How to save money on mobile phone costs

Choosing the right phone and plan will avoid costly mistakes.
Choosing the right phone and plan will avoid costly mistakes. Photo credit: Getty.

Choosing a phone and plan based on needs will help people save money on mobile phones, experts say.

In the current environment of rising unemployment and economic uncertainty, budgets are tight, putting costs under scrutiny. Following the onset of COVID-19, use of electronic devices, including mobile phones, has increased.

In the first of a Newshub three-part series on reducing living expenses, experts share three tips for saving money on mobile phones.

Get the right phone, not the latest one

Financial coach Shula Newland, said that people are often tempted by interest-free repayments on the latest iphone. 

"People get stuck in expensive plans where they're also paying off a phone - they don’t realise they've tied themselves into another debt payment," Newland said

If income drops, they risk being unable to afford it. She urges people to look at which features they need and spend accordingly.

"If they can’t pay and fall behind, the contract can be cancelled and the amount remaining on the phone is owed upfront," Newland added.

David Cooper, head of services at Noel Leeming said that many people make the mistake of rushing into a purchase. As prices start from $100 to $2000 plus, there's a phone to suit most budgets. 

"There are a range of brands offering great value for money with a strong feature set, some which [people] may not be familiar with," Cooper said.  

"Look at your options, remember[ing that] if you're an Apple fan and change away from Apple, there is some re-learning you may need to do and that ecosystem of products you have at home might not work as well together."

Choose the right plan

Reviewing past and expected usage before choosing a plan will avoid unexpected costs.

Prepay plans allow greater control, as top-ups require an active spending decision. Monthly plans require a set payment in return for an allocated amount of texts, calls and data. 

"Most customers with reasonable usage levels will see better value for money on a Pay Monthly plan, so if you're controlled, it's worth considering," Cooper said.

Buying extra minutes and/or data on an entry-level plan can make it too expensive. On the flip side, some customers sign up to a plan that provides more than they need to get an upfront discount on a phone.

"[They] then end up paying more over the lifetime of their contract," Cooper explained.

Review your plan regularly

Inclusions improve as new plans are released. Users should review their plan regularly to check they're getting the best deal.

"You may find that for the same monthly spend, you can get more minutes, texts and data," Cooper said.

He also suggests looking at household mobile usage and total spend, as a 'sharer' plan may offer better value.

"Starting [from] around $80, this may seem more [expensive] but when averaged out per user, provides better value at an overall lower cost.”

Money can also be saved by removing the landline and using free call apps, such as WhatsApp and Facebook Messenger.

Understanding what phone features are needed, checking usage and current offers will help keep mobile phone costs down and avoid unplanned expenses at the end of the month.