£240 a year.
£240.
I pay £240 a year for the priviledge of using my phone and I don't really use up the alloted minutes and texts. The contract on my much battered Nokia 6131 ran out some time ago and since then I've been waiting for something truly fab to turn up. Something internet. Something connecting my wherever-I-am-real-world with the online world.
It has of course, the iPhone 3G but I can't really justify £360/£420 a year as well as a £100 bunt. That's rather a lot of cash to be spending when I'm trying desperately to save for a house and clear debt.
So, I'm going Low-Fi. I'm looking at cancelling my month by month contract with 02 and going to a top-up system. If anyone has any experience with Pay-As-You-Go then I'm all ears. When something Android powered and truly breathtaking comes out on a second-generation touch device, I'll probably go for that.
It's just another example of trying to maintain the Need-Want balance. I Want a phone that does all the Gucci stuff but I only really need something that'll run Google maps in times of need (as we found out during the holiday and we couldn't find Basildon park. Google maps could find it and it could also find the pub we were in the car park of). I don't need any more than that (or at least I don't think I did - I didn't use to need a mobile at all), so anything more is Want. I just want it.
Where a Want item on the Need-Want balance often tips to Need is that cool technology makes me happy. At that point, you could argue Need. It's not the cost of the thing. It's not the kudos for owning one, it's the fact that you can do cool things with it and that makes you happy. That thrill you get when you realise that you can say a big "Bollocks to You" to the M25 and randomly drive through Buckinghamshire, knowing that Google Maps will get you home (as it did Sunday). It's part of being a geeky sort of chap. Do I need the functionality to do it better (as the iPhone 3G would definitely do)? Perhaps it would have made me happier and more smug but I need to invest in property more, so the Need-Want balance puts the iPhone back into the world of Want.
Here is where I'm trying to think of a nice analogy of Need-Want with respect to price. If something is going to make life easy and it's cheap as chips, that's a need item and vice versa. There must be a nice graphical method of showing that for an given item:
As price increases, Need -> Want
As price decreases, Want -> Need
As total price of items in Need increases, Need -> Want
As total price of items in Need decreases, Want -> Need
Unfortunately, a simple balance is no good. Perhaps two jars with marbles. One with Need and one with Want. However, the jar sizes are variable. With technology, this is also variable with time, as I need a new computer when software won't run on the one I have.
Any thoughts? Do you find this sort of thing happening much to you? Do you think I'm just lost in a world of consumer hell? Am I just trying to justify spending because I live an essentially shallow life?
Comments
You sound a bit like me a couple of years ago, where you have enough disposable income to live conformtably in your current circumstances, but there is a nagging voice in the back of your head telling that that really you should be on the property ladder, and suddenly the deposit and costs look like an insurmountable amount...
My want/need balance changed drastically last year. I have a continual list of Things, and an associated priority. Last year the list looked a bit like this (P1 being utmost importance and P10 being lowest);
Big tele - P1
New motorbike - P3
New camera - P4
Upgrade computer - P5
Save for house - P6
Driving Lessons - P9
I can't even remember what I blew my bonus on l2 years ago, and this comes from the person who spent about £200 on 2 beanbags (in fact that may well be it...) This year everything has changed;
Bathroom - P1
New fence - P2
Sort out flatroof - P2
Sort out garden - P2
Sort out garage - P2
New carpet for stairwell - P4
Big ass tele - P6
New motorbike - P8
Upgrade Computer - P10
Suddenly all the gadgety toys drop like a stone, and the house eats everything. Gadgets that look old and worn out (such as my camera), suddenly get re-evaluated as "functional for several more years".
that said, you can go too far down that road, and end up never spending anything on stuff you want, as opposed to stuff you need. It's all about finding the right balance, and I think that's a very personal point for everyone.
That's cool, at what point do you draw the line between Need and Want or do you just use the priority list? Is Need/Want balance a handy way for you to form the list in the first place?
I think the Want/Need factor is used in determining priority. There is probably a factor for each, totalling 1. The factor ratio moves based on available funds comapred to total Needs.
So to take the above list, you initially get a want factor and a need factor. There is also a Cost factor (which is scaled from the most expensive to the least expensive). Please see the below spreadsheet for the values I have applied to each example.
