Thursday, December 1, 2011

Expense Analysis - Cell Phone

Over the next few weeks I will be taking a long look at all of the expenses that I am responsible for monthly.  The first question is to determine if the good or service is needed at all.  If I do need it, can the expense be reduced on its own or can it be replaced with a cheaper version?  The overall goal here is to reduce expenses until I am able to save 50% of my net income (after tax).  At that point I will review again and see if the "sacrifices" represent any real hardship.  If not, I will continue further.

First up for review is my cell phone.  My natural inclination is to believe that it is needed.  I do not have a land line and I use the mobile for all calls.  I currently pay right around $75 for an unlimited amount of minutes, text messages, and a data plan that is the lowest offered, but one that I never go over. 

What do I use it for?

Everything.  I use it to make both personal and professional calls.  With the exception of my business partners overseas, who I contact with Skype, all calls made are on my cell.  I use it for checking email on the go.  I use the blackberry messenger service to chat with my girlfriend during the day.  When waiting somewhere I will often use the browser to catch up on news or the blogs that I follow. 

What activities can be eliminated or reduced?

In general, calls that must be made are made from home.  That opens up the possibility of just using Skype for my calls.  However, there are times ( a few times a month) when I will have to call clients from the road.  Additionally, I need a way for my clients to be able to get hold of me without setting a planned time to meet on Skype.  Email on the go is a similar case.  Almost all emails can be sent/received while I am at home.  However, being able to field emails when I am away from the desk provides me a bit more freedom.  I can take a slow afternoon to go for a long walk without feeling guilty about not being available to clients if they need me.  There are also incidents where clients will email me to change or cancel a meeting time once I am already en route.  This probably doesn't occur often enough to justify the data plan by itself.  The web-browsing could immediately be eliminated without sacrifice.  Actually, it would be beneficial to eliminate what I see as a time-waster.

Possible Savings

At this point, it makes sense to keep a mobile phone.  It also makes sense to keep the unlimited minutes, as there are no cost savings associated with reducing the service.  I need to check if I am charged for text messages, and consider the elimination if I am.  I probably exchange fewer than 20 messages per month, and that could be eliminated without a problem. 

The data plan is where it gets interesting.  The data plan is approximately half of the entire mobile bill, so the elimination would be a significant reduction.  I don't feel comfortable removing it immediately, but I will spend one month paying much closer attention to the times that I receive or need to send a message while I am away from my office.  The question to ask in each case is if I received any real benefit to getting the message immediately or if it could have waited until I got home without causing a problem.  I will review in one month.


The phone is needed.  The data plan may not be.  I will add this to my wait-list and re-visit in a month.


Darwin's Money said...

I've been trying to talk my wife into canceling the landline. No can do. she loves the damn thing. I guess with triple play through comcast I wouldn't save that much for canceling just phone. but it's annoying nonetheless since i never use it and she has a cell.

bnl said...

Just a thought... As you study whether data is required on the go, remember where you need the data. Is it mostly in wireless hotspot areas?

If it is, then you could consider a cheap prepaid phone and some sort of wi-fi enabled device (your current smart phone without the data plan, an iPod touch, a tablet, etc). The money you'd save in monthly fees would quickly pay for any additional hardware, and you'd only need to bring that HW around when you believe you'll need it.

Unknown said...

Darwin - It can be difficult getting your partner on board. Good luck. I find that I actually have quite a few areas where I want to reduce my time/useage despite the actual savings being fairly minimal.

BNL - Great idea, but unfortunately the times that I am thinking of are typically on the go and away from areas with WIFI. I usually bring my computer with me, so if there is WIFI I can check my email through that. The benefit to having email on my phone is that it allows me some degree of "being in touch" while out and about. I am hoping that I discover that this really isn't necessary. Cheers.

Amateur Hour said...

^ That last comment was from me