You don't need a cell phone

Matt over at Steadfast Finances had a piece recently on cutting down telecommunications expenses. He points out that most of us pay between $100-300 a month for land line, Internet and cell phone. (This assumes $25-100 for a land line, $35-45 for Internet and $40-110 for your mobile phone.)


He mentions three options for cutting down on expenses. The one I like most is the option of the Magic Jack. Apparently, he's had a good experience with it. And this is definitely one way to cut down on costs.


But.


His other two suggestions? Kill the land line, up your wireless minutes.


Let me see... Our options are a $25 land line or a $50-110 (I haven't met anyone in ages who actually has a $40 cell phone) cell phone. Now, I haven't taken a math course in 13 years, but even I see some basic issues here!


First, let me say this post is not intended to criticize Matt. His is actually the second post I've seen in the past week with the same advice. So he just happens to be the most recent example.


Now, getting back to the matter at hand. I know you all love your cell phones. I get it. I do. They're awesome and shiny and fun.


But, if you are really looking to cut costs, why oh why would you choose a cell phone over a land line?


I haven't met anyone in ages who pays less than $50 a month for a monthly plan. In fact, with data plans, most people hover a lot closer to $100 than to $40. Yet, in the other post (which I wish I could recall) a reader was cutting costs as a newly single mom by getting rid of her land line. Meanwhile, she and her kids had cell phones.


Once again, I feel the need to point out some basic math here: $60 a month (the cheapest you can generally get with a three-line family plan) is a lot more than $25.


I guess I should take a minute to state what I hope is the obvious. If you aren't hurting financially, if you've budgeted for a cell phone and data plan and can still save money each month, I'm not talking to you. That's a luxureed, and that's just fine.


Similarly, if your company covers some (or all) of your cell phone service, by all means. Or if you are one of the few folks who is not really based out of a home office, but instead is on the road -- hey, that's legitimate.


The rest of us, though? We don't need cell phones. We want them. We find them useful. But for all of you who are about to protest that you absolutely need your phone, just know that I'm skeptical, to put it lightly.


Most people work in an office -- either at a company or from home. Offices have phones, and home offices can have phones. A cell is convenient, since you can be reached in transit to either place. But is it convenient enough to justify a $25-75 premium? I honestly don't think so.


For those of you who protest that you'll miss calls, most answering machines can be accessed remotely nowadays. At worst, you can usually get a $25/month land line package that includes voice mail. Again, a cell phone is a convenience, but hardly the necessity we tend to claim.


The one I understand best is that parents want to have a way to reach their kids, or to have their kids reach them -- especially in case of emergency. But that's when a prepaid phone can come in handy. At least once a month, some store is offering one of these devices for free after rebate.


Of course, no matter what I say, most people will guard their cell phones with their life. They will insist that their phone is absolutely a necessity, and no amount of arguing (logical or otherwise) will dissuade them.


Then again, it's easy to rationalize something you already have. I think the true test is whether you could justify the expense if you didn't already have it.


If you didn't have a cell phone, how would you feel about the expense? If you had the extra $50-100 a month to put against debt or into savings, would you still sign up? Would you really give up $1,200-2,400 you spend in the two years of a contract?


Maybe the answer is yes. I don't know. No one can dictate your priorities. But it is a convenience, make no mistake.


This misconception that people have fostered -- that, for the average person, a cell phone is, anything other than optional -- drives me crazy. It's a luxury, and it's okay to have it. But don't pretend otherwise. Don't talk proudly about how you're cutting down costs by getting rid of the far cheaper option.


Incidentally, two years with a land line will run $360-600. Even if you have to pay to cancel your cell phone, that's a pretty big chunk of change to save.


But I understand that I'm in the minority here. Most people consider their cell phone a life line, if you'll forgive the quasi-pun. So I'm interested in hearing from people who have chosen a cell phone over a land line.


That said, I feel the need to embed this hilariously angry little rant by one Foamy the Squirrel. (If you haven't heard of him, shame on you!)


Caution: The following video has a rather gratuitous amount of swearing!

A more affordable way to lose a cell phone

Yep, I lost my phone. To my credit, it's the first one I've ever lost. Still, it's upsetting to say the least. We've done a couple of searches in the house, to no avail.


