Be smartphone savvy
Make your minutes and data stretch further with a family plan
Toronto-based author Gordon Stein drew on his personal finance expertise and his drive to help Canadians build wealth — and get out of debt — in writing Cashflow Cookbook.
He describes his book’s 60 financial “recipes” as “simple, fun and approachable.” They can, he says, add up to $2 million in wealth if applied together over 10 years. His book offers a quick, breezy read and allows you to skip chapters that don’t apply to your life or spending.
In the fourth of a monthly series of excerpts, from a chapter titled “Seared Cell Service,” Stein explains that optimizing the expense of mobile coverage can add tens of thousands of dollars to your net worth over time. Richard and Stan were settling into their new home and money was tight. The occasional unexpected expense, like a car repair or a house issue, would upset their budget.
STEIN continued on L2
But they were still able to set money aside and hoped to increase their savings rate over time.
One evening, Richard’s cellphone went missing. He and Stan checked everywhere, to no avail. Richard started to panic; a replacement phone could cost hundreds of dollars.
The next morning, Richard picked up Robin, his carpooling co-worker, who happened to manage the company’s telecom support. As they drove, Robin reached into the car console looking for the charging port and found … the missing phone. Richard was thrilled and offered to waive Robin’s carpooling contribution for the month.
As they pulled into the parking lot, Robin said, “I don’t think I’ve seen your name on the employee discount program we have for phone service with your provider. You could save about $25 a month and you might be eligible for a new phone in case you lose this one for real next time.”
Richard signed up for the plan and contacted the bank right away to increase his monthly TFSA contribution by $25.
For most families, the cost of mobile phone service can be daunting. Of course, the original business case for the kids’ cellphones was something about how you would be able to stay in touch with them when they are out and about. Although they never miss a Snapchat or a Facebook update from their friends, their devices seem to misfire with incoming messages from the parents. Darn technology!
Cellphone costs are significant, but are often overlooked as an area for savings. In most households, there’s an ongoing tug-of-war to keep the bills reasonable, the data usage under control and the phone out of the lake, the toilet and the laundry.
While you’re not going to stop the gaming and the YouTube consumption, you can put some rules in place to serve up a manageable mobile bill for your household each month. Let’s mince some megabytes:
Ingredients
Get everyone on board with one provider that offers the best price plan for your situation.
See if your company has a program that extends corporate pricing to employees. Such deals may also be offered by professional and alumni associations.
Have everyone use an app like My Data Manager to track their usage — and review the numbers with them. Or, better still, could some family mem- bers do without cellular data? It means using Wi-Fi, but that can be a serviceable option for many.
Have your kids pay for their data overages and — if they’re working — pay their entire phone cost, so there is some shared responsibility in the family.
Ensure everyone has a protective case on their device.
Invest in a device protection program when you buy new.
Ensure all the phones are set to use your home Wi-Fi rather than cellular; same goes for other common locations like schools, offices, airports and gyms.
Get roaming packages or turn off data when you travel.
Review your bill carefully each month to spot overspending on data, directory assistance or long distance.
Call your provider each year to optimize your plan as your needs change — a one-hour call will yield significant savings.
Use apps like Google Hangouts, Slack, WhatsApp or Facebook Messenger for free Wi-Fi calling to save on minutes, long distance and roaming charges.
Hearty Serving: Family with four cellphones and a landline
Spending $370 monthly á Set all phones to maximize Wi-Fi á Monitored usage with an app á Called wireless provider to optimize costs
Moved home phone, internet to cell carrier to get a discount
New spending adds up to $250 monthly
Savings, $120 monthly Yield á Monthly Savings = $120 á 10-year value X 173 $20,760 Gordon Stein is a Toronto-based personal finance speaker, author of
Cashflow Cookbook and contributor for the Star. Follow him on Twitter @cashflowcookbk