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Phone Finance: How to Plan To Pay For Your Phone

Buying a new phone can be exciting, especially when getting upgrading from a dumb phone to a smart phone.  However, when dealing with the cell phone service and manufacture companies, it can be easy to lose track of what exactly you are paying for.  These companies do indeed try to trick you in a lot of ways despite what the lay out on the table.  The goal of any individual plan is to make it easy to switch into their company, but difficult to switch out.  So, it’s important to know what you are getting into before you pick a plan.

Predict Your Usage

One of the major concerns when picking a plan is trying to accurately predict how much data you will use.  Going over your maximum data use can often incur huge charges, so it’s best to set data warnings well below the data limit once the physical phone is in your hands.  Before that, you can try to estimate how much data you use in a month without your smart phone.  It’s important to think in months rather than individual Internet actions or you might end up overestimating and therefore over-paying for your data.  For example, if you send around 150 emails a month, it equals out to roughly 1.46 MB, barely a fraction of an average plan.  So, if you will mostly be using the data for e-mails, go with a smaller plan.  Video streaming however takes up a much larger sum of data.  5 hours of video streaming is more than a GB of data.  Verizon provides a handy calculator for most of the tasks you perform using their data plans.  You can check it out here.

Assess Service

Another aspect to consider is whether you can get good service.  While it may be a general trend that the more expensive a service is the better it is, this is not always the case.  The true strength of a service varies between locations so in order to ensure that the service will be worth the price, make sure to check that there is service near you.  A good barometer of this is whether or not there is a store nearby that sells phones of that particular service.  If they have setup shop, they must also be providing service to your area.

When Can You Upgrade?

Upgrade policy is another key aspect to think about when choosing where to buy your phone.  Obviously, the more upgrades the better in this situation, but even if you aren’t in the business of always owning the latest iPhone, upgrades can be extremely useful.  A good upgrade policy can help when your phone is damaged but not completely destroyed.  You can use the damaged phone until your next upgrade before replacing it, a much better alternative than buying an entirely new phone.  Upgrades are also necessary in the long run as eventually your phone will become obsolete.  Therefore a good upgrade policy is one that lets you choose when to upgrade but doesn’t penalize you for putting it off until later.  A bad example of this is T-mobile’s Jump program.  This program lets you upgrade as often as you want and gives you credit for turning in your old phone, but unless you upgrade once or twice a year regularly, the ten dollar monthly charge will quickly add up to more than the price of upgrading elsewhere.

To Insure Or Not To Insure?

Insurance is almost always a good idea when buying a phone. The best homeowners insurance let you put the insurance claim into upgrading rather than simply replacing an old phone, which can help supplant a poor upgrade system.  Still, try to figure out for yourself how likely damage or loss of property is.  If you have broken many phones in the past, it’s likely you will again.  If you text on the john, it’s pretty likely at some point you’ll drop it in.   In fact, with all of these tips, it’s important to understand how they apply to your needs personally.


There’s a lot to keep in mind when picking a phone and a plan for it, so try not to get overwhelmed.  There are plenty of ways to make the decisions easier by picking out what aspects are most important to you.  If you are a talker, focus on minutes.  If you text constantly, lots of plans offer unlimited texting.  There are as many phones and as many plans as there are preferences for how to use them, so get creative, if your needs are less conventional.  This is a good website for comparing a large amount of plans at once in order to find one customized to your needs.  Don’t just get stuck into the standard “everything” plans that aren’t personalized for you.  Go a step deeper and pick out the perfect plan to finance your phone.