I'm going to try and do one last grid search of the apartment. I am convinced it's here, and not just because I called all the spots we visited the week before it went missing. I distinctly remember the night before Thanksgiving (Thanksgiving eve?) I was using the landline because my cell was low on charge. I thought, "Gee, I'd better charge it soon because it will die overnight." And, of course, I didn't.


If I still don't find it, I have to figure out what to do next.


I don't particularly want to buy a new phone because even the crappy ones aren't cheap, unless you're willing to sign away an extra 1-2 years of your life. Especially since this isn't my personal plan, I don't feel comfortable doing that.


I suppose the other option is to cancel the line. But we only have a year left, and my line costs around $12-15 a month. So the termination fee will be about as much (if not more) than keeping the line open. And if I choose the latter, I have some options if I either find my phone or meet someone who wants to upgrade to a nicer one. I could also prowl eBay if I'm feeling particularly desperate, which, for the moment, I'm not.


So I think I'm going to attempt to get a new SIM card instead. I have to check with AT&T, but if I get a new one, that should make the old one defunct. That would keep anyone from using our plan's minutes -- assuming someone found and kept my phone. At the same time, we wouldn't have to pay the termination fee, and, if I find another phone, I could go back to having a phone.


I figure that's the most affordable way to pay the stupidity tax.

Marketing logic

Over the past few months, my mom and I have discussed switching cell phone plans.


It's been an on-again, off-again conversation. Originally it came about when Tim needed some form of PDA. We considered a smartphone, since we could get a discount by signing a new contract. That, however, became moot when a kind and generous reader gave us her old PDA.


Since then, the discussion has surfaced from time to time. Tim's RAZR was giving us fits, and we wondered if it was about to shuffle off this mortal coil. But we went to a T-Mobile store and, after installing a new SIM card, the phone is functioning relatively well again. (Though Tim maintains its ability to get a signal is continually degrading.)


We discussed the option in depth when, for the first time in four years, we had an overage. A severe overage, to the tune of about $60 -- doubling our usual bill. Since I was suggesting AT&T for rollover minutes, this did seem to be the universe urging us to get on with the switch already.


Then Mom made a point: Did a once-in-four-years overage of $60 really make a new plan (costing $10 more a month) worthwhile?


Technically, no.


Rollover minutes seem like a great option. We rarely use all of our minutes, yet we pay the same rate regardless. So, the marketing logic goes, let's keep those minutes for up to a year. Then, we can be less careful, since we'll have a buffer in place. This would be great, since we have the lowest minutes plan (500) and are thus pretty strict about usage.


I was getting pretty enthused about this idea of "saving" minutes from one month to the next. The commercials were right -- I pay for the minutes, I should get to use them. Right?


Uh, maybe not.


At some point in this process, I stopped and asked myself, "If we rarely use all of our minutes, how likely is it that we'll actually use these rolled-over minutes?" It's pretty unlikely, actually.


You can argue (and I certainly have) that we could be less strict in our usage. This would allow us to take advantage of rollover minutes. Much like belongings swell to fill available space, our use could grow to fit our allowances, rather than our actual needs.


But once again, real logic has gotten lost in the shuffle. If we get used to using more cell minutes, won't that necessarily mean fewer minutes are left to roll over? Either way, it means these rollover minutes probably won't get used. The fact is, if we do change plans, we're mostly going to be paying for a perceived need, rather than a real one.


Perceived needs are how wireless companies make the big bucks. They try to convince us we need to be able to surf the web or check email anywhere for just $25-35 per month. They offer us 4 channels of TV on a 3" screen for only $15 a month. Or GPS for $10/month. (Because, if you're paying that much for the Web, you wouldn't want to just use Mapquest!) Whatever the latest technology, commercials tout it as the most convenient, conveniently forgetting to mention it's also the most expensive. But those bells and whistles get us into the store, if only out of morbid curiosity, and customers leave with far more than they thought they wanted -- and a helluva lot more than they needed.


But that's marketers' specialty. It's how they earn their pay. Their job is to create a need where there is none. If cell phone sales drop, they just add more gadgets and convince people to trade up. And that requires, not just skill, but their own brand of logic.


