Anyone here good with numbers?

[andrewducker]

I'm currently looking at the difference in price between going to a Samsung Galaxy Nexus by getting a contract (£35-ish/month) or by buying up front (£480+10/month). This works out to about £120-£140 cheaper by buying the phone myself, depending on exactly how I do it.

My question, then, is about discounting future costs. If I spend £480 now rather than in chunks then I lose the utility of that money over the next two years. How does one account for that?

I assume there's a simple equation I could plug in that would tell me to stop being so stupid and just buy the fucking phone, but I'd like to be sure...

Comments

[fearmeforiampink]

See, I wouldn't do this in the mathematical way you're approaching it.

I'd look at "Can I afford to pay up front?" and if yes on that, then "What else could I do with that cash sum?" less in terms of interest, more in terms of buying other things you might want or need.

Another question is the difference between the £10/month contract and the £35/month contract in terms of what they give you, free minutes, texts and internet-wise.

I bought my iPhone 3GS on pay as you go, used it on such for a year (spending about £10 every 2-3 months for more credit), when the free internet that came with the phone ran out, I switched to a £10 for 100 texts, 100 minutes, and Unlimited/2GB internet usage. Whilst I went over it a few times during the Yes campaign, outside of that I rarely use up all of my allowance, but I don't think there's any cheaper option that gets me some level of phoning plus what I really want — the internet.

If your usage is similar to mine, then the buy it and pay £10 a month thing is probably a good solution if the cash is viable — I looked at mine and was saving somewhere between £130-200 depending which contract I'd bought it on, I did have the money to buy it outright with, and I had no other things I desperately needed to buy with that cash.

[andrewducker]

There isn't anything that I could do for £500 that I couldn't also do for £x/month, due to the wonderful services of the financial system.

And for £10/month I can get 300 minutes, 3000 texts and a GB of data from 3. Which looks better than what I have at the moment.