Day 4 at ERE is drop the cell phone plan (or mobile for us Aussies). This is part of what he says
“Is your cell phone worth it? This is easy to answer. Multiply your monthly bill with 300. Then divide this with your monthly savings rate. This is the number of months, that your cell phone is keeping you from retiring e.g. If your bill is $50 and your monthly savings is $500, then your cell phone is delaying your retirement by 50×300/500=30 months or almost three years.
For the geeks, the 300 comes from the principal 4% annual withdrawal rate, hence 12/0.04=300.”
I worked out my mobile is costing me 1.45yrs then. I like to chat and get a good deal on my phone. I am not actually on a plan, I am prepaid, but I have often thought I should just use it for emergencies.
Problem is it is how most people contact me. I don’t have a home phone and not everyone is on facebook or has the internet so I can’t contact them that way. In my current situation I can’t do VoIP, though I highly recommend it for cutting your phone bills.
So what am I going to do? Well, I need to recharge soon as I have no credit. Instead of my usual monthly cap, I am going to get the minimum credit and just not use my phone. This is easier said than done. I think I am a little too attached to my phone.
I do like to have it around because I have really needed it at various times in my life. I know people get along just fine without theirs, but for emergencies with no other way to contact anyone, it’s needed.
I have been desiring an iphone, which is a definite want not a need. At how much they cost I just could not justify that expense. It’s either pay closer to $1000 outright or go on a monthly plan for like $70 a month. Considering I like 1/3 of that a month, it just doesn’t make sense to do that.
If I can cut back and use my phone only in emergencies I could save myself close to $300 a year. The credit I could buy lasts 365 and if I am not using my phone unless absolutely necessary, $300 would be a nice amount to save instead of spend.
Could you do it? Have you considered doing it? I know my sister doesn’t spend much on her mobile.
I have had lots of people say I should get a home phone because mobiles are so expensive. I understand it is expensive for them to call me unless they are on a home cap/bundle/use VoIP or the same phone company as me. I get that. But many people seem to think it is cheaper for me to have a home phone rather than making calls from my mobile.
Here’s the thing. When I had a home phone it cost on average $50 a month. Way more than I spend on my mobile. I had to pay to have it connected and when I moved I had to pay to have it connected again. My mobile just comes with me and costs no extra when I move around. So no, a home phone is not cheaper for me.
I am actually going to see how long I can put off buying credit for my phone at all. I’ll let you know how long I go for before I get it. Have you looked around for cell phone deals?