Hacking your finances-DIY contract mobile phones can cut your mobile cost in half

Contract mobiles always sound exciting, you can have the latest and greatest Apple iPhone 11 64GB for free if you sign up two years of your life paying only £67.00 a month, for this you get unlimited data, calls and texts and the option to upgrade early by a few months doing a trade-in for the next phone.
So let’s break this down a bit.
The real costs
The phone new from Apple is listed as £579.00 and this comes unlocked so you can choose your sim provider.
A sim on a monthly contract(so your locked in for one month only) is available from various providers you can get unlimited calls and texts and up to 9G of data for under £10 a month.
24 months at £67.00 = £1,608.00 take from that the cost of the phone £579.00 = £1029.00 now let’s take our basic contract sim over 24 months which is £240.00. This leaves us with £789.00 left over.
So pure and simple this “free phone” is costing you £1368.00 over two years.
Essentially your paying for the phone at new prices twice over. How does that make you feel about contract mobiles?
So what’s the diy contract? Well put simply it’s putting you in control giving you the power to replace your phone without tying you into one of these contracts which are difficult to get out of. If your already in a contract don’t worry I can help you to break out with a simple path to follow. So please read on, btw I make no profit from this except knowing that the big players will loose a little profit and you will gain some savings.
How it works
So first things first you will need to buy a buy a phone if your nearing the end of a contract unlock your phone and go sim only. Your provider will try to sell you what seams like the world but don’t be fooled just say no! Because your going to cut your bill in half !!
Decide how long you normal contract is let’s say 2 years… for this example but you could do it for a year.
So 24 months, we’re buying the phone for £579.00 and a contract sim at £10.00 a month. So £240.00 + £579.00 = £819.00 total cost. So monthly over 24 months that’s £34.13 that’s almost half the price of the contract your paying with one of the top suppliers. Sound better?
How to start
Clearly you need to buy the phone, you may not have £579.00. This is where you have to put some effort in.. finding money is the problem here so to my mind you have two options.
Option1
Use your existing phone unlocked on your chosen sim only contract for 10 months. Most of the time when you reach the end of your contract your phone is still quite usable and you can get another 10 months use easily let’s imagine you were going to upgrade and pay this £67.00 a month. So we cancel the contract, unlock our phone, get our PAC code and migrate our number to our £10 a month sim. Insert the new sim to our existing phone. Open an instant access savings account with the highest rate of interest you can get (do some research but a Marcus account is my current choice), we are going to use this account as you new contract mobile… now this requires discipline, but if you can do it you will save thousands over the years in the future.
So you have your £10 sim, you have your savings account, let’s take our £67 and minus the £10. Set up a direct debit “DIY mobile contract” to your new savings account for £57.00 a month.
Instantly you have taken control of your contract… now in 10 months you will have £570.00 in that account. Let’s imagine your existing phone now needs replacing you have only £9.00 left to find…
So now you have paid for your device, you can keep it rolling at that amount and the remaining 14 months you will build up £798.00 buy the end of the 24 months.
You can then upgrade as you wish… stick to sim only and reap the rewards. Freedom to by whatever phone you want at the same cost as your previous contract.
You can now move onto option2 if you want to reduce your monthly amount as you have bought the phone.
Option2
Find the money to buy the phone upfront:
- Sell things you have laying around you don’t need on eBay, gumtree and the like.
- Work overtime and divert all the proceeds into a savings account until you have the money.
- If you have a birthday or Christmas coming ask people for contributions to your fund to buy the handset
- Get some side work at the weekend or evenings to earn the money.
- Do option1
I can expand on some of these in another post but in short most of us have the ability to find the money if we really focus on it.
So you have the £579.00 to buy the phone, now you set up the high interest instant access savings account as described in Option 1 and set up your direct debit “DIY contract mobile” at £24.13 to your savings account.
Get your £10 sim only monthly contract, get your PAC code and migrate your number. Buy your phone direct from Apple and away you go.
This means your total cost is £34.13 a month rather than £67.00. Over the full term that works out at £819.12 rather than £1608.00 this is half the cost to you…
Finaly
You could use the other amount and stuff it into your savings account as well and call it your pre-paid holiday fund… ??? £800 can go along way towards a week away somewhere hot once every two years :-)!
Oh and by the way you will also earn a few quid over the few years in interest too which is a nice feeling, earning money for doing nothing other than holding some money can get addictive.. and it’s also good money sense.
So if this interests you and you want to know more about structuring and hacking your finances to your advantage let me know and I’ll post some more ways I have hacked my finances to give me more freedom and choice.