Are Mobile Phone Contracts Really Economical?

This is the sad reality of the world today: technological advancements are getting more and more sophisticated, while the economy is getting much more volatile for the average employee. Although there are a lot of neat gadgets to purchase, people are slowly losing their purchasing power for them. This is why people continuously look for ways to save money while living a full life.

Mobile phones have become an integral part of people’s lives. No longer a luxury, a mobile phone is now a must have, whether you are a working employee or a rising entrepreneur. Each week, new handsets are being released, boasting new features and functions. However, how can an average bloke afford such expenses?

This is where mobile phone contracts come in. Normally, people buy mobile phones outright and then purchase a SIM card from their favorite network provider. Now, due to partnerships between mobile phone manufacturers and network operators, it all comes in one neat little package.

Budget-Friendly Contracts

So why are people saying that these mobile phone contracts are economical? Because for one thing, you don’t have to pay for the handset outright. For example, if you want to buy a new Samsung Galaxy S6, you might have to pay £1,900 more or less for it. Now, if you have that kind of money, it’s fine. However, not everyone can afford to pay that amount in one sitting. With mobile phone contracts, you don’t have to.

The purchase price is divided into small payments which you make throughout the lock-in duration. For example, if you opt for a 48-month contract, that £1,900 will be divided into 48 smaller payments. For some phones you might need to pay a deposit, but it’s more common to see a “no deposit” feature for these arrangements. This way, you get the handset you want, without having to break the bank.

Monthly Limits

Ever find yourself spending more than you need to? Ever had difficulty tracking your expenses for the month? If you’re that kind of person, then mobile phone contracts can help you budget your expenses. While the allowances feel limiting at first, it actually helps you control yourself from spending too much. With pay-as-you-go schemes, you might find yourself spending more than you need to if you don’t properly manage your expenses.

Most providers have a text service where you can check your balance for the month. This way, it’s easier to track how much you’ve spent already and how much you have left.

Some Things to Consider

The problem people have with phone contracts is that aside from the handset cost and the monthly fee, there are small charges and fees you need to pay. It’s just like paying for something via installment. If you pay in full, there’s no interest; if you pay via installment, there’s a small interest aside from the original cost. Going back to the previous example, if the original cost of the phone is £1,900, with mobile phone contracts you might be paying £2,400 or more if you calculate all the monthly payments for the handset alone.

There’s also a huge issue when it comes to excess fees. It’s a controversial move on the part of providers to keep the subscription open even though a client has reached their monthly limit. Any excess texts, calls or mobile Internet data will be charged.

Verdict

Even with its few hiccups, mobile phone contracts are still a great option for people who need to budget their finances. If you are trying to economize, try mobile phone contracts. It will definitely make budgeting easier for you.