let’s start with cell phones. According to a JD Power study, the average monthly cell phone bill for a single individual is $114 ($1368 per year). The cost fluctuates depending on the carrier you choose, the number of phones on your plan, and the features you select.
Most people can reduce their costs significantly – money that can be used for investing or saving for some important goal.

Things to consider When Choosing a Plan

Here are a few things to consider when choosing a plan:

    • Do you need an unlimited data plan? Check your three most recent bills to see how much data you really use.  Compare your monthly cost to limited plans to see how much money you could save.
    • Single plans are the most expensive. If you have a single plan and have a good relationship with a family member of close friend, check out how much you could save if you joined their plan.  A group of 4 pays much less per phone than a single individual.
      • Keep in mind that if one person on the plan has unlimited data, everyone has to have unlimited data. If you are not the one paying the carrier, check on line to be sure the invoice is being paid on time so you don’t get stuck with unwanted fees…
    • Do you need a high priced phone? Do you need to upgrade every year when a new phone comes out?  If you buy, or upgrade, your phone through your carrier, your bill may be $30/$40 higher each month.
      • When you do upgrade, check for trade-in options, which can be as high as $800 in bill credits, depending on the age of your trade-in.
    • Insurance is another product offered for about $12 a month. Unless you drop your phone often, this may be a waste of money – considering the deductible you will have to pay to fix your phone, or the fact that a replacement phone will probably be a “refurbished” phone.
      • Buying a good sturdy phone case may be the better option.
  • Choosing a carrier can make a big difference in cost – the competition is fierce, but the type and number of plans available are often difficult to compare. Take the time to read articles that compare the service speeds, features, and costs for at least the major carriers – Verizon, T-Mobile, AT&T, and Sprint.  When you are sure which one best meets your needs.  Before you go to sign up, write down the features you need, so you won’t be convinced to buy more than you need.
    • Smaller carriers, often owned by the larger carriers, are even cheaper.  For example Visible is owed by Verizon and offers the same features at a cheaper price.
9 Ways to Save Money on Your Cell Phone Bill

Now let’s go on to Apps.

App is short for “application.” It is a software program that’s designed to perform a specific function for the user. It is usually downloaded to a smartphone, although it can usually be downloaded to any type of computer.

Computer Basics: Understanding Applications
Purpose of Apps

The primary purposes of apps are:

  • Gaming   (As more and more states legalize online Gambling, the number of gambling apps is sure to increase).
  • Music and Entertainment Disney+, Netflix, TED, Spotify, Apple Music, Google Play
  • Health and Fitness  MyFitnessPal, Zones for Training, Fooducate
  • Social Networking   Facebook, Instagram, Twitter, YouTube, TikTok, Dating Apps.  (Interesting fact – TikTok is the #1 app in the US.
  • Retail and Commerce   Shopify, Dor, Magic Plan
  • Business,  Accounting, Inventory Control, Payment Systems
  • Everything else  including everything you may want to help you set up personal budgets, bill pay, and investing
Choosing Apps

A recent study found the average user spends 4.3 hours a day, every day on their mobile phones, with social, photo, video, and gaming apps the most popular.

Take the time to choose apps that help you save time and make life easier or more enjoyable.   Your time is valuable.

So what should you know before considering downloading an app?

  • First, decide why you want the app?  Don’t download an app that is not useful, enjoyable, or doesn’t move you toward your goal.
    • Think of an app as a tool to use to solve a problem, or make your life easier, or relaxes you. Do you want an app that can help you create cool art on your phone, or help you make a budget, or remind you about your appointments?  When you define your goal, it will be much easier to search for the right app.
  • Second, what does it cost?
    • Many apps can be downloaded for free.  So how do they make money?
      • The primary method is by having a direct link to a site that sells a product they are advertising — allowing you to purchase the item without leaving the app.  Users like the convenience.  When an item is purchase through their app, the developer receives a commission (fee) for their service.
        • Remember – they have an incentive to make the product look as good – something that you will want to buy.
        • This has become their major source of revenue.  Over $50 billion dollars in revenue was generated worldwide by in-app purchases, totaling 48% of app revenue.
      • Another revenue producer is featuring ads on their apps that users view (like banners and videos) and charging the advertisers for running the ads.
    • Some apps have to be purchased, either for a one-time fee, or for a periodic payment that is taken directly from your account at the time you download the app.
      • Before you buy, stop, think whether it’s worth the cost. You may decide that it’s “perfect” and worth the fee.   However, be sure to check if it is a one-time fee or monthly or annual – and whether it renews and is deducted from your account automatically.
    • Still others start out free and then “charge” for “add on” features.  For instance, 15 million people play Wordscapes — worldwide teams solve word puzzles, competing for virtual coins and crowns.  It’s technically free, but if you want to skip their ads, there is a one-time fee to play ad-free.  You can also “buy” clues.  It’s incredibly easy to spend $3, $4, $5 in a few seconds.   In the three years since it was developed, revenue increased from $100 to $300 million dollars.
  • When you choose between apps, make certain it is user friendly.  If the app is too difficult to understand or to use, it is not the right app for you.  Take the time to find one that accomplishes your goal, while being a pleasure to use.
  • Ask your family or friends if they are familiar with any apps that will help you reach your goal.  They may have already gone through the search process and will be able to tell you what works or doesn’t work.  Family and friends are a great resource.
Before Downloading An App

Before downloading, make certain any app you are choosing is secure. You don’t want to download an app that will create problems for you.

  • Google Play Protect checks your apps and devices for harmful behavior.
    • It runs a safety check on apps from the Google Play Store before you download them.
    • It checks your device for potentially harmful apps from other sources. These harmful apps are sometimes called malware.
    • It warns you about potentially harmful apps.
    • It may deactivate or remove harmful apps from your device.
    • It warns you about detected apps that hide or misrepresenting important information.
    • It sends you privacy alerts about apps that can get user permissions to access your personal information, violating our Developer Policy.
    • It may reset app permissions to protect your privacy on certain Android versions
  • Apple provides layers of protection to ensure that apps available on Apple are free of known malware and haven’t been tampered with.
IN Conclusion

Cell Phones and Apps have made our lives easier and more enjoyable. They can also be annoying and potentially harmful. We are in control of making the right choices – including the ones that are Financially Smart.

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