Richer by the Day
Ongoing ramblings about personal finance, and all related topics. If it has to do with money, it will be covered here.

Filed under Calculations, Saving

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Many readers of Richer by the Day would be surprised to learn that I have an iPhone.  Isn’t the iPhone the gold standard example of exorbitant luxury spending totally at odds with someone who blogs about personal finance and frugality?  It turns out that my iPhone actually costs a lot less than you would think due to the many ways it saves me time, money, and even electricity.

Before we begin, note that I didn’t say the iPhone pays for itself, but that MY iPhone pays for itself.  Your use, lifestyle, and alternatives could make it even more cost effective for you or a horrible waste of money.  Here is the analysis for my situation.

Background and Assumptions

The smallest talk plan has almost always been sufficient for my cell phone needs.  In this analysis, I’m comparing the cost of my previous phone service to the iPhone.  My first assumption is that I need a cell phone.  My old Verizon plan came with a free phone and gave me 450 minutes plus 250 TXT messages for $40 + $5 + taxes and fees.  A 20% discount through my employer made my monthly bill $43.  The iPhone 450 minute plan, 200 TXT messages, and required Unlimited Data plan costs $40+$5+$30 + taxes and fees.  I again receive an employer discount (17%) so my total bill is $72 per month.  So the premium I pay for having an iPhone is $29 per month.  That’s the expense I’m trying to justify.

There are obviously some apps that save me money directly such as those that help me find the nearest ATM for my bank and cheapest gas in my area. Beyond these obvious money savers, here’s other ways I use my iPhone to save:

Staying on Top of Deals and Opportunities

With constant access to Twitter (thanks Twitterrific) I can stay up to date on deals, promotions, and contests tweeted by the people I follow at all times.  So much of this info is time sensitive and before the iPhone I missed out on most of it.

The same is true with the RSS feeds I follow.  The iPhone’s newreader lets me actually read the feeds I subscribe to during short downtimes all throughout my day.  Since I read a lot of Personal Finance blogs, I get many money savings tips in this way.  I am able to read at least 10 times as many posts than I could when my news was tied to my computer.

As a Notepad

One of the simplest ways my iPhone saves me money - or helps me to generate new income - is as a notepad.  I keep a list of normal and sale unit prices different stores offer for grocery items I frequently buy.  So when I’m out shopping, I can reference this info to see if I’m getting a good deal.  Since my phone is always with me, I can also capture blog ideas as soon as they pop into my head.  This helps me to generate income producing content that I might otherwise miss out on.

Obviously both of these function could be served by an actual notetpad, but the reality is that the burden of carrying one around meant that I never did.  My phone was already occupying space in my pocket.  The iPhones intuitive keyboard and simple data sorting capabilities also makes it much more effective than the Note funcion of my previous phone, which would have been a real hassle to use for this purpose.

Retail Price Comparisons

I have long done most of my shopping online since the prices are almost always better.  With an Amazon Prime Membership, 2-day shipping is free so even that potential cost is reduced.  On those occasions when I am in a retail store, I never need to overpay again.  Checking the item on Amazon - or another price comparison site - quickly allows me to evaluate a deal.  I’ve placed book orders through Amazon from within a Barnes and Noble store when I found a new book I like that Amazon offers at a significant discount.

Saving Electricity

Since the iPhone allows me to access the data I regularly use my computer for (internet, email, twitter, and RSS feeds) I am able to keep my computer turned off much more.  I shut it down three hours earlier each night and turn it on 1 hour later each day.  As I mentioned in my Energy Audit Results, each extra hour I leave my computer off per day saves me $3.26 per year on electricity.  This extra $1+ savings a month isn’t much, but every little bit helps.

iPhone Functionality Precludes Other Purchases

The iPhone GPS is pretty awful compared to true navigation units, but as a full time telecommuter I only drive about 5,000 miles per year.  So the iPhone GPS is good enough for my needs and and saved me the $150 I was planning to spend on a Tom Tom One 130-S.  This one savings alone makes up for half the purchase price of the phone itself.

Having an iPhone also means that I don’t need to buy a separate iPod, e-reader (sorry Kindle) etc.

With so many great free games available for the iPhone, I also haven’t bought any other games (for my Wii, etc) since getting the phone.  I generally don’t buy games very often, but this is still a cost savings.

General Apps That Can Be Used to Save Time and Money

Once you realize the money savings potential of the iPhone, you start looking for new ways to save even more.  I’m in the process of selling my house, so I often have to leave for one hour blocks of time when a house showing is scheduled, even though the visitors typically only stay for about 10 minutes.  The iPhone came to the rescue once again.  Using the AtHome Camera app I can access live video from my webcam that I have facing my driveway.  Now I see when visitors arrive and leave and can return home as soon as they’re gone.  My average time away from the house is less than 30 minutes, meaning I save 30 minutes per showing.  With 4-5 showing a week that’s a considerable time savings.

A Specific Money Saving Example

I spent $10 purchasing the At Bat 2009 app, with gameday audio, to listen to out of market baseball games which saved $5 over the $15 cost of the web based gameday audio I usually buy.  This is also an example of a service that I spend money on that I’ll get significantly more value from thanks to the iPhone.  Tied to my computer, I only listened to about 25 games last year.  This year I expect to listen to almost all 162 Mets games, since the capability will always be with me.

Income Generation

Indirectly, owning an iPhone also earns me some money.  In addition to capturing blog ideas (mentioned above) my experiences allowed me to write this post.  Any advertising revenue generated by this post will offset my iPhone operating expenses even more. 

Final Benefits

Free WiFi Hotspots and Rollover of unused minutes are two final benefits of having an iPhone here in the states.  Though my frugal side limits the number of $4 coffees I drink, I do frequent Starbucks (and Barnes & Noble) more often for the included free use of ATT WiFi Hotspots.


The iPhone is a life changer.  It makes me smarter and more efficient and helps me to save time, money, and electricity.   Though some intangible benefits like increased productