Quick tips for saving money on phone contracts

Quick tips for saving money on phone contracts

I have a really good guest post here from the guys at Fonehouse. Some brilliant tips here on how to save lots of money with your mobile phone contract.

The average spend on mobile contracts in the UK is £45.60 per month. That’s a whopping £547.20 per year. The average weekly wage in the UK is £539 which means the majority of the adult population use one week of their working life per year just to own a mobile phone!

Using a few simple checks and tips you can easily decrease your monthly spend and save that money for something special.

1 – Know when to buy

Every year around August and September Apple, Samsung and other leading mobile phone manufacturers bring out their latest models. For people who don’t want or need the latest handset this is a major time to save money. The price of the previous generation handsets will drop drastically.

For example. The Samsung Galaxy Note 9 has just been released. When the Note 8 was released in September 2017 it cost £869 to buy the handset sim free. You can now buy the same device for as little as £558.

The Note 8 is still a fantastic device and the only major difference is an extra .1 of an inch in screen size and a Bluetooth S-pen.

So, waiting for the August and September releases will save money on any sim free or contract plan.

2 – Don’t let your contract roll

Most mobile phone contracts last 24 months. This helps make flagship handsets more affordable as phone retailers include the cost of the handset within the monthly fee.

The average monthly contract for a top tier device is around £40 per month. Once this period is over you still pay the same amount but the cost of the device has been paid off.

Putting your contract date in your diary can save you a fortune in the long run. You can either upgrade to a new handset, or if your happy with your phone keep it and transfer onto a sim only plan. This will more than half the cost your monthly cost.

Most networks will also let you upgrade early, maybe 30 days or 45 days early before the end of your contract. Check out this free early upgrade date so you can save money earlier!

3 – Pay upfront to save long term

As phone retailers take the cost of the handset into account on the monthly plan, this can escalate the total cost of the contract over the 24-month period.

Most consumers don’t want to pay for a device up front as the latest flagship phones cost more than £700. Paying a little towards the phone at the beginning of the contract will always decrease the overall amount you spend in the duration of the contract.

Let’s use an example from Uswitch.com.

The iPhone 8 64GB contract below comes with no upfront cost and 4GB of data. The total phone cost is £912 over the duration of the 24-month contract.

 

Below we spend £86 upfront for the same data bundle but we save £34 over the duration of the contract.

 

Choosing to pay for the phone fully upfront and buying a sim only plan is the cheapest way overall.If you are unsure this handy Contract vs. SIM only calculator works it out for you and shows which method will save you money.

4 – Cash in your old device

Many consumers have a drawer full of old devices. A second iPhone 8 64GB will sell for over £500 on eBay. Older generation phones like the iPhone 7 and Samsung Galaxy S7 still sell for above £200. Don’t let that money waste away and get your old handset on sale as soon as you have your new one.

5 – How much data do you really need?

The average data usage in the UK is a lot lower than the average data plan. www.statista.com report data usage will only hit an average of 8.9 GB globally by 2021.

Source – statista.com

The most popular data plan in the UK is 16GB. With the rise of available free WIFI in most locations the need for large data plans has dropped drastically. Understand your usage before signing into a 24-month plan is essential for the savvy mobile phone shopper. Below gives an indication of what you can do with 10GB of data per month.

Source – www.fonehouse.co.uk

As most contracts now come with unlimited minutes and texts, it’s the data that drives the monthly cost. Do your research and check your last three months data usage to understand how much data you really need.

There can also be a negative to not having enough data. Addon data is very expensive and can cost up to £5 for an extra 250MB of data.

6 – Use the FREE Wi-Fi

This has been briefly touched on above but Wi-Fi is readily available in 95% of venues. Even cars are starting to come with their own connections. If you are near free Wi-Fi, hook up to it and save that data usage for another day!

This is a collaborative post.

 

 

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Lynn Beattie

Aka Mrs MummyPenny

Personal Finance Expert

I write about personal finance made simple, lifestyle choices that will save you time and money, as well as products and services that offer great value.

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