How to Use the COVID-19 Break to Save Your Family Money

COVID-19 break

Coronavirus pandemic calls for some money-saving plans

The coronavirus outbreak has disrupted the world, literally. The Australian government has made a series of moves to slow down the spread of COVID-19, and businesses have done the same. Most of these measures focus on keeping Australians at home to stem the chances of an even wider spread of the virus.

coronavirus case in AU

Coronavirus case continue to increase in Australia. src

But these preventative measures have a lot of consequences. As business are ordered to remain closed, they take some significant financial hits. As those financial hits become more significant, those businesses cut down on their staff. As they cut down on their staff, the a lot of Australians become unemployed. And with unemployment comes consumers’ refusal or inability to spend, which could impact the economy to the extent of a possible recession, if not worse.

In fact, Morgan Stanley economists and Goldman Sachs Group Inc. have declared a global recession as the COVID-19 pandemic shuts down entire industries in several countries. Also, with the bush fires having already caused a lot of damage to Australia, this coronavirus outbreak is increasing the likelihood of a recession in the country.

The Australian government has taken steps to mitigate the economic fallout. The first economic response was on 12 March, but a second set soon followed on 22 March. The responses so far total AU$189 bn for individual and household relief, business support, and flow of credit support.

However, whatever relief you, as an individual or household, might get from the government’s response is going to be temporary. In a recession, you need long term solutions that save you money and stretch your dollars a lot farther. And a great place to start is with your phone plan.

Phone plan expenses during a recession

In a recession, you become more money conscious. You make spending decisions based on what’s necessary and what’s not. The necessities are referred to as staples – food, water, transportation, and so on.

In today’s world, it’s very difficult to imagine life today without a cell phone, and so phones and plans have quickly become staples as well. And because entire families consist of multiple phones – perhaps even one or more per each member of a household – phone bills can become a very large part of family expenses.

Those expenses increase when you have a contracted phone tied to your plan (for instance, an iPhone plan). These types of plans typically last around 24 or 36 months, and are focused on newly released versions of phones. That means they’re usually very expensive, hence the need for lengthy contracts to pay them off in monthly instalment plans. However, those monthly instalment payments weigh heavily on your phone bill, adding to your phone plan to boost your expenses even more.

How to save money on your phone plan in case of a COVID-19 recession

Phone plans can really weigh on your expenses during rough times like the current coronavirus crisis, but you need your phone to function in today’s world. So how can you cut down on those expenses? We’ve put together some resources and tips for you.

Download our free phone plan buying guide

Finding the right phone plan is not easy, considering the many telcos operating in Australia today. There are the major telcos (Telstra, Optus, and Vodafone) and a bunch of MVNOs that resell the major telcos’ networks. But the existence of so many telcos in the market has increased competition, which is good for your pockets. How? Competition means you have a lot of telcos fighting to gain you as a customer by offering some great, value-driven deals.

But the offers are just so many. Each telco offers several plans for you to choose from, and you also have to figure out what kind of plan suits your needs. This is sometimes overwhelming, and so we’ve put together a simple guide to walk you through it. And, best of all, our phone plan buying guide is free to download.

The free guide explains:

  • Key facts about the different types of plans
  • The state of the market, supported by statistics
  • What those confusing abbreviations and terms telcos use actually mean
  • The best plans on the market, and more.

Compare long expire, prepaid, and postpaid plans

After reviewing our free guide, you should have an idea of which type of plan you want – long expire, prepaid, or postpaid (read this article to know even more about the differences).

  • Long expiry plans last longer than the typical 28 and 30-day recharge cycles. They might last 90 days, 180 days, even a year. They cater to customers who rarely make calls, but need a phone. They are usually prepaid plans, and you won’t have to renew until the plan expires – usually months later.

Because long expiry plans are paid up front for a bulk of months, you could save anywhere from 10% on a 6-month plan to around 25% on a 12-month plan. Also, you’ll usually be able to receive calls free of charge, so it’s a great option if you don’t make a lot of calls but you get a lot of them. Long expiry plans are a great option for the elderly if you’re looking to save some money.

  • Prepaid plans come with the benefit of not being locked into any contract. You’ll find a range of plans, even some as low as $5, so they become a great option for kids or just to save money. Even adults will find prepaid plans suited for them, with some offering large data allocations and even entertainment inclusions. Not being locked into a contract means you’ll be able to switch offers as much as you want, and this is great because new and better offers hit the market frequently.
  • Postpaid plans might lock you into a lengthy contract, and that’s the typical drawback (along with a credit check requirement). While you’re committed to an agreement to pay a certain amount for 2 or 3 years, better and cheaper offers will likely hit the market during that time period and you won’t be able to switch without being penalized. However, newer postpaid plans might be month-to-month, meaning you won’t be stuck with a lengthy contract. Postpaid advantages also include the fact that you don’t have to pay upfront like prepaid plans, and your plan renews automatically without you having to remember your recharge date.

Also, telcos like Vodafone and Telstra now offer postpaid month-to-month plans with no data overages. When you reach your plan data allowance on those plans, your data speeds get throttled to 1.5Mbps, allowing you to browse as much as you want until the next billing cycle resets your data and speeds to normal. This really saves you a lot of money if you’re a heavy data user who doesn’t mind the slower speeds after your plan data is exhausted.

Final words

To cushion yourself from what might be a rough year to come, it’s best to look for ways to start saving money now. You can start with your phone bill, asking yourself what type of plan you really need, what inclusions are necessary, and comparing all great offers to get the best deal.

Do you really need entertainment content on your phone plan? Do you really need an expensive new phone model you have to pay for over 2 or 3 years? Is that expensive contract plan really necessary? Asking and answering these questions and more can really trim down your monthly phone expenses. We’ve put together the best phone plans for a recession, and we’ve provided a free phone plan guide to make your decisions a lot easier.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.