I feel like I’m starting to lose my touch. See, I recently switched my phone service from my original carrier to Ting. For anyone not in the know, Ting is part of a new wave of cell phone companies that “ride on” the cellular towers of larger companies (Ting uses the Sprint network). These companies often offer plans with low fees and no contracts.
Under Ting, my bills have dropped from roughly $140 per month to $40 for service that is just as good as my original carrier’s. Switching took about three hours of research, one hour of setup time, and one phone call to resolve a technical issue. For this, I get $100 per month.
So why am I losing my touch? Well, once I made the switch, I wanted to shout it from the rooftops, and I sort of did. I mentioned my astounding 70% bill reduction to anyone and everyone I met for weeks. Friends who made sport of complaining about cell phone bills got an earful. Coworkers got to see my iPhone 5, same as the one I owned before I switched to Ting, as if to say “see, there’s no sleight of hand here, no tricks of the eye…”. And to friends and family for whom money is a constant drumbeat of stress, I pitched this as a rare win-win. Get the same thing you had before, except radically cheaper. How many people do you think I won over with this can’t lose scenario? Ten? Two?
To my knowledge, not a single person switched. A few seemed excited at first but didn’t follow through. But even more seemed not interested at all, and wanted to change the subject. People’s inability to take this good deal broke out around three main themes. It’s worth going over them, because if you’re going to be successful in your financial life, you have to get over each of these problems.
Focus on the Short Term
People inevitably brought up Early Termination Fees (ETFs). Many did not want to break their contract and pay hundreds of dollars to their cell phone carriers. They did not want to pay this money almost on principal. But principals shouldn’t play into what is a simple math problem. In my case, paying a $600 ETF bothered me not even in the slightest, since it would be paid back in six month of savings. I would have lost more money waiting out my two-year deal.
Cash flow as King
Many of us learn money through household budgeting. You’ve got your money in each month and your money out. Some friends felt that since they could afford their cellphone bills from a cash flow perspective, no change was necessary. But this does not consider how monthly decisions can affect long-term goals that cannot be tabulated on a monthly budget: investing, college, long term savings for durable goods, etc. Any of these goals would be well served by an extra $100 per month. Cash flow does not give a complete picture of a person’s finances, and should be combined with longer-term analysis.
Life can be hectic and unpredictable. Time is short. So I understand that for some, services like cell phones and cable “just work”. They’re easy, and the monthly bills pay automatically. Why would someone want to dig their hands in and muck up the one thing in their lives that doesn’t require any work? Well, because by doing this you are giving your service providers a “thumbs up” without them actually having to prove their worth. It’s exactly what they’d like you to do, and they’ll be happy to slowly raise your bill as a way of saying thank you. Don’t let them get comfortable. Spend the time to research other options, and be willing to sacrifice some of your time for your future financial health.
Over the next few weeks, try to make a good financial decision by overcoming the three problems I listed above. Let me know about it in the comments. Maybe I haven’t lost my touch after all.