Broadband connection could mean $8K in yearly savings

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Many Americans faced with the realities of a tough economy are trying to make the most of their money. A new report by the Internet Innovation Alliance says that a broadband Internet connection could lead to some major savings for consumers.

The study dubbed the “Real Cost of the Digital Divide” suggests that those without the benefit of reliable and unrestricted access to the Internet spend more. Researchers say that after accounting for the cost of a broadband connection, consumers could save close to $8,000 a year.

David Sutphen, co-chair of the alliance, says that for members of the African-American community who have suffered more than others in the country’s most recent economic recession, there is a need for more information which can help protect their purses and wallets.

The alliance says there are 10 key categories: entertainment, travel, housing, food, apparel, automotive, newspapers, gasoline, non-prescription drugs, and bill pay, where African-Americans and the average American could be spending less.

“I think the way they go about achieving these savings, whether it’s clothing, food, entertainment, automobiles, once you have a connection, just do a little bit of research and you’ll be able to see just how much savings you’ll find,” Sutphen said.

Studies about broadband Internet usage have highlighted what has long been referred to as The Digital Divide.

“Although an increasing number of African-Americans have a broadband connection, there is somewhere between 35 and 45 percent of us, that don’t have home broadband,” Sutphen added.

He thinks this stops many from many educated purchases and smart financial decisions.

Natalie McNeal a personal finance expert and author of the forthcoming book The Frugalista Files agrees that there is a direct correlation between information about discounts on goods and services, personal finance tips and tricks, and the ability to comparison shop.

“I definitely think the Internet is key when it comes to getting last minute coupons and up to date coupons to save money,” she said.

She agrees that access to the Internet could make people better educated about deals, and steals but says she’s already noticed many people using their cell phones to learn to save money.

“We can’t overlook the fact that mobile apps for coupons are also becoming popular,” she noted.

McNeal also blogs for the site Smart Shoppers Unite, a site owned by K-Mart, which she says is among the retailers who have created blogs, set up social networking profiles, or found other ways to interact with customers who are fans of their brands and products.

When it comes to making long term financial decisions Sutphen and McNeal many people are more interested in taking their time, to weigh the pro’s and con’s of making certain purchases.

“When you want to think about the bigger ticket items, you want to sit down and basically have some library time with your computer,” McNeal said.

Sutphen hopes this new research opens eyes to the importance of Internet access, as a right, and benefit.

“What we hope comes from this, is greater awareness, and an ability for people from all communities, particularly the African-American community, to have a concrete and ongoing discussion about all people getting online,” he said. “There’s so much information substantive as well as entertainment that you can get online.”