Tag: Personal finance

Sliding Data Limits

Christian Leave a comment

If you’re looking to reduce your data use, I highly recommend using what I call sliding data limits. Start each month by setting a data limit that’s well below the amount of data you’re allotted. Each time you hit your limit, reset it to something higher. Each time you change your limit, increase it by a smaller amount.

For example, let’s say you have 7GB of data allotted each month:

  • Start the month with a limit of 3GB
  • If you hit the 3GB limit, increase the limit to 5GB
  • If you hit the 5GB limit, increase the limit to 6GB
  • If you hit the 6GB limit, increase the limit to 6.5GB
  • Etc…

With this approach, you’ll be able to keep tabs on your data use and prevent overages with minimal effort.

Setting data limits

Android phones have a built-in feature for setting data limits. Unfortunately, iOS does not offer a comparable feature. iPhone users aren’t totally out of luck though. Many wireless carriers allow subscribers to set up data limits or usage alerts from their online accounts.

In Android 10, you can set limits by going to:
Settings > Network & internet > Mobile network > Data warning and limit

Your phone may account for data use a bit differently than your wireless carrier. If you’re allocated 7GB of data each month, you may want to conservatively set limits as if you’re allotted 6.9GB of data each month.

Hitting data limits

If you hit a limit you’ve set, data access will be cut off. You’ll probably be prompted with an alert like this one:

Mobile data is paused notification

Data warnings

With Android phones, it’s possible to set data warning alerts rather than strict limits. With alerts, you’ll receive a notification when you’ve used a certain amount of data. Further data access will not be automatically cut off.

You might want to use both limits and warnings at the same time. For example, if you start a month with a 3GB limit, you might also want to set a 1.5GB warning to give you a better sense of the rate at which you’re using data.

Avoid Mismatched Phone Plans

Christian Leave a comment

There are probably millions of people in the U.S. that could save a lot of money by switching to a different plan offered by their existing cell phone carrier. For example, plenty of people pay for expensive plans with unlimited data, even though they only use a few gigabytes of data each month.

Recently, I angered a lot of people when I said Google Fi is generally too expensive for me to recommend the service. Several commenters argued I was wrong. Some of the commenters were polite. Others called me an idiot. Commenters often mentioned how much they used to pay for service from a major carrier and how much they saved by switching to Google Fi.

In many cases, commenters appeared to have purchased the wrong plans when they used major carriers. They were paying for data they didn’t need. Since Google Fi has a pay-for-what-you-use pricing structure, Fi subscribers basically cannot be on a plan that is mismatched with their data use.

Unsurprisingly, a person who barely uses data can probably get a better rate on a Google Fi plan than she can get on a high-data plan from Verizon. But Verizon also offers plans with small data allotments. We should make apples-to-apples comparisons when we can.

Examples

Below, I share excerpts from previous comments and my follow-up thoughts.

My wireless bill with Fi is $100 cheaper than it was with two phones on Verizon’s cheapest plan…a plan that includes more than 1gb per a phone is costly and unnecessary.
$100 cheaper!? I don’t think this commenter could have been on Verizon’s cheapest plan. Today, two lines of Verizon prepaid with 6 GB of data on each line (way more than the commenter desires) would cost only a bit more than $60 per month.

Google Fi unlimited calls and texts only costs $20 a month and when you add that to their pay-for-what-you-use data your monthly cost could be around mine at roughly $28/month, as I barely use any data…Now compare that with Verizon’s bare minimum unlimited plan starting at $70 before taxes and fees…Fi allows us to escape the tyranny of major cellular corporations and their overpriced plan structures.1
No! It’s inappropriate to compare the cost of service with barely any data use to the cost of an unlimited data plan.

Our monthly bill for all 3 lines with Verizon was around $180. It was reduced to less than $70 after switching to FI for the last 5 months.
Under $70 for three lines is a pretty good deal! No need to switch away from Fi, but let’s consider what comparable service would cost today with Verizon. With three Fi lines and a total cost under $70 per month, total data use is probably under 2GB per month.2 A postpaid, Verizon plan with 3 lines and 2GB of shared data is about $100 per month right now. Prepaid options could come out under $100 per month.

My bill with Verizon was always $105 a month for two gigs of Internet.
One of Verizon’s prepaid options right now offers three times that amount of data for about a third of the price!

Carriers create confusion

People who are on mismatched plans aren’t idiots. Many carriers like it went customers pay extra money for unnecessary amounts of data. Instead of alerting subscribers who are paying for too much data, carriers often take steps to encourage customers to over-purchase data. I call the cell phone industry a confusopoly for a reason.

Finding plans that fit

As mentioned earlier, one way to ensure that you’re not paying for data you don’t need is to choose a carrier with a pay-for-what-you-use model (e.g., Ting or Google Fi). That said, I think most people can find better prices with carriers that use conventional pricing structures.

