Tuesday, April 7, 2009

Super Savings From Pay As You Go Plans!

Hope everyone likes the new layout. Looks a bit more uniform than my last layout. Thank you templates =).

Today I will talk about those "Pay As You Go Plans". The theory behind them is that you can pay for whatever you need to use then save by not using the plan until you run out. Is this what frugality advocates in definition?

I would have to say yes. Frugality is a lifestyle where you use practically any mean to save money. "Pay As You Go" has hit the radar for today's discussion.

Well what is "Pay As You Go"?

Pay is you go is a term for a type of prepayment. It basically means that you select a service for its lack of contract, you get what you want and the company offering the service gets their money--no questions asked. Pay as you go can be a good way to save money, but you need to watch out for imitators. Namely phone companies that "offer" this service.

Pay As You Go Vs. Pay By The Day

It should be common sense, but not quite. Many people are under the impression that pay by the day plans are a way of being frugal. The unlimited option would actually save you more than a pay by the day plan. One thing is that you take the use of your phone and pay $1/day regardless of use plus an additional dollar per day for other services. In other words you literally pay $60-70/day for the use of your phone. Tracphone offers a true pay as you go plan plus you can double your minutes if you talk a lot on the phone. I do not so I switched to them and I am paying way less than a monthly prepaid service. I am probably paying about $5/month of service. No fooling. there is also a plan where you can take all of your calls from the Internet. The main carrier for this is Skype: a Internet phone company. There is also a device that you can use for your phone for roughly $40 that can be about at Radioshack of all place. The service allows you to make unlimited calling for $20 per year and that includes international calls as well!

And There Is Monthly

There are plans to lease your phone or a car out there, but consider this: how long do you actually use a phone or a car in one month? If it is not a lot then you should probably switch to just a pay as you go plan.

On cars I have to make a special note about rentals brought up in David Bach's book "Fight For Your Money". If you have to rent a car do not get surcharged for 'Peace of Mind'. Rent the car OUTSIDE the airport and you will avoid a lot of headaches. Also ask for a dollar amount beforehand so the dealer cannot up sale you. If you let people cajole you into renting a luxury car, then you deserve to be broke. If you cannot get the deal you want, leave the store. Airport car rental places will generally charge you double for a service that you do not need and that is their 'convenience'.

For the Business Person

Getting a pay as you go is in your court. If you find yourself making a lot of calls then getting a plan that has restrictions on how many calls you can make probably is not for you. But this does not mean you should get ripped off and get a plan that does not fit your lifestyle. Simple analyze your phone or car uses and figure out whether or not you can benefit from a plan that is unlimited. I use to be on one of these plans while I was in college.

I was making a lot of calls and needed the added service. But once I got out, the amount of calls I would make slowly died down and I moved on with my life. I needed something cheaper so I can save more money. I was set on being frugal. Besides not eating out often, this was the next step I choose to eliminate liability from my lifestyle. Trust me, phone contracts are the pits. The more you spend to talk to someone, the more it costs you to make that money back up.

Pay As You Go Calculations

Take it from me all it takes is mental math for the plan I am on, but when I buy minute packages, I do have to make small calculations. I have a double minute plan pre-installed into the phone so what I do is take:

dollar amount/minutes= price per minute/2= real price per minute (for my double minute plan)For those of you not on a minute plan, take dollar amount then divide by minutes. Sprint is also cheap with its flat rate cards, in fact they are Tracphone's real competitor. Some of their plans mmight actually be cheaper than Tracphone, but you have to shop around.

For cars, I usually factor in the driver and gas, but I will keep this simple and just do the plans.

There are weekday and weekend plans. Weekday plans usually run about $70, but weekend days are roughly half that. Do not bother with insurance there because it does not matter. It is just a gimmick to keep you broke. Cars come pre-packaged with a fender bender insurance plan included in the warranty of the car. You do not have to pay for a plan in order to rent a car. If they tell you otherwise, leave the store--IT'S A SCAM!