The $197,000 Cell Phone Switch

Just a few weeks ago, I decided to change cell phone providers. I had been with the same carrier since the days when a cell phone plan cost a ridiculous amount of money and offered you 100 minutes per month! Not quite the Zack Morris cell phone era but close.

I texted with a representative from the new cell phone company, and it seemed promising. The base plan saved me $110 per month plus they’d pay for my Netflix subscription and they take another $15 per month for setting up auto pay. The total savings was $140 per month.

The representative also said that they pay off whatever amount we owed on the current phones we had. That was another $500! To seal the deal, he said that there were no contracts….if we didn’t like the service, we would simply change to a new carrier with no fees or penalties. Seemed like an easy decision.

As a financial advisor, I’m always looking for ways to make saving extra money easier for my clients. My favorite strategy is to use impending events. These events could be a pay raise at work. It could be a bonus. It could be a bill that you recently paid off. Instead of asking people to change their lifestyle to save more, they simply have to use impending events to boost savings. No change in lifestyle, just deciding in advance to do something productive with these impending events.

This cell phone switch was such an event. So I ran some numbers. I’m saving $140 per month, which is $1680 per year. If I invest this money and it makes 8% per year, after ten years I have $25,220. After 20, $79,665. After 30, $197,207!

Full disclosure, the changing over of my current phone number to the new carrier was not without hassle. It took a few hours of my time on hold with customer service reps trying to help me make the change, swapping SIM cards, etc. But for nearly $200,000 in long term gain…I’m quite certain it was worth the hassle.

For illustrative purposes only, not indicative of any specific investment product.