Okay, much like the weaker first Usher track (I said what I said), the confession in this post is a warm-up to a bigger confession. And we’ll get to that later, but for now…
In my recent return to the bloggerwebs, I shared that I had bought a new iPhone 14. I know that seems like a fairly banal purchase for many but for someone with an iPhone 8, almost $68,000.00 of student loan debt, who is not employed full time, it’s a big deal. While I was contemplating a new phone purchase, I was also reevaluating other monthly payments. I have had T-Mobile since I left my parents’ family plan and I had it prior to my stint abroad. Back then, it was $55.00 for unlimited everything with no contract and no one else was really offering that deal. However, fast forward several years and my monthly unlimited plan with T-Mobile is $70.00/month with auto-pay; which still isn’t terrible, but there are now quite a few other players on the scene. In addition to low-cost carriers who operate on larger service networks, even titans like Verizon now offer low-cost plans. After a bit of research, and a holiday deal, I decided to switch from T-Mobile to Mint.
Through the end of the year, Mint is essentially offering a buy-one, get-one on its service when you bring your own number. All Mint plans are prepaid, so if you buy 3 months of service, you get 3 months free, or 6 months of service, you get 6 months free. While my phone was old and freezing badly, it technically still worked, and I could have probably kept it for almost another year before Apple stops providing updates for iPhone 8s in 2023. The financial calculation broke down as follows:
1) Keep iPhone 8. Stay with T-Mobile. – Phone cost: $0.00. Service Cost: $840.00 for 12 months. Total Cost: $840.00.
2) Keep iPhone 8. Switch to Mint: – Phone cost: $0.00. Service Cost: $180.00 for 12 months. Total Cost: $180.00.
3) Purchase iPhone 14. Switch to Mint: Phone cost: $929.00. Service Cost: $180.00 for 12 months. Total Cost: $1109.00.
First, I decided to get a new phone. Even if my old phone wasn’t dead, it was on its last leg, Apple will no longer provide updates at some point in 2023, and I kept reading about production delays that will lead to an iPhone shortage soon due to supply chain problems. Yes, I could have bought a cheaper, non-Apple phone. I could have done that. Second, I decided to switch to Mint because the difference between choices one and three was so small, and would entirely be made up if I keep Mint, or another low-cost carrier, for a second year.
I know what you’re thinking. “Ummm, AP, this just sounds like a person reasoning through a financial choice that while not wildly frugal, isn’t wildly spendthrift either. How is this a confession?” The financing, my blogger friend, the financing.
A couple of months ago, it would have been nothing to drop a little more than $1,000.00 on a new phone. Nothing. However, times have certainly changed for your old pal AP and this choice was much more significant than I care to admit. First, I was not prepared to dip into my $5,000.00 emergency fund for this phone purchase. I was not. Not dipping into my $5,000.00 emergency fund is my only point of financial pride at this point. I also wasn’t prepared to finance the phone using Affirm as the interest rates were close to 8%. So then I wondered if there was a way to “self-finance” it. First, I checked to see which of my credit cards was offering a balance transfer. Discover had the best rate at a 2% transfer fee for 0% interest for 12 months. However, I currently bill several recurring bills (insurance, etc.) to my Discover card and was worried about mixing payments. Next, Chase was offering 3% balance transfer fee for 0% interest for 18 months. Not terrible but definitely more than I ever want to pay in interest on commercial debt. Then I remembered that Chase would allow me to balance transfer through a deposit to my checking account. Which meant I could pay for the phone/service with a cashback card like Citi Double Cash, which offers 2% cashback, and then immediately pay off the Citi card with the Chase balance transfer, creating an effective transfer fee of 1%. This is what I did.
So, my confession is that I am now carrying $1,145.20 in credit card debt. My current plan is to just pay this off over the next 12 months, much like I would a monthly phone payment unless I have a lump of cash I can devote to it sooner.
Why was this important enough to blog about it? First, I think it’s important for me to be transparent about what I am doing with my finances. I don’t want anyone to ever read this blog in the future and think that it was smooth sailing 100% of the time, or as though I didn’t have to get creative. Second, I think I have felt like I have regressed in my career at several points over the past few months, in different ways. This has been tough even if it was largely a choice of my own making (I still don’t regret leaving Organization C). The only thing I have been clinging onto is the fact that I am still in a better position financially than I was a few years ago, in terms of both my actual finances and my mindset, and I am desperate not to lose either of those…