The other day, I announced on Twitter that I was cutting the data plan on my phone and that it would save me $40/month.
I followed my Tweet up with a post about exactly why I decided to cut my data plan, and lo and behold, it has nothing to do with money. I do love money, though, and there is no better financial feeling than having more of it in your pocket, so I thought it would be fun to examine the financial benefit that I’ll experience from this choice.
My cell phone plan has reverted back to the basic text and talk plan, so that will save me a cool $40/month. For those of you who don’t have a calculator handy, that’s $480 per year.
$480 per year is no small number. Instead of inflating our lifestyle by $480/year, we plan on using that money for something more worthy than dinners out or useless trinkets. Here are a few things that we could do with that chunk of change:
Pay For a Month’s Accommodation in Bali
We could extend our honeymoon by a month, or go again sometime and pay for an entire month’s stay in Bali using AirBNB, based on the accommodation cost of our honeymoon.
Since I would save $480 for every single year that I go without data, I could do this once a year. Not bad!
Fly to Cancun
$480 would buy me a round trip flight to Cancun, according to Kayak’s Explore tool. It would score both J and I flights to Los Angeles, with the deal I got in June. With all of the travelling I’ll be doing in the next year, I won’t even need a data plan.
Turn it Into $3,379
Invested for 40 years at a modest rate of return of 5%, that $480 could end up being worth more than seven times it’s original value. That’s the beauty of compound interest.
If I invested it in an RRSP every year I went without a data plan, this number would be far larger. In fact, I’d be able to retire a year earlier if I went without a data plan for a number of years.
Save us $5,948
If we chose to put the $40/month toward the mortgage principle for each month left, could save us $5,948 in interest over the life of our mortgage, and shave about another year off of the payback time.
That almost $6,000 could buy us a pretty awesome trip to Europe or Asia, or a new (to us) vehicle.
Buy a Kayak
If we saved the $40 per month, in two years time we could buy a kayak. We’ve wanted a kayak for some time now, since we live close to the ocean and some lakes. How much fun would it be to have a kayak?
We could buy a used kayak in about a year of the savings if we found one on Craigslist.
Score a Canon Eos Rebel TSi
I’ve been lusting after this camera for awhile now. My iPhone camera does the trick for the most part but who doesn’t want a new toy to play with every once in awhile? Especially considering the amount of travel I’ll be doing in the next couple of years.
If I bought this in the states, I’d have enough after two years.
Snag an Apple Watch
Apple recently announced it’s new product: a watch. It’s not just any watch, it’s a smart watch, and it will be on the market in early 2015 for around $350. I could snag an Apple Watch in just under the average human gestation period, if I were so inclined (which I’m not).
Apparently, $40/month can go quite far! How’s that for an argument for picking up an extra couple of hours at work or starting a side business?
Go with the kayak. I was a competitive kayaker when I was younger, so when I got to my teen years I bought an ocean kayak, because NS is close to water as well 😉 I bought a beautiful kayak that I had for years… sold it on kijiji when I moved and someone got a pretty good deal on a very good condition kayak.
I recently received a COL raise and that is about what it breaks down to per month. Now it’s just being funneled to debt. Not nearly as exciting as trips to Bali and Mexico 🙂
Really adds up doesn’t it? Thanks for doing the math. Love how going without a data plan could mean a person might be able to retire a year earlier. I am imagining a poster at the cell phone store – Special – Data plans now only cost 1 year of your retirement. Upgrade your plan now. LOL
I kind of went through the same calculation when I cut my gym membership (had been doing at-home workouts anyway, so it wasn’t hurting my health at all). Turns out, $45 ended up going to my increased rent. 🙁 But it was fun to think about the cool stuff I could get with wiggle room in my budget. Most of it was food.
Way to go! Sure, it’s “only $40” but as you’ve proved, even smaller amounts add up over time. I bet you won’t even notice the data plan is gone most of the time since we’re almost always synched up to wifi anyways. Out of the list above, I think a kayak sounds like a pretty fun option – or else the month long stay in Bali!!
I vote for the kayak!
It’s nice to see how far an extra $40/month can go. Though, it’s sort of like the latte factor – it assumes that people will actually save that amount rather than go spending it on other little things here and there.
Yes, $40 can definitely go far! Right now, our cable bill is only about $45 a month, but we are thinking about cutting it entirely. It will also add more time to our lives because we will probably watch less TV.
I vote camera, I love my Rebel 🙂
Very inspiring. When you look at it, it’s ‘small money’, but yet it can actually mean so much. Just replace 40/month with more and the possibilities are endless.
It’s amazing how small choices we make can affect our lives in such a big way. It’s a really good exercise to go through when I want to buying something… I can think of how much money I could save by not spending that $10 on something I don’t really need.
This is a great way to think of it. Sadly, if I found a way to cut $40/month from my budget, I’d probably still be bad and spend it on other things instead. 🙁 I am getting better though, at least I know my naughty habits now, lol. I hope you put that $40/month to good use. 🙂
It’s crazy how such a small amount of money can amount to so much. My dad was huge into investing and over the years he’s accumulated so much. He’s the reason why I love saving money and he’s made me become a lot more thrifty as well!
Awesome. Just think if you take the $480 and times it by 40 for the 40 years and then add interest to that, then the number is huge! Small things add up to big things over time. Way to go to give yourself a pay raise.
Oh, I love the Apple watch! $40 savings per month would totally make a big difference and buying a Kayak is a nice option too!
$40 is really good amount to save per month. I myself started with 25% of my salary. So far, I am still sticking to that, which makes me happy and contented with my savings.
I got the Cannon EOS Rebel earlier this year and I am in love. I had to talk to myself into spending that kind of money on a camera but I am so glad that I did.
(I actually found an awesome pacakage on Amazon that came with a tripod, an extra lense, extra memory card, and a carrying case.)
I have literally taken thousands of pictures in the past few months. It’s really nice to have and since I bought I feel more obligated to document more of my life in pictures!
I’m thinking of dropping down from all inclusive talk/text/data to a pay as you go plan, so this article was good timing. What will we do with the extra money? Well we’re not wanting for much right now and don’t have any travel planned for a while, so it’s probably going to get thrown on the mortgage. All those little bits add up pretty quick over time!
$40 can go a long ways. Good for you!
In April I switch my cellular service over to Republic Wireless. Now I have unlimited talk text and 3g data for under $30 (including tax). My old bill was around $100 a month so I am enjoying the extra money. It’s more money to put towards student loans.