Hey folks how are you? Today’s post is going to be different from what I normally write about. Today I am not going to talk about investing, it’s going to be personal finance related.
Back in September 2015 when my cell phone died I did what many people do I jumped into my car and drove to the store to get another one. I knew I wanted a new one but didn’t know what brand to get. I did know that I didn’t want to pay up front for a phone so I chose the phone pictured above LG G3, it had a retail value of $600. To get the phone all I had to do was sign a two year contract at a certain price point. Looking back it probably would have been wise to pay for the phone in full and avoid the contract.
Here in Canada the longest contract a telecom company can offer people is two years, it use to be three years but, The Canadian Radio-television and Telecommunications Commission (CRTC) made this decision and it took affect with contracts signed after Dec 2, 2013.
Have you ever purchased something then regret it a short time later? Well this was me with me cell phone. You see I only really need my phone for driving in case of emergencies and for texting. When I went to the store I guess I wanted to be like everyone else I wanted to own a smartphone that could do anything. A few months into the contract I realized my mistake and regretted signing my contract for the phone. Don’t get me wrong it’s a nice phone and works really well, however the price I was paying per month was way to much.
Speaking of money in order to get the phone without paying anything up front I had to sign up for a certain plan. So I signed up for the gold plan which cost $60 per month, I also added a $7 month insurance in case anything happened to the phone they would replace it. I also added 250mb of data for an extra $2 per month. So my monthly bill was $69 x 13% (tax) = $77.97 pretty outrageous for someone who only uses the phone for emergencies and texting.
Decision and the Call
After a few months I realized my mistake and wanted to correct it. So I started checking out plans for what I needed pretty much unlimited texting and a little bit of free mins to make some phone calls. With so many places offering free wifi I knew I could eliminate that option from my phone and that was probably the most expensive part of my current contract.
Last week I phoned my cell phone provider Virgin Mobile to see when my contract would be over and I was informed that my contract was going to end on Sept 24th. When I was doing my research the lowest plan that I needed was priced at $35 per month with Virgin and a competitor was priced at $30. I’m not sure about the United States but here in Canada all of the telecom companies charge people to unlock their phones usually around $50. In December the CRTC has ruled that the telecom companies will no longer be able to charge people.
So my original plan was to stick with Virgin and pay $35 per month until December then switch to avoid paying an unlocking charge. However when I was speaking with the lady from Virgin she asked me what I was looking for after my contract expired. After telling her what I was looking for she said she could offer me a $25 a month plan I decided to accept this. Here is the difference from my old plan to my new one.
|Cell Phone Plans|
|Old Plan||New Plan|
|Had to sign two year contract||Pay month to month no contract|
|750 Anytime Minutes||100 Anytime Minutes|
|Canada-Wide Calling||Canada-Wide Calling|
|Unlimited Worldwide Texts from Can||Unlimited Canada to Intl texts|
|Call Display||Call Display|
|Unlimited evenings & weekends from 5pm||Unlimited evenings & weekends from 5pm|
|Call Waiting & 3-Way Calling|
|Premium Smartphone Insurance $7||Remove Premium Smartphone Insurance|
|Data 200MB $2||Remove Data 200MB|
As you can see above with my new plan I am no longer stuck in a contract I can leave anytime. Also I am losing 650 anytime mins and 850MB of data what I will miss out of these two is the data but I am willing to lose this in order to save money. I also removed the add on’s which I feel are not needed anymore.
My current plan I am in I’m paying $77.97 if I times that by 12 I am paying $935.64 a year.
Starting on Sept 8th my new month to month plan starts and I will pay just $28.25 per month and $339 per year.
So with this switch I will be saving $596.64 per year
Well folks there you have it by making one phone I was able to save close to $600 per year and correct my mistake I originally made two years ago. From now I am going to try and avoid contracts, I don’t like being stuck in a 24 month contract.
Thanks for reading I appreciate the support.