The Phone

•The actual phone is a piece of equipment that you use. 

•There are flip phones, also known as clamshell phones, which have a hinge so the phone can be folded in half. If you have a flip phone that used a 3G network, your phone may not work any longer as many service providers have shut down their 3G networks. (To learn more about what 3G and the other versions of “generations” are, visit our Financial Friday post called “What the 3G Shutdown Means for Your Cell Phone“)

•There are also smartphones, which have advanced computing abilities. It is a phone and a mini-computer that can run applications, connect to the internet, and do more than just make basic phone calls and texts. 

•You can either pay the total cost of a phone or include the price of your phone in a phone plan package. There are different costs and benefits to consider:

•If you buy the phone, it is a one time cost. You will then only pay for your monthly phone service plan or pay-as-you-go plan.

•If you include the cost of the phone in your monthly phone service plan, your monthly expense will most likely be higher than if you buy the phone separately. This is because you are paying for the cost of the phone over time. Once the cost of the phone is paid off, your monthly phone service plan cost will decrease. 

The Phone Service

•It costs money to use your phone and data. This is what you are paying for when you have a monthly phone service plan. 

• Pay-as-you-go plan – This is also known as a prepaid plan. You buy credit from a dollar store, convenience store, or mobile store. This credit lets you make calls, texts, and use a certain amount of data. It is important to keep track of the amount of call minutes, texts, and data you have used so it doesn’t run out before you can buy more. 

•Monthly phone service plans – You can sign up for a contract with a cell phone service provider. It usually has a fixed term, or a number of years you are agreeing to pay a monthly fee for services like calls, texts, and data. This can include a discounted or “free” phone. The cost of the phone is built into the length you are committed to, so the phone isn’t really free. The contract outlines what services you will get, usage limits, monthly costs, and early cancellation fees. 

•If your phone lets you connect to the internet, you can use free wifi to communicate without having a monthly phone service plan. Check your local library or coffee shop for free wifi access. There may be a password that you can get from the business or organization. 

When you are budgeting for a phone, plan for the cost of the phone, whether it is a one time cost or will be included with your plan, and the monthly expense of the phone plan. Making this a part of your budget before you buy the phone or agree to a contract can help you make your payments on time. If you default or miss payments, this will be reported on your credit report and reflect negatively. 

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Thank you, Prosper Canada, for this information and these handouts that cover the basics! The information between the stars comes directly from a Prosper Canada module. 

Cell phone Information

Step 1 – Cell phone basics

Coverage: This means the geographic areas that the cell phone will work in. Not all service providers cover the same areas. Some rural areas have limited coverage. Does the service provider have coverage in the areas you require?

Add-On fees: Most service providers have a basic fee for service (system access fee) and a fee for being able to access 911. 

Government Regulatory Recovery fee: Your monthly fee includes this fee, ranging from $2 to $3, related to federal, provincial, and/or municipal mandates, programs, and requirements. Fee can change. 

Step 2 – Minutes and data

Minutes: Most service providers charge you for how many minutes you use on the phone. Some plans have cheaper rates for making calls at certain times. Most are cheaper during evenings and weekends, but the times vary by provider. For instance, “evenings” may start at 6pm for one company and 9pm for another. Some providers offer a flat fee to have your evenings start earlier. Most offer a fee for unlimited minutes. 

Texting and Data: Service providers also offer plans for texting and data. Text messaging can be unlimited or charged per text sent and received. Data is used when sending and receiving email or using the internet. You can get plans that include all of these, or you can pay for them separately. 

Step 3 – Features

Long distance: Long distance is usually not part of regular evening and weekend plans and is usually charged by the minute. Different service providers offer different rates for calling long distance. Some offer flat fees for people who make frequent long distance calls. If you are planning on travelling, you may want to purchase an additional package for a period of time to reduce your long distance fees. 

Roaming: Roaming is a service that allows you to use your cell phone outside of your regular coverage area. There are roaming charges for incoming and outgoing phone calls, text messages, and emails. These charges can be expensive. Check your service provider before using your phone outside of your coverage area. You may be able to purchase a special roaming package. 

Call display: Call display allows you to see who is calling before you answer. 

Voicemail: Voicemail allows callers to leave a recorded message on your phone. Voicemail plans vary from a completely unlimited number of voicemails to one or two voicemails. 

Call waiting: Call waiting is a notification that occurs if someone calls while you are on the phone.

Applications and games: There are all kinds of games and ‘apps’ that users can download to their cell phones. Some are free. Some you have to pay for only when you download. Some charge you every time you use them. 

It can be expensive to have a cell phone if you do not understand how your plan works and what it covers. For instance, some people use more minutes, data and long distance than their plan allows for. They end up paying extra fees. Some people spend a lot on roaming because they are often out of their coverage area. When it comes to cell phones, small costs can really add up. 

When choosing a plan and features, the key is to ask lots of questions. Make sure you know what each of these features is, how much they cost, whether you need them, and how much you will use them. 

Step 4 – The cell phone

There are many options for cell phones at a wide range of costs. The cost of the phone is often tied to how long your contract is. If you sign up for a longer contract, you usually get the phone at a lower cost or free. Some things to think about are phone size and weight, battery life, durability, keypad, and screen size. Do you need a fancy phone with all kinds of features, or will a basic phone do?

Step 5 – Prepaid cards or contracts?

Most service providers offer the option of prepaid cards or contracts. With prepaid cards, you buy a set amount of minutes and use your phone until they run out. Contracts are longer term; you have a regular monthly plan for a set period of time. There are advantages and disadvantages to both.

Step 6 – Your cell phone bill

It is important to review your bill to make sure that your plan is working for you. Make sure you are not paying for services that you do not use. It you are going over your minutes, have a lot of long distance, roaming, or text messaging charges, maybe there is a better plan for you. It might be a good idea to contact your service provider to see if there is a plan that better suits your needs. 

*Use Prosper Canada’s Cell Phone Checklist before getting a phone and choosing a phone plan. 

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Some service providers have programs that can help different groups of people get a phone or lower-cost phone plans. See some of those programs below. 

https://www.rogers.com/connected-for-success

Internet and phone packages for those living on income support programs, like the Resettlement Assistance Program (RAP), Guaranteed Income Supplement (GIS), Ontario Works (OW), Ontario Disability Support Program (ODSP), Rent geared to income (RGI), and the Connecting Families Program. 

https://www.telus.com/en/social-impact/connecting-canada/connecting-for-good-programs

Telus’ Connecting for Good programs support youth emerging from foster care, seniors living on low incomes, government-assisted refugees, Indigenous Women at risk or surviving violence, families who are in-need, and people with disabilities. 

https://www.bell.ca/Accessibility_services/Mobile-Rate-Plan

Bell customers with accessibility needs may be eligible for monthly credit off select Bell Mobility personal rate plans.