Canadian Finance Blog

Posted: 26 Oct 2011 02:00 AM PDT

As everyone who has been through puberty knows, self perception is often quite wrong. Even though if feels like everyone in the world is constantly watching you, judging you, and waiting for you to fail, it takes a few years to realize that everyone else was just as concerned with how they were being seen to bother paying attention to you. However, even as you grow and age, your self perception will fail you.

Just think of these classic examples. The soccer mom who thinks she is her teenage daughter’s best friend. The elderly man who thinks his eyesight is just as good as it was 40 years ago. The driver who thinks everyone else on the road is a horrible driver. Your self perception will fail you, and it could cost you money when it comes to signing up for services.

When you sign up for your cell phone bill, the sales person will often ask you what types of services you will need. Do you want to access your email on your phone? Do you like always having your phone with you? How often do you send or receive text messages? These types of questions will help them determine just what level of package you might need.

The problem is, you are probably the last person they should ask to see how you are going to use your phone. Why? Because you will answer based on your self perception. “Oh, I call my mother all the time! I best get a long distance plan”. Even worse, you might answer based on what you are hoping you will use the service for. “I’m going to use this new cell phone to text message all my old college friends! It’s going to be so fun”! How do you stop the cycle? How do you prevent this from occurring? You have two options. You either let someone else pick your service plan for you, or you go with what you think/hope you will use, and re-evaluate after 6 months. Has it already been six months? Let’s look at your service level plans.

Cell Phones

How much of your cell phone do you actually use? Did you get a smart phone because your teenage kids thought it would be the best/coolest phone you can get? Do you ever actually use the data plan that you are paying so dearly for? Go take a look! Most cell phone providers will be happy to provide you with that information. Either give them a ring, or go to your service provider’s website. Most companies will now show you your historical usage.

For example, I have Bell as my cell phone provider. They actually provide me with a “6 month trend” of my usage. In my case, I have up to 350 talk time minutes per month that I can use. I use approximately 1/3 of that each month. There’s potential savings! As for data, I use between 250-750MB per month. I pay for 1GB, and the next lowest option is 500MB. So I am probably best off staying where I am, or dropping down a level and seeing if I can restrict my usage a little more.

Television

How many channels do you actually watch? I can’t tell you how many times as a kid I wished I had more channels to watch. I was so sick of there being nothing on the 20 channels that we had. Every so often, at a friend’s house, I would get to watch Satellite TV. There were hundreds of channels, and within an hour or two, I would be bored. I was spending more time trying to find something to watch than actually watching it, if I could even find anything good to watch. There’s plenty of options, but when your options are primarily infomercials, local news for places that aren’t local, and reruns for B-movies, there aren’t actually that many options.

So take a week and write down which channels you actually watch throughout the week. There’s a good chance you are not using all of your channels. Once you do, take a look at your provider’s website, or give them a call. You may be paying extra for channels that you don’t actually watch. It’s worth checking periodically as well, as channel lineups and provider packages seem to change on a regular basis.

Internet

How fast do you need your Internet to go? How large of a bandwidth cap will you use? Just like your cell phone bill, you may be paying more than you need to for your service. The speed of your Internet will rarely affect your user experience. As long as the YouTube video loads after a few seconds, you should be good. As long as the download from Microsoft takes minutes, and not hours, you will be fine. As long as your games don’t lag and you can Skype your grandmother, there’s no real reason to need a faster Internet.

Most provider’s regular package should be more than enough for you. Don’t get me wrong, I love having a fast Internet, but there are few occasions where I can justify the additional cost for a few seconds difference. As for bandwidth caps, your provider should again be able to provide you with how much you have been using, and whether or not it is worth going up or down in cost for your personal needs. It could save you money!

How do you select your service plan level? How do you justify the additional costs?

Which Service Plan is Right For You? originally appeared on Canadian Finance Blog on October 26, 2011.