Recurring expenses are insidious. Companies love signing you up for subscription services as it means a consistent revenue stream by default. The burden is on the consumer to take action, but momentum and inaction usually win out and the payments keep getting made.
Taking a hard look at these subscriptions and other recurring payments can be very effective in reducing annual expenses, thereby lowering your Target FI Number and leaving more money for saving and investing. Some expenses that don’t bring enough value can be eliminated. Others can be greatly reduced with a little intentionality (just get a month or two of that streaming service to binge your favorite show, no need to leave it renewing for the whole year!) However, there are some that are necessary but we can work on reducing their impact.
One of my favorite hacks is switching to a low-cost cell phone plan offered by a Mobile Virtual Network Operator. MVNOs lease bandwidth on existing cell towers instead of maintaining their own networks, so you get the same coverage as the major carriers. For example, Mint Mobile uses T-Mobile’s network while Cricket uses AT&T’s.
These carriers not only save on operating the network, but usually don’t have costly retail store fronts. While this contributes to the lower price, it also means you usually either need to bring your own phone to the plan or purchase one online. Often times your old phone may be locked to your old carrier, but legally they are obligated to unlock it at your request as long as you own the phonee.g. you are not still paying it off through a subsidized contract with your carrier, which is less common these days.. Similarly, they are also obligated to unlock your phone number so you can take it with you to your new carrier. The process is slightly different for each carrier, so search for the specifics based on your plan.
I use and can recommend Mint Mobile. They advertise a plan for $15/month. The catch is it’s a prepaid plan. The $15/month rate is the price for prepaying for an introductory 3 months. After that, you have to pay for a 12-month period to get the same rate. Adding in the taxes and fees, my last 12-month charge came out to $201.36, an effective rate $16.78/month. I wouldn’t even have gotten 2 months for that on my old T-Mobile plan! For people living paycheck to paycheck, paying their wireless bill up front might pose a challenge. However, for those of us pursuing Financial Independence and creating a gap between our income and expenses, we can take advantage of this opportunity.
That lowest cost Mint plan includes unlimited talk and text but data is capped at 4GB/month. Mint offers plans with higher data caps, including unlimited data for $30/month. This is another area where I prefer to apply intentionality. Generally, 4GB is plenty for general browsing and navigating and a little social media. I just make sure I’m not streaming video or infinitely scrolling social media while I’m off WiFi. I rarely hit the data cap, but it can happen when I’ve been traveling and therefore have been off of WiFi more than usual. I just purchase another GB of data for $10 and still come out way ahead, something I think I’ve only had to do about once a year.
You can choose your MVNO based on the strength of their network for the places you commonly need service. In my case, none of the networks have great reception at my house. However, many MVNOs, including Mint, also include WiFi calling, so I have perfect reception anywhere I have WiFi. This is an elegant solution that works better than the cell spots I’ve had from the major carriers. The last thing to double check is that the carrier you are switching to supports your existing phone, most will have the ability to check by entering your model or IMEI number on their website.
If you want to check out Mint, feel free to use my referral link and you’ll get me a discount off my next bill.
Are you still paying $100+ per month for your mobile plan? How much quicker could you reach your FI goal by switching to $30/month? $15/month? Use the FI Calculator to check!
Further Reading: Tom's Guide has a good article on the different MVNOs that are available across the different major networks.