Author Topic: Please help me understand phone financing  (Read 1533 times)

financier

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Please help me understand phone financing
« on: December 28, 2016, 02:33:11 PM »
Hey all,

I'm a college student. I work part time and during the summers, so I have some income, and I'm looking to use some of that income to buy a new mobile phone.

All my previous phones were purchased with AT&T's two-year contract subsidies, but apparently the Wireless market works differently now from before. I want a Google Pixel, and either I can buy that for $650, or finance it with 24 payments of $27.04. Now, I have the requisite cash sitting in my bank account right now, but it seems to me that the obvious better choice would be to throw that $650 into SCHB or similar and do the payments, since the financing is at 0% APR. That said, I have little prior experience taking on debt (excepting college loans, but I'm not making payments on those yet), and I'm afraid there's a catch somewhere. What to do?

marty998

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Re: Please help me understand phone financing
« Reply #1 on: December 28, 2016, 03:20:27 PM »
$27.04 per month would just be the handset.

How much does the monthly data plan cost?

Daley

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Re: Please help me understand phone financing
« Reply #2 on: December 28, 2016, 03:27:42 PM »
Maybe you should give this a read before you plunk down any money.

$650 for a phone is ridiculous. Financing for that phone is equally ridiculous with a monthly payment that costs more than many people on these forums spend for their mobile service alone in one month.

There is a difference between need and want, and you will never save any real money until you learn the difference.

financier

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Re: Please help me understand phone financing
« Reply #3 on: December 28, 2016, 05:14:18 PM »
Fair point - the monthly plan is pretty important here, isn't it?

I'm still on my family's shared AT&T plan, and I don't pay for that. I do, however, care about my family's expenses and my contribution to those expenses. I've talked to my mom and sister before about switching to an MVNO, or even T-Mobile/Sprint, but they are very happy with their iPhones and not looking to change.

So as it is, I get unlimited talk/text and a shared pool of data (of which I use ~1GB a month) for free (or for the $20/mo "access fee," if you consider my contribution to family expenses, or for $150/mo if you think I could still strongarm my family into changing carriers and want to count all of our massive phone bill), and I'm pretty happy with that situation.

As for the cost of the phone: Yeah! it's really expensive! I'm open to suggestions for less expensive phones, but keep in mind that I develop for android, so I would like a phone that can run the newest Android OS.

Also: thanks for the superguide, Daley! I'm about halfway through it, and while the phone section smarts (what with my wanting to buy a shiny expensive money-hole phone on a major carrier plan), I do have some leads on how to lower our internet bill now.

Finally, the wants vs. needs comment wasn't really necessary. I feel like the new phone is pretty clearly a want, and I do recognize buying an expensive depreciating asset like a phone has financial consequences, but I can afford a $650 loss, and I really like shiny electronics.

Daley

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Re: Please help me understand phone financing
« Reply #4 on: December 28, 2016, 06:23:54 PM »
Fair point - the monthly plan is pretty important here, isn't it?

Not exactly. The important thing is not unnecessarily overspending and indulging one's mindless hedonistic consumption. Communications just happens to be one of the easiest and lowest hanging fruit to optimize.

As for the cost of the phone: Yeah! it's really expensive! I'm open to suggestions for less expensive phones, but keep in mind that I develop for android, so I would like a phone that can run the newest Android OS.

Then let me give you some valuable career advice. As a developer, don't be afraid to get your hands dirty with the OS itself, and don't be one of those software engineers that becomes oblivious to their own ugly code bloat because they're always running the latest and greatest. Find a cheap enough, low-to-midrange used/refurbished Android handset that you can replace the battery on and is just mainstream enough with just enough oomph to either run current builds of Paranoid Android, Android Kang, CM/LineageOS or build AOSP for yourself. Don't rely on the manufacturer to keep you current. If you have to spend more than $150 these days for that...

This will keep you humble and grounded in your labors, will give you an edge over your peers by keeping you better abreast of actual OS development and the practical implications of the new releases, and will keep you mindful and connected to the vast majority of Android users who will never have access to the latest and greatest hardware or current software.

Also: thanks for the superguide, Daley! I'm about halfway through it, and while the phone section smarts (what with my wanting to buy a shiny expensive money-hole phone on a major carrier plan), I do have some leads on how to lower our internet bill now.

You betcha. If you haven't already, follow the links to the website for the unabridged copy of the guide if you haven't already. The forum version only has half of the actual complete guide. It'd be insane trying to wedge it all onto a forum into a usable format.

Finally, the wants vs. needs comment wasn't really necessary. I feel like the new phone is pretty clearly a want, and I do recognize buying an expensive depreciating asset like a phone has financial consequences, but I can afford a $650 loss, and I really like shiny electronics.

My apologies for possibly offending, but I will still stand by my words - even and especially given your follow-up justification of being able to "afford" a $650 loss and liking "shinies".

Approach things from my perspective. Someone new has just rolled into a financial independence and early retirement forum, you don't know them from Adam, they have a total postcount of two, and their first post is talking about using postpaid AT&T phone service with subsidized phone purchases for years without providing any numbers and wanting to finance a $650 bleeding edge smartyphone that the very word "want" was used to justify its purchase.

Do you:
A) Give them a reasonable reality check, or;
B) Pat them on the head and help them be a good little consumer sukka?

Just remember, you have been entrusted as a steward of some of the most precious of finite resources in the world that impacts the quality of life of not only yourself, but of everyone you interact with both directly and indirectly on a daily basis. That stewardship is not of money, but your very own life and soul. The money you have and every other tool you use are just that... tools. Use them wisely to help you love and care about your neighbor, and make the world a better place.
« Last Edit: December 28, 2016, 10:41:59 PM by I.P. Daley »