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Mobile Phones and their effect on the Household Budget

According to a 2013 survey, 70% of British people own a smartphone. It is common for one household to have more than one mobile phone. This is leading to an increase in mobile phone spends.

What determines mobile phone expense?

  • How many calls do you make in peak times versus off-peak times?
  • Do you make most of your calls to mobile phones or to landlines?
  • How many texts do you send?
  • How much internet do you use on your mobile?
  • Do you make any calls to international phone numbers?

Typical mobile phone plan

A typical mobile phone plan will include handset model, number of texts, number of calls, and limit on data downloads.

Example 1: Samsung Galaxy S4 white

Based on your usage, you can get two deals, both priced at £25.91, from two different providers. If you text a lot, you can choose a deal from Orange, which includes unlimited texts, 1,000 minutes of talk time and 500 MB of data downloads. If you text a lot and you are a heavy user of the internet, you can go for a £25.91 plan from T-Mobile, which offers unlimited text and unlimited data along with 500 minutes of talk time. For the same phone, if you talk and text a lot, and you are a moderate internet user, you can choose the £32.58 plan from O2 with unlimited calling, unlimited texts and 2GB of data downloads.

Example 2: Apple iPhone 5 16GB

If you send many text messages, you can get a 24-month contract from O2 with a monthly charge of £24. 25 each month. Under this plan, you will get unlimited texts, 500 minutes of talk time and 500 MB of data downloads.

If you are heavily into texting as well as calling, and your internet usage is also higher, you can choose another plan from O2, which has a charge of £27.50 each month. In this plan, you will get unlimited calls, unlimited texts, and 2 GB of data downloads.

How does mobile phone expense affect your household budget?

According to a survey, a four-member family is paying around £140 a month on mobile phones, which is higher than what they spend on electricity or gas. One of the key reasons behind this high spend is the choice of a wrong plan. According to a 2012 survey 26 million or 74% British mobile subscribers are in a wrong tariff plan when compared to their needs. To better manage this spend, you should go for a plan, which is best-suited to your requirements.

Use our household budget calculator to see what percentage of your household budget goes on mobile phones.

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