This NYT article caught my attention recently as it described how challenging it is for consumers to analyze cell phone offers:

One wireless phone plan allows customers to upgrade to a new phone in less than two years. Another allows a pool of data to be shared across multiple devices. Yet another offers unlimited data, but only at slower Internet speeds. All these perks are there for the taking, yet the average wireless phone bill continues with its monthly sting.  Confused yet?

Welcome to the confounding world of wireless phone billing plans. Even executives at the wireless phone companies say their industry has created a Tower of Babel of competing plans, with highly specific requirements and offerings and even, in many cases, unique language buried in the fine print.

With nearly 80% of teens having cell phones, it is an engaging and useful lesson to have them analyze their own plan (yes, including the fine print).  Since many of them may be under their parent/guardian’s family plan, this will also help foster conversation between them about a financial matter.  For those students, that don’t have phones, they might enjoy analyzing offers from several top providers to see which one might work best for them.

As the article suggests, given all the permutations in the plans, a spreadsheet is necessary in order to compare.  Ask the students to develop a list of the features of their own plan by bringing in a monthly bill or printing out the plan description from their online account.  What are the features that they should report back on?

• Carrier name?
• Individual or family plan?  If family plan, number of lines/devices on the account.
• Phone model(s)?
• Cost of phone at purchase?
• # of Talk Minutes
• # of Messages
• Data plan (in GB per month)
• Contract (yes/no).  If yes, what is end date?
• Monthly charges (family or individual)

Class discussion:

• You can create a Google spreadsheet and have students fill in a column with the information on their plan.  Students can then spend time analyzing the variety of plans to figure out which one looks best.
• What should become apparent through this exercise and by reading the NYT article is the multitude of plans that are out there and the challenge of comparing different plans.
• Ask students what drives their monthly charges?  Is it calls, messaging, data?  Since many plans offer unlimited call and messages, they may discover that data usage really matters in determining cost.
• Another important point with monthly charges is that they don’t go down if you use less data than you have signed up for.  You also will pay more if you use more than your allotted data plan which is why monitoring activity is so important.
• You might also ask students to evaluate their data usage over the past few months and see if there are opportunities for them (or their families) to save money.  Have them read this article, and identify 2-3 ideas on how they can reduce their data usage.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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