If you know how much data you typically use (or have records of data use you can look back on), you can probably figure out how much data you’d like your cell phone plan to offer. If you’re unsure about your data use, I suggest starting small. Choose a plan with the smallest amount of data that you think might be adequate. Experiment with that plan for a few months. Add more data if the initial data allotment you started with turns out to be insufficient.

Start Small

Christian Leave a comment

With recurring expenses, I often advise people to start small and upgrade later if necessary. The rationale behind the advice is easy to illustrate with internet service.

Home internet is often priced based on the max speeds the service provider will deliver. Usually, max speeds are described as some number of megabits per second (Mbps). A cable company’s price structure might look something like this:

  • 40 Mbps – $30 per month
  • 150 Mbps – $45 per month
  • 300 Mbps – $60 per month
  • 600 Mbps – $75 per month
  • 1,000 Mbps – $100 per month

The problem

Most people want internet that feels fast, but not many people have a clear sense of how many Mbps it takes for a connection to feel fast. People who are uncertain often end up choosing a speed that falls in the middle of the options available. If that speed is sufficient, they generally stick with it. If the speed turns out to be too slow, they upgrade. With this approach, people won’t get clear feedback if they purchase faster speeds than necessary. People often spend years paying extra for high speeds they don’t benefit from.

In my opinion, over-purchasing happens more often than necessary because service providers encourage it. For example, one of the Xfinity internet options available to me right now involves a max speed of 60 Mbps. Xfinity explains that the speed is “good for up to 5 devices at the same time.” This is silly. 60Mbps might only support 5 devices if they’re all streaming ultra-HD video at the same time. For more realistic situations, a 60 Mbps connection can support far more than 5 devices. Xfinity knows this, but Xfinity has an incentive to encourage customers to purchase more expensive service than necessary.

I expect Xfinity’s cost structure is effective for the company since it allows them to engage in a weak form of price discrimination. In most markets, different people are willing to pay different amounts for the same product or service. If business owners can find a way to charge more money to the people who are willing to pay more, their businesses will be more profitable. Something like this occurs with internet service. People with tight budgets tend to start with cheaper, slower options. People with more money tend to purchase higher speeds than they need and often overpay for service without recognizing it.

The solution

Overspending is often easy to avoid. When services allow easy upgrading without any extra fees (as is often the case with internet), I advise people to start with the cheapest option that they think might be adequate. If you start with a low-speed tier for internet services, there’s a good chance you’ll find it satisfactory. If not, you can upgrade to the next speed tier.

The same solution works in other industries. Not sure how many gigabytes of data you need on your cell phone plan? Start with a small amount. If you hit your monthly allotment, add more data.

Not sure whether cheap, prepaid service will perform as well as postpaid service? Try prepaid service for a month. If you like it, stick with it. If not, switch over to postpaid service.

Starting small is a good idea in situations where services with recurring bills are easy to upgrade. While companies often penalize people who downgrade services, upgrading services is often easier. Companies are generally happy to have their customers pay more each month. That said, starting small isn’t always a good idea. For example, an internet service provider may offer discounted, introductory rates that customers are ineligible for when upgrading.

Motorola G7 Play Box

Moto G7 Play – The Ultimate Budget Phone

Christian Leave a comment

Earlier this year, Motorola released its G7 Play. Despite a full price of only $199.99, it’s an amazing phone.

If you’re interested in diving deeply into the phone’s technical specs, I recommend Digital Trends’ review. The phone’s hardware isn’t as impressive as what’s in today’s $1,000 flagship devices, but the phone still packs plenty of power. I haven’t had any trouble with the G7 Play’s performance in a month or two of use. Even the battery life is good. I expect the majority of smartphone users would be highly satisfied with the phone’s performance. That said, those looking for optimal performance on high-end mobile games or the best camera possible should consider other devices.

The G7 Play is one of a limited number of phones that qualifies to be on my list of universal unlocked phones. When the phone is purchased directly from Motorola, it should have the radio hardware and whitelisting necessary for compatibility and solid performance on all four major networks in the U.S. Versions of the G7 Play purchased from carriers and third-party retailers may have less extensive compatibility than devices purchased directly from Motorola.

The phone runs Android 9 and can do nearly everything I expect higher-end Android phones to be capable of. It even has a handful of clever features Motorola added—e.g., I’ve enjoyed the convenience of being able to toggle the flashlight on and off by shaking the phone side to side.

Here are the most meaningful negative aspects of the phone I can come up with:

  • There’s a notch on the front of the phone that houses a camera and a microphone. The phone would be more aesthetically appealing without the notch.
  • The camera isn’t as good as many of the cameras found on high-end devices.
  • NFC is not supported.
  • The phone only has 2GB of RAM. This may limit the phone’s performance when multitasking, but I haven’t had any problems yet.

