# Ask Sherry: New cellphone & plan or stick with the old one?

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You can ask any question using the form here.

Thank you! ðŸ™‚

Okay….

# Would you prefer to buy a new cellphone paying for it full or getting a new plan more expensive than your current one to get the phone for “free”, considering that you would be saving around 6\$ per month for the first 24 months with the new, more expensive, plan?

I am sort of a terrible person to ask about this because I don’t have a cellphone of my own, and don’t really get or receive calls, but I can see what you mean in terms of needing it.

## How much is this phone?

Let’s pretend it is a fancy pants Super Blaster X phone that costs \$1500.

## How much more expensive is the plan per month?

Let’s say you are paying \$10 extra a month after the first 2 years is done.

## So, if we look at both options with the assumptions above and on a 5-year plan…

### OPTION ONE: New Phone paid out of pocket, Old Plan

Get new phone: \$1500

Keep old plan: \$144 – extra cost, because you wouldn’t get that \$6 savings for the first 2 years on the old plan, right?

\$1500 + \$144 = \$1644 out of pocket

\$1644/5 years = \$328.80 a year or \$27.40 a month

Get a new phone: \$0

Get a new plan: \$10 extra but only AFTER the first 2 years of saving, so you would only pay for 3 years at an extra \$10 / month after the \$6 savings for the first 2 years

\$10 x 12 months x 3 years = \$360

\$0 + \$360 = \$360 extra out of pocket

\$360 / 5 years = \$72 a year or \$6 a month.

The answer is if you are planning on keeping the phone for at least 5 years, then go with the new plan to get the phone for free.

Of course, I am making up numbers.

I don’t know if after 24 months you will be paying \$10 more than your old plan, if you went on the new plan, and I also don’t know if your phone is as fancy as I am imagining.

The main point is to take a realistic time frame (5 years), and do the math of the cost of the phone (paid in full or “free” with a new plan), and compare the numbers at the end to see which one seems more cost-efficient.

Hope that helped!

# Still have a burning question?

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