The past decades have brought a lot of great inventions but none perhaps are so pervasive as a cell phone. In a few short decades, the cell phone has gone from being a laughable luxury to a necessity. More than 90% of American adults have a cell phone, despite the fact that most adults can remember a time without cell phones. Given that cell phones are a necessity, it has become a necessary earmark in most budgets. The phone companies have figured this out too, and have found a few ways to try to increase their bottom line at the expense of your household. Be sure to avoid some of these easy traps and add-ons.
Upgrade Phones on a Need Basis, NOT on a Want Basis
While it’s fun and pleasurable to have the newest and most expensive phone, try to look into the future. Take a look at the iPhone. Every year since 2007, there has been an upgraded phone released. Apple does this on purpose to keep their sales steady every year. In addition, the offer of financing added to the bill seems to make the upgrade almost silly to pass up. However, just like most financing, the rate of depreciation usually outruns the payments. I’ve had many clients with phone bills 50%, even 100% above their initial bills because they are paying not only their current phones but a previous phone that already was outmoded. Rather than upgrading at every available moment, be reasonable and set a pace for yourself. Looking at the upgrade in terms of a “need v. want” is a good judge of whether it’s reasonable this round. Only upgrade when it makes sense not only today, but tomorrow’s payment.
Be Careful Before you Get Insurance
Most phone companies offer some sort of insurance on the phones themselves. With phones costing almost $1,000 (the newest iPhones being the exception because they DO cost $1,000!), it seems reasonable to attempt to insure for damages. After all, the exteriors are delicate glass and would not withstand a drop on pavement or linoleum. With that said, insurance policies will cost anywhere between an additional $12 – 25 on a monthly basis. Be sure to read what is covered. Often, these policies will only cover the phone while it’s financed. After the financing is paid, the policies will no longer replace the phone and only offer credit toward an upgrade. The value of premium suddenly plummets when it’s only for store credit. In addition, the coverage may be redundant. Often times, renter’s insurance or homeowner’s insurance may cover damages to phones. Be sure to read through your pre-existing policies or call your other insurance companies to determine if the charge, while seemingly negligent, is really worth the costs.
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Hopefully, with the above tips, you can cut your phone bills down. But If you’re having other issues with your monthly budget or want to talk about budgeting, call us at The Shimotake Law Firm at (312) 620-6499. We’re Here to Help!