These limitations don’t really bother me. I don’t think they’ll bother most other people either.

Motorola offers two other models in the same series of phones that cost slightly more but come with more powerful hardware: the G7 Power and G7.

Evolution of cell phones

Phones & Keeping Up With The Joneses

Christian Leave a comment

People buy a lot of shit they don’t need to impress other people. The phrase “keeping up with the Joneses” often has a negative connotation. I’m not sure that’s entirely fair.

People care a lot about their social status. Status is helpful for everything from getting jobs to finding romantic partners. Like it or not, buying fancy things can improve people’s social status.

Products do a better job signaling social status when they are conspicuous. Product designers and marketers know this. You don’t see sports cars with fancy engines and subtle, Honda Civic-like exteriors. Sports cars are flashy.

Electric cars tend to look like vehicles Martians might drive. There’s no engineering reason why electric cars need to look goofy. However, carmakers know that electric car owners want other people to know which cars are electric. Unique aesthetics send signals.

Recently, there’s been indications that high-end phones aren’t selling as well as they used to. I’ve seen a lot of plausible explanations: innovations have been limited, cheap phones are awfully good these days, and carriers don’t subsidize devices the way they used to. I want to throw out another possibility: fancy phones are way less conspicuous than they used to be.

The first time one of my friends got a cell phone, I was in fifth grade. At that time, just having a cell phone was cool. But my friend didn’t just have a phone. You see, his phone could flip.

Flip phone photo

Even from a distance, you could tell my buddy’s phone wasn’t just any old phone. It was a flip phone.

When flip phones advanced, the fancier ones tended to look cooler. Remember the Razr?

For the next several years, top-tier phones continued to have unique aesthetics. In 2007, the first iPhone was released. At the time, you knew an iPhone when you saw one. Only the iPhone had a screen almost as large as the phone itself.1

A few iPhone generations later, Apple managed to keep its iPhone 4 conspicuous with a sleeker appearance than earlier models.

In the last few years, companies have run out of ways to keep fancy phones conspicuous. It seems like the goal has been to develop phones that (a) are thin and (b) have as much of the body devoted to screen space as possible. Almost every phone these days is rectangular, sleek, and almost all screen. The Motorola G6 Play is a budget phone. It’s still thin, sleek, and mostly covered by a screen:

g6 play

It used to be relatively easy to tell what phone someone was using just by glancing at it. Now that most phones look similar, that’s much harder.

Your Mileage May Vary

Christian 2 Comments

It’s common to see some consumers giving a cell phone carrier glowing reviews while other consumers publish long rants about the same carrier. When it comes to cell phone service, your mileage may vary.

Cell phone users differ from each other in a lot of ways. It should be unsurprising that a T-Mobile customer in New York City might feel differently about the quality of his T-Mobile’s service than another customer in rural Wisconsin feels about her T-Mobile service. Even within a single geographic region, the way people feel about the quality of a given carrier will vary substantially. People use different phones and do different things with their phones. People are also pretty different. Some people don’t mind if they occasionally don’t have service while traveling in sparsely populated areas. I hate it. Some people are frustrated if their video streaming is limited to 480p quality. That doesn’t bother me.

When choosing cell service, realizing that individual experiences with a carrier will be highly variable can prevent a lot of frustration. Taking advantage of the fact that people’s mileage may vary can allow frugal consumers to save a lot on wireless service.

The frugal strategy

I would guess that there are millions of consumers paying $50-$100 per line each month for postpaid Verizon service that could switch to Mint Mobile plans costing about $20 per line each month without experiencing a recognizable decrease in service quality. While Verizon’s postpaid service is going to generally be better than Mint’s service, many consumers have great experiences with Mint.

Even if you expect to have a good experience with a premium carrier, it may be worth trying low-cost carriers beforehand. There’s a chance the low-cost carriers are capable of providing you with good service. Let’s assume a low-cost, prepaid service would cost you $20 per month while a premium service would cost you $70 per month and require a two-year commitment. If you try the prepaid service first and end up liking it enough to choose it over the premium service, the upside is huge. You can save $50 per month on each line and don’t get locked into a long contract. Over a two-year period, the financial savings come out to $1,200 per line. If you try the prepaid service and disklike it, the downside is pretty low. You experience one month of mediocre service before upgrading to something better.

Strategy outline

  • Consider getting an unlocked phone with near-universal compatibility if you don’t already have one1
  • Try a cheap, prepaid carrier for one month
  • If you love the carrier, stick with it
  • If not, try a slightly more expensive carrier
  • Keep trying more expensive carriers until you find one you like

Most people don’t use anything like this strategy. Some of them are leaving a lot of money on the table.

