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The Money Club for Young Adults
Cell Phones & Plans
Cell phone and cell phone plan purchases can be quite complicated (and the company web sites do not help). Given their high cost and recurring nature (monthly bills), decisions you make about cell phones will impact your financial future.
Two basic options when getting a cell phone and plan:
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buy cell phone up-front ('unlocked') and buy your plan (minutes and data) separately (called 'pay as you go'). Less expensive, more flexible, more $ up-front.
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get cell phone and plan together on contract (usually 2 years). More expensive, less flexible, less $ up-front.
What is the best option for you? Do the Math.
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what does it cost to buy the cell phone you want?
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how much is the monthly plan (minutes and data)?
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how much is the same phone and plan on contract?
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compare the total cost of the 2 options over the life of the contract (usually 24 months).
Strategies to Save Money
Does Your Phone Plan Fit Your Current Needs:
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only pay for minutes and data you need
Black Friday (end of Nov) features special deals like extra data and/or an additional $10/month plan discount.
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If you are on a 'Bring Your Own Phone' Plan you can usually lock in additional savings at no extra cost. This might save you an additional $120 over 12 months.
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If you are on a 2 year contract you are usually not able to take advantage of special offers without paying extra to break your contract.
Multiple Phones: If you have multiple phones in your family on Bring Your Own Plans you can usually negotiate an additional discount on each line for additional savings.
Keep your phone for a third year: keeping your phone for a third year will substantially reduce your cost in year three.
Mobile Companies
Premium Brand Discount Brand
The big 3 telecom providers each have a premium brand and a discount brand. The pricing offered at each is quite different. Is the cell service any different? No, not that we are aware of.
Definitions:
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mobile data: Internet content delivered to mobile devices over a wireless connection.
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roaming fees: may apply when you travel and leave your 'home' network area and 'roam' onto the network or coverage area of another provider. Roaming charges are legitimate fees that consumers are contractually obligated to pay.
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overage charges: fee for the minutes, texts or data used in excess of those allowed in your monthly plan.
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contract: a single monthly fee paid for a fixed period of time. Most mobile phone contracts are set at 24 months and provide mobile customers with a handset and a monthly allowance of calls, texts and data. What happens if you don't hold up your end of the bargain? It could be sent to a collection agency; your credit score will be impaired and this will make it difficult to get a car loan or mortgage.
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