Gasoline`s in short supplyWell, this post's title is a misnomer because nothing in this post speaks of a necessity, nothing that is needed to "just get by". But one thing I'm surprised by is how we as a society have gotten so used to the idea of monthly charges. It leads to chronic underestimation of the true cost of things like iPhones, cell phones, cable television, satellite radio (although there is a lifetime plan), and other modern technologies. (One of the attractions of the Kindle for me was that there was no monthly charge.)
The risin` cost of gettin` by... - Don Williams song
Monthly charges inflate the cost of your standard of living in a way that one-time purchases don't. They are gate-way drugs to debt. Sure, the monthly fees can be dropped in times of economic distress, but those losses are keenly felt. Who wants to go without internet service or cell phone service these days? And it's only because consumers put up with such plans and reward the purveyors of it, that they exist. And consumers put up with such plans because we can't afford otherwise. We're a nation of spendthrifts.
(A telling anecdote of our total inability to save: a twenty-something in town asked his girlfriend to co-sign on her own engagement ring. He failed to pay for the ring and now she's left with the debt. They've broken up.)
I remember how reluctant I was to sign up for the Internet because I was annoyed by the fact that you get charged every month for time immemorial. That is a very expensive proposition compared to a one-time fee. Paying only $30 a month for what was once free adds up to over $18,000 over a lifetime. That's one helluva expensive TV.
As this piece on the iPhone says:
"The phone cost is the least significant factor. Whether the 8GB iPhone sells for $200 or $400 subsidized or $400 or $800 unsubsidized only minimally affects your other out of pocket costs over two years."Indeed the cost of a minimal plan over 2 years is $1440, not counting taxes and incidentals like a case, charger, etc...Pretty soon that adds up to real money. Just like with the federal government a billion here, a billion there starts to add up.