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
Further Reading: Tom's Guide has a good article on the different MVNOs that are available across the different major networks.