Google Voice Review

Christian Leave a comment

I love Google Voice, and I want more people to know how awesome it is. I find Voice to be most useful when paired with a wireless device, but it’s also great as a stand-alone service you can use from a desktop.

Stand-alone Google Voice

The stand-alone, personal version of Voice is free and easy to get started with (much like Google Docs or Gmail). Once you’re signed up for the web platform, you’ll be given a free Google Voice phone number. From Voice’s web interface, you can send and receive calls and texts. Calls and texts in the U.S. are free.

Here are a few examples of situations where Voice’s stand-alone service can be useful:

  • You’re selling something on Craigslist and want to list your phone number. You don’t want to share your normal phone number because you don’t want to be contacted at odd hours or receive spam calls. Listing your Google Voice number in your ad solves the problems.
  • You misplaced your phone in your house. No one else is around to call it to make it ring. After accessing Google Voice from a computer, you can call your phone yourself.
  • You’re seated comfortably at your computer, but you need to make a call. No problem! Make your call from Goole Voice.

I don’t think most people will want to use stand-alone Google Voice regularly, but it’s a super helpful tool in rare situations. I once had a phone die while traveling. Using Voice, I was able to reach out to a friend I was meeting with, confirm our plans, and let them know I wouldn’t be reachable through my usual phone number. That prevented a lot of stress.

Google Voice paired with a phone

Google Voice can be extremely useful when paired with a mobile device and a primary number. Once you’ve downloaded a Google Voice app to a device, you can send and receive calls or texts from either the Voice web platform or your mobile device. It’s a best-of-both-worlds situation. If I’m at my computer, I prefer to take calls over Voice since my computer has a solid internet connection and I often have a nice headset connected. Texting is also more pleasant with a full-sized keyboard. The Voice web interface even lets me view visual voicemails and contacts from my desktop. None of this requires me to sacrifice my mobile experience. Calls and texts will continue to come through to my phone when I’m away from my computer.

If you don’t have a primary phone number you rely on, all of this can be done free of charge. Just take the free number Google Voice gives you, pair it with your device, and treat it as your primary number going forward. Alternatively, if you have a primary number, you can port it to Google Voice for a one-time fee of $20.1 Having your number live with Google rather than a traditional carrier has amazing perks. Normally, regularly switching phone companies is kind of a pain in the ass because you need to port numbers between carriers. The porting process takes time, and issues can arise while porting. With Google Voice, no porting is necessary. I’ve used the same Google Voice number with a handful of different carriers. When I switch between carriers’ SIM cards, my primary number stays associated with the Voice app on my phone.

Voice may even allow you to lower your typical phone bill. If you make calls from your computer, you can avoid using minutes from your mobile plan. While calls made from the Google Voice app on your phone will use your plan’s minutes, you can choose to download the Hangouts app which allows you to make calls from your phone using data (Wi-Fi or cellular) instead of minutes.

Configuring Google Voice

It may take a bit of tinkering to get Google Voice working optimally. Here are a few settings I’ve selected to get the experience I want:

  • I have the option to screen calls turned off.
  • I have the option to always use my phone to place calls turned off.
  • I only pair Google Voice with one phone.2

Downsides

  • I’ve found Google Voice’s web application to have some issues when accessed via Firefox.
  • Normal video messages cannot be sent from Google Voice.
  • Occasionally, I’ve found text messages to fail to send through the web application (fortunately, the application alerts me when this happens).3

Fancy Phones: Now An Even Worse Deal

Christian 4 Comments

About twelve years ago, Apple released the first iPhone.1 It was an expensive device, but the original iPhone had all sorts of features that the competition lacked.

In 2012, the year the iPhone 5 was released, there were still significant differences between the latest, high-end phones and phones that were sold at lower price points.2

Today, things are different. Hardware has continued to improve, but it’s not clear that hardware improvements have had much to offer to the typical consumer. Today, you can get an unlocked Motorola G6 or G6 Play without any carrier subsidy for less than $200.3

The G6 performs well for the sorts of things typical consumers use their phones for. The phone’s cameras are pretty good. It has a fingerprint reader. Hell, the phone even does pretty well in terms of aesthetics. I’m struggling to come up with meaningful limitations it has compared to higher-end phones. It’s not waterproof?

Perhaps the high-quality of low-end phones these days explains why the latest iPhone models haven’t sold well. I don’t mean to suggest that higher-end phones don’t have some advantages. They do. Having a top-of-the-line phone these days may matter if you’re an Instagram star, you want to play intense mobile video games with top-notch performance, or you want to make your friends jealous. If you don’t care about those use cases, you can save a lot of money without forgoing many useful features.