You then apply a factor to Want and Need based on total available funds. I probably have enough disposable right now for about 20 Cost Points...as this is far below the Cost Total The Need factor must take precidence over Want. For the sake of this example we'll give the factors as
Want Factor : 0.2
Need Factor : 0.8
We now apply this to the scores above, and add the results together to determine a Priority. Simply sort the list by that Priority, and then go down until you run out of Cost Points.
From this you can see that Bathroom, Fence and Flatroof take the priority.
As Disposable Funds moves towards Total Cost, the factors would move more toward the Want side of things. The final determination of the split is down to personal choice, with a common sense input in there as well.
So at the point where Available Funds = Total Cost there is no bias one way or the other.
I've been on a PAYG phone for years now. The big pro is the cost, i use my phone to the tune of approximately £15 a month but unlike a contract i can by circumstance or by choice go a month or two on a couple of quids. Also if that "must have" feeling hits you it's not like you have to wait as you can just run down the credit on the PAYG texting everyone about your new awesomely better phone.
There are however a few cons:
You pay a premium up front for an all-singing all-dancing handset, I bought an Mp3 player rather than spend the extra £50 on the walkman handset I originally picked out as it worked out cheaper and I knew that losing/forgetting one doesn't entirely bork my day.
There is one annoying downside that I've only come across recently and has almost made me ragequit Orange PAYG as a result, not sure if the other networks use a similar system but if they do you WILL curse them. The top-up system is now voice activated... in parts. It used to be you'd type the full card number + amount + security stuff and admittedly a monkey with fat fingers may have found that system difficult but the latest thing is for them to store the card against the phone and with a few button presses you've confirmed that you are in fact topping up the phone you're using and you want to use the same card at which point teh killer kicks in, it will ask you if that's ok... I haven't yet said "yes" and had it say anything other than "that's great" but the next question is "how much would you like to top-up". In a quiet room and without too much slurring it'll pick up the amount ok, but sods law you run out of credit on the move, normally by a busy road and you just know that when you say fifteen it'll translate the roar of the passing HGV to "fifty pounds".
Aside from that rather annoying drawback they also cram "offers" into every top-up call or balance check but being on a contract might have the very same thing for all i know...
oh and kudos pete for proving that you can score a huge bonus while putting more effort into a need/want calculation during the working day than most staff put into their jobs.
Yeah, my method involves looking at my bank balance and seeing if I can afford something or not.
Baron, how do you go about saving for something big? That can't really be done by looking at a balance?
Why thank you... All I can really say is that I have an incredibly good marketing department working for me... I was just considering editing it to add in a Common Sense Factor to the graph, which was mentioned in the text but not realised in the images...
//added - There is also an assumption that there are effectively infinite items at 0 Need and 1-10 Want, so that you'll probably never actually reach a 1:1 Cost/Disposable ratio...
...maybe it should be a curve, rather than a straight line?
I put money away for it. I work out the budget required for it and the time remaining before I need to get it and then I save.
I look at what I am likely to get in over the intervening time and see if I can afford it or not.
Barring unforseen problems that cost money arising, I work out how much money I have coming in and compare that against what things will cost.
For example I want to go skiing next year. I reckon it'll cost upto £1000 for a week. It should in fact cost less than that, but that is my budget for it. I have money saved that should cover that, but lets assume I don't. Between now and Dec I would have to save the cash. £166 from each pay package. I also get a bonus for the emergency response team thing in October, enough for me to work out that if I save £100/month and add in £400 from the bonus I'll be ok. If I can't afford that, then Skiing is a luxury, so therefore I don't go.
If I needed £1000 for something essential, then I either save if there is time to prepare, use savings if it's an immediate issue, or credit card if I am really stuck.
At the moment I have a £2K buffer saved for "stuff". At the moment that if allocated as skiing (£1000), mini holiday (£500) and spare (£500). The £100/mo is either saved or used for running costs (car, tax, tv license, house insurance).
I monitor my balance and make sure I am not going into the red. If I am heading that way then I cut back on small luxuries. Every few months I plot out my expenditure in Excel and see if there are any worrying trends. If I am spending more than I am earning I look at what I can cut back on. I always try to have some money spare to either save or cover unexpected problems.
Things I need overcome things I want. I need to service my car, I don't need to go on holiday. If I can't afford both then the holiday will get dropped.
I have things settled at the moment where I can focus on the bigger things and the smaller things will tend to be ok. The in-depth check will tell me that i am being to easy with my spending or not.
Last month I got hit by some unexpected bills. This month I'm not going by many luxuries, so that in theory my outgoings for this month will be less than my salary.