They've gotten us used to the idea that phones should do more than receive calls. They should have cameras. And play music. And sync to your computer. And have a day planner. And surf the web. And compare prices. And give directions.


But maybe the biggest coup is that they've convinced us that we need cell phones. The average person doesn't need a cell phone. Few folks do.


Okay, resident managers find it very useful. And salespeople who are in their cars a lot. But for the average person? It's a convenience. A very alluring one. And marketers have gotten so far inside our heads that now we almost do the work for them.


Think about it: Do you buy so many minutes because you need to make calls? Or do you make calls because you're already paying for the minutes?


Even if you're not willing to give up your phone, here's a trick that might get you to at least rethink the value of your rate plan:


First, add all the used minutes together -- including nights, weekends and mobile-to-mobile. Divide this sum by your monthly fee. You have an overall cost per minute used. Chances are, this comes out to a pretty good deal.


But, here's the catch: How many of those calls would you still have made if you were watching your minutes or didn't have a cell at all? Probably quite a few less.


Now, think about the fact that you may be using a lot of mobile-to-mobile and night minutes simply because you have them.


So now take only daytime minutes (no night, weekend or mobile-to-mobile) and divide that by your monthly fee. My bet is this is a much closer representation of your real use of your cell phone. And I bet it's a lot more than the last figure.


Of course, I'm presuming here that all those other calls could be avoided -- which isn't probable. But do consider how many of those calls could have waited until you were by a landline, and just how much you could be saving that way. (This is the last math exercise, I promise.)


Add up the minutes of your local calls. Multiply that by the last per-minute rate you found. Now compare that to a no-frills (no caller ID, no call waiting, no nuthin but a ringing phone) landline. Here in Seattle, that costs about $15-20 after taxes.


Still, that doesn't help you on long-distance calls. But, for around 4 months before our wedding, I was on the phone with my best friend/maid of honor in Florida at least twice a week, each call a minimum of 30 minutes, and our phone bill was still only $33. That included local service and a $6 monthly charge for a cheap long distance plan.


Okay, so if we were all perfect frugalists, we'd toss our cell phones out the window right now. But judging by the lack of clattering noises, I'm going to say that most of you are hugging your phone, telling it you won't let the mean blogging lady hurt it. And that's fine. Well, all except talking to your cell phone.


I'm not saying you have to give up your cell phone. Mom and I may still switch to AT&T for the simple fact that a) $10 isn't that much to pay for peace of mind and b) the reception has to be at least marginally better than what we're getting from T-Mobile.


What I am saying, in fact, is that we need to start thinking realistically about our spending, especially on things like cell phones. We've been immersed in marketing logic. We've been trained by marketers to think of all the value we can get from our plans.


All those 'unlimited' minutes on nights and weekends? All those calls we can make to other folks with our carrier? To paraphrase my favorite, ranting, cartoon squirrel, "If all this stuff is free, why are you paying $70 a month?!"


We're trained to think of all the items we get to have at our disposal, instead of what we're actually using. And it seems to me that marketers go to great lengths to keep us from figuring out the actual cost per use.


For example, Tim and I don't text. We don't particularly like texting and see no need to pay for it. No one ever remembers this. (Once, we even got a "Merry Christmas" text from a relative that we were due to see two hours later!) And so, with forgetfulness and spam, we pay anywhere from 20 cents to $1.80 a month in text charges. Yet whenever we mention this to someone, usually to remind them not to text us, they advise us to just get a texting plan (starting at $5/month) to avoid the headache.


For the record, I actually have a friend that got so sick of trying to budget for the random texts, he actually decided to pay the extra $5 a month. Now, of course, he told me, they're getting their money's worth, since his wife has become addicted to texting. Talk about marketer's math!


I guess the real question here is whether we're paying these prices because the value is there, or whether we're finding the value because we've agreed to pay the prices. It seems like we rationalize an awful lot of things -- always with the help of commercials, telling us what new technology we need -- in order to feel okay about paying $50-100 a month.


How many people would text at the same levels (or at all) if they were charged 10 cents a pop? But since you're paying for an unlimited plan, you figure you may as well get your money's worth. Except, and maybe this is just my eternal question, if you wouldn't normally use it, are you ever really getting your money's worth?


