Mobile Contracts:

Everyone has mobile contracts. And with the seemingly endless stream of new improved mobile handsets coming out, there seem no end to your mobile contracts.

Why is it that mobile phone companies are so keen on getting people to take out mobile contracts rather than just a pay as you go sim card and phone. Surely they would make more money by having you stay on a pay as you go tariff and buy a handset which on average costs around £300.00 these days for a decent one. Often much much more.

The fact is, mobile phone companies want you to take out mobile contracts as it is a more long term passive income for them. In fact it generates what is known as positive cash flow. This means rather than getting a lump sum of money for a sale of a phone, which is nice but also comes with drawbacks. Think about it. What would you prefer? Get a lump sum of money once and have  a lot of it taken away by taxes or have a nice steady monthly income that is guaranteed, passive and covers your running costs during lean months?

Well on a company’s balance sheet, I can assure you the positive monthly cash flow is a lot more beneficial than a big lump sum sitting there doing nothing. Even if it did accumulate interest, it would probably not be enough to keep up with the current rate of inflation. Anyway, the point here is that any company, especially mobile phone companies want a positive cash flow.

Making Money

So how can we utilise this datum for our benefit and actually make some profit or get more from our mobile contracts than what we are getting right now? The fact is, if you had a mobile phone for a few years, you will know that on an 18 month contract you can upgrade your phone, meaning getting a brand new one while keeping the old one for free. But not only that and here is the first of my money making ideas:

Tip 1

When you call the mobile phone company that you have your mobile contracts with or they call you, tell them that you do want to renew the contract or upgrade it but that you were looking at a different mobile phone provider as it is cheaper. This can be any mobile phone provider such as T-Mobile or Orange etc. They will be quick to reassure you that theirs is in fact the best contract and they will offer you the latest phone AND a discount on your contract. If you have been paying around £30.00 a month, which is average, then you should at least get a £15.00 discount, often £20.00. Further, you could also throw in that you need 100 more minutes but you don’t really have the money for this which is why you are looking for a different contract. Now get this, it will not cost the mobile phone provider ANY money whatsoever to give you these extra minutes or another bundle such as unlimited texts. Why? Because they already own the network and whole infrastructure so it makes absolutely not difference whatsoever to them and they will happily give you the 100 minutes.

Tip 2

If you take relatively good care of your mobile phone for the first 15 months of your 18 month contract and you upgrade your contract as explained in Tip 1 above, then you can take the latest handset or rather the most expensive handset your provider offers. You can simply go on Ebay and see what the most expensive phone currently is. Or Amazon, it doesn’t really matter. So you get your phone but instead of using it, you simply sell it on Ebay or Amazon or similar website. You can easily make £300 profit on the phone as long as you chose a new model that just came out. I have done this recently with 5 phones and made £1500.00 myself.

Let’s Talk Money

So let’s talk money and see what the end result of this would be as after all here on Money Ideas we are interested in money making ideas and saving money and with mobile contracts you can actually do both.

In Tip 1, you reduced your 18 month contract cost by at least £15.00. So over £15.00 over 18 months is a total of £270.00 you saved right there. However, you are also getting the 100 minutes for free. If you used to pay for these minutes because you went over your monthly allocation, then in general you would be charged £0.20 a minute. So per month, this would be another £20.00. £20.00 over 18 months is a massive £360.00!! This is why the mobile phone companies love you by the way!

Total Money Made

So let’s add everything up here:

£270.00 saved on line rental
£360.00 saved on overspend minutes
£300.00 for the mobile phone sold
£930.00 Total money saved over 18 months

Now bear in mind that not only did you save this money but you still have your phone from the initial 15 months contract and all the minutes and texts from your contract. At least 300 minutes, unlimited texts and unlimited Internet. That should be standard these days.

So this is how you will be laughing all the way to the bank. If you do the above for 5 different contracts in your family or your household, you save almost £5000.00 every 15 months!