Monday, June 21, 2010

Day 4 - drop the mobile/cell phone

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?


  1. Also ;o) a tally update would be awesome, how are you going?!

  2. I read through the ERE website when you posted about it a while back, mine is costing me about $10 a month max and about a month of time off early retirement ;o) so decided it was okay ... people already think I hate texting lol ... and I use those super cheap calling cards for tolls etc ... need a landline for internet connection etc here so guess that is something I am not going to give up anytime soon!

  3. 1 month would not be enough to motivate me to give mine up either! lol.

    I was doing tally updates, but then I felt a bit exposed, so stopped. I'm doing well with it though. :) Thanks for asking.

  4. I would definitely save heaps of money without my phone, mostly because I barely use it. But I feel I need it for my own security and for people to contact me. I think I need to have another look around at plan options.

  5. If we all thought of purchasing power in terms of length of time before you can get to retirement we would spend allot less on stuff - to me its freedom versus having possessions!
    The lowest price I have found for a prepaid package which I am happily using is the Net10,10c/min, 2.5c/text and service starts at only $15 for 30 days, no other extra costs.
    Check out the if you vote or tell Net10 how happy their products make you you can win $500 in cash or star in one of their commercials (cool!)

  6. I think mine is very much security too MMB, but I don't know what else I could do.

    Kasandra, that's cheap as. I wish we got deals like that in Australia. Good luck if you entered, let us know how you go!


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