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Paying their share

  • July 12, 2013 - 2:09 PM

As teens turn into young adults, families may want to keep them on the family plan but increase their financial contribution.

On most wireless plans, parents typically pay the cost of the first phone, often priced at around $100, while the young people pay the much cheaper rate for their individual lines.

“That means that the parents are subsidizing their kids,” said Maria Ana Vitorino of the Carlson School of Management.

She suggested that it would be more equitable to divvy up the cost of the first line — don’t forget the taxes, fees and surcharges — and pro-rate it for everyone on the plan. Parents would pay less, and young people would pay more, although still not as much as they would for an individual plan.

There are parents of the helicopter variety who want to keep their sons or daughters on their plan so that they can monitor their phone usage.

But that can backfire.

“Kids are not going to go for it if they figure out their parents are using the phone data to snoop on who they’re calling, or when,” warned Teresa Swartz. “Those kids will distance themselves. Once they figure it out, they won’t accept the help, no matter how much they might need it.”

 

Kevyn Burger

© 2014 Star Tribune