Or is it just marketing logic at its finest?

Frugality & cell phones

Okay, well a lot has happened in not much time. But I have to warn you I'm just exhausted. Maybe it's the craziness of the past week or the stress of finances. But I'm a tad punch drunk and so my humor will probably be a little stranger than normal. Don't say I didn't warn you.


As I was discussing before, Tim is in need of some sort of electronic organizer. Seems like a great idea. I had all sorts of visions of him finding a cool little gadget for under $50 (well, definitely under $100) that could do cool functions.


Turns out there are about three kinds of electronic organizers that aren't translation dictionaries. They all have very small screens, and Tim has a hard enough time reading things at the moment.


Our next thought was to turn to PDAs. I figured, surely, since the Palm Pilot, this little bit of technology has come down to a reasonable price.


Yeah, I know. You haven't even read this yet and I can hear you laughing.


Now that you've had a good chortle at my naivete, we can discuss how ridiculous PDAs are. There are maybe three for less than $100. Which are also pretty much the only ones under $250 that I can find.


Most are $300-500 which some even higher than that! Ludicrous!


And note the catchy marketing ploys: They now refer to them not just as PDAs but as "handheld computers."

I wonder if Tim and I thought up cool catch phrases for ourselves if we'd be able to earn a better hourly wage....


At any rate, those prices might seem at least a little fair if Tim needed to send and receive documents or surf the internet for information. But we just want a decent, portable calendar with a to-do list and memo area plus some alarms to remind him to check the aforementioned calendar/to-do list.


So our choices are basically:

• Spend $30-50 in the hopes that they end up being good enough to meet his needs, but risk having to go ahead and get a nicer PDA anyway, having thus wasted the first $30-50.
  
• Spend $99 on a really low-end PDA that looks cheap and easily breakable and will definitely need more memory -- at least $30 more.
  
• Spend money we really can't spare (plus MyPoints and/or ink cartridge credits) for a PDA that is far more than we need.
  

Ain't it grand to have choices?


I decided to check out a fourth option: Smartphones. They cost about the same as PDAs, but there are large discounts when you team them with a plan. Currently, we're on a month-to-month arrangement with T-Mobile. And we get terrible service in our building. So it's worth a look around.




Aside begins here

I have a take a moment here and say: The rampant technological evolution of cell phones is actually quite frightening.


I thought camera phones were silly. And keyboards (way too small for my fingers) to text. And why would I want music when I have an MP3 player? Also, why would I want to surf the Internet on my cell? I don't know about you, but my eyes aren't big on reading emails off a 3" screen.


So I was already vaguely disgusted by cell phones -- but now that I've looked at smartphones, I'm beyond the pale. (Which is funnier if you know me because my skin's so light I'm practically see-through.)


GPS so you don't get lost. Plans where you can watch local TV channels. PDA functionality so you can send and receive documents. Wi-fi so, even if you're as stingy as I am, you can still surf the web wherever wireless internet is available.


Oh and the new G1? You can scan UPC codes while shopping so you can compare prices instantly.


(This last one puzzles me. Clearly, they're trying to cater to those with frugal inclinations. But most of the people who I think bother to compare prices are also the sort of people who wouldn't, say, buy a $400 phone -- $180 with a 2-year plan -- that requires an additional $35 data plan just to function at capacity.)


I have decided that it's only a matter of time (and a few tweaks/additions of go-go-gadget arms and legs) before we'll have ourselves built-in chauffeurs with our smartphones. It's the next logical step, because all the damn things will already have GPS and so will know how to get everywhere.


In fact, thanks to the GPS, cell phones officially know where I am when I don't. Which means that I am clearly going to be one of the first victims when the various systems go sentient and take over.


Then again, after relying on GPS for so long, people will have no natural sense of direction and will thus be easy pickings. They'll just run around in circles as the hordes of evil machines close in, all the while crying, "Where am I? Where am I?"


It's a bleak prospect to behold, certainly.


On the other hand, it would imply that Tim and I should stop bothering paying off our debt and live it up. Because, really, we've got another 20 years, max.


Ah, dreams!


