Tuesday, January 8, 2013

Smart Phones on a Tight Budget: Good or Bad Idea


I have iPhone fever. For months now, I have agonized over whether to upgrade my flip phone when my contract ends (which ended this past October), or use my current phone until it dies, then try to revive it and use it again. I have talked about my small budget in previous posts, and that, accompanied with my student loan debt, truly has no room for luxuries like a smart phone which would add $30 a month to my bill. But what if I cut out other stuff like eating out, coffee, or my gym membership I rarely use? Could I afford it then? And even after I cut all that out, should I really use the extra money on a data plan each month when I have student loans to pay? After lots of asking around and research, this is what I have come up with:

I have too much debt.
I never wanted to be someone who complained about money and bills and then spent money on stuff I didn’t need and couldn’t afford. I see people who aren’t able to put food or gas in their car with their $90 a month cell phone plan (and I know how much it costs-I have been doing research for months), and I don’t get it. I hear of people who have their loans in forbearance because they cannot afford the monthly bill but have a smart phone. People think that when their cell phone contract expires, they have to run out and get a new phone. With all the advances in smart phones, people want them more and basic phones less so companies aren’t making basic phones as much. It is almost companies are forcing us to buy smart phones. Your phone can and will last more than the year and a half it takes for your phone upgrade. It will! I want to be able to afford gas in my car when I need it and to pay my student loan and car insurance when it’s due. Thirty extra dollars a month adds up. That is $360 a year that I could apply to my student loan!

I am willing to cut some stuff out of my budget, but not enough.
I would be crazy to cancel my gym membership to afford a smart phone. I need to go to the gym because that is all the exercise I get, and I most certainly don’t need a smart phone. Once I figured out that was not going to work, I started actually going to the gym to make use of the membership I was paying for every month. Health>portable internet. Always. As for the other stuff in my budget, anything I cut down or out should be used to go towards my debt, not a data plan.

Where I am at in my life cannot make room for a smart phone.
I live at home and thankfully do not pay rent. Most people my age have moved out and have many more bills to pay than I do. Until I can get to the point where my debt is clear and I am out of the house, there is no way I should think about an iPhone! Financial independence is much more important to me than being able to do FaceTime with friends.

I don’t want to give up the cell phone company I am with for something cheaper (sounds high maintenance but I worry about being stranded with no service).
I looked into not renewing my contract with Verizon (where I would be paying $90 with a data plan versus the $60 without) and paying less per month with another cell phone company. I found pre-paid and not pre-paid options out there with good phones that I would have to pay top dollar for (around $500-700) with a cheap monthly service ($30-50). Doing some math, if I had the prepaid service for 2 years and paid the above amount plus the amount of the phone, I am still paying less than getting a free phone from Verizon and paying $90 a month. Good deal, right? Maybe. However, as much as I drop stuff, I couldn’t justify forking out all that money for a phone whether I had a fancy Otterbox or not, nor did I want to part with Verizon’s top notch service. Sounds biased because it is, I guess, but it is how I feel.

I have the rest of my life to buy cool stuff.
I don’t need everything I have ever wanted right now. I am 22 years old. I have plenty of time to buy an iPhone, live in my dream house (for a while I thought about what it would be like to live in my dream house at 22 when I actually found my dream house for sale), settle down and have kids, or get the job with the big money. All good things will come with time.

So, I’ve decided…
To wait until I have paid off my student loans to get an iPhone. There might be an iPhone 12 at that point, but I will get it and love it and it will be great. I have done some serious consideration and been so bold as to post my decision for the world to see because we all know what happens when you tell everyone a big decision. You have to stick with it or you deal with a lot of outside scrutiny. When my education is paid for, I will celebrate with a smart phone. Until then, I will keep the era of flip phones alive.

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