Aside ends here


See? That warning at the beginning of the post seems pretty relevant now, doesn't it?


Anyway: The problem with smartphones (beyond the fact that they turn all men into 5-year-old boys staring at a really cool remote-control car) is that we're still paying too much, even after the discount. And that amount we're paying is for functions we don't need.


Tim doesn't need to surf the internet, though it's surely nice. He doesn't need to be able to send and receive documents. He certainly doesn't need to be able to access our home computer, which is related to these smartphones only inasmuch as Neanderthals are in my family tree.


I'm actually a little afraid to bring a smartphone around our desktop. It's already threatening to fail yet again, since for some reason it no longer accepts our attempts to defrag. If we bring home a high-tech, handheld device like this, I am afraid we'd wake up to a small note inside the dust outline of where the computer had been.


The note would say that it had made its decision, that we were all better off this way, and not to try and stop it. And there are just too many bridges in Washington to go chasing down a suicidal computer.


So you see our problem.


But seriously, we're pulling our hair out over this situation. Tim wants a quick fix, which isn't financially prudent. I don't want him to go too long without an organizer, though.


Meanwhile, mom is considering switching to AT&T. Which would be great, except that Tim doesn't want the phone we could get for free. He could probably make do with it, but one that has much better capability and ease of use is the HTC Fuze. And with a plan discount it would still be $199.99 ($174.99 after the rebate). And, just to prove that there's totally a conspiracy going on, mom could get a more basic phone (she's not big on smartphones) that would get her $74.99 net profit after rebate. Which would essentially bring the cost down to $100.


But I still hate the idea of paying $100 for a phone. Especially when we're trying so hard to be thrifty so we can pay down more debt.


Not to mention, that's asking my mom to not only switch to a different plan for us (though she hates the reception from T-Mobile, too) but to go through all the work of the rebates just to help us afford a fancy gadget.


Am I being ridiculous?


Tim has offered to try and sell more cards. We got $209 (before mailing costs) of cards to sell off, but $160 of that is already spoken for. So that would be a maximum of $30 leftover toward the phone. And part of me feels like he should have to put that toward debt, not a fancy doodad.


Except of course that it's something that will help him function better in life and, when he's ready, work.


Argh.


I'm beginning to wonder if cell phones can ever truly be frugal. I mean, yeah, you can have the basic line and the smallest number of minutes. Some people have to have it for their job -- like my mom as a resident manager. So it's tax deductible.


But there are always new weird things the phones can do. And there are always add-ons: $59.99 a month -- but that's not including taxes. Or insurance (and that "basic" phone is still $200 so ya gotta keep it covered). Or data plans or TV plans that they make sound so innocuous.


For example, I was intrigued by the $16.99 "early evenings" option. It would make evenings start at 7 p.m. But something seemed weird about the claim that it was "less than 30 cents a day."


Here's how they get that: 30 days in a month, two (or more) lines in a family plan.


Uh, except, in my experience, family plans are usually billed to just one person. And if it is truly a family plan, ie for your kids too, you probably won't get any help with the costs.


Oh, plus weekends already have unlimited calling. So really they should be dividing by 20-25 days and by just one person. So that brings the cost to more like 75 cents per day of potential use.


Of course that doesn't sound nearly as good, does it?


Kind of like how Tim told me that the mobile TV was only $15 a month. Which would be more than what we would be paying for our phone line in the plan.


Or how, in Sam's Club, I was impressed by the lower phone prices. There, there was one phone that was $550 by itself or $300 with a 2-year plan. Sounds much better right? Except you had to get a $30/month data plan as part of your service and keep it for at least 6 months. So people are actually spending $480 (minimum) while thinking they sure did save a lot of money on that phone!


It's insidious!

*****

As a PS to this rant, we may have had our problems solved by a very kind gal in the blogosphere who has offered to send us her old PDA (she switched to a smartphone, natch) and wouldn't even accept my offer to repay her shipping!


I don't want to name her, lest she get plagued by all sorts of requests for free stuff. But if she doesn't mind the recognition, I encourage her to leave a comment with a link to her blog. It's about ADD, family, disabilities and all sorts of other things. I've only read a few posts but I'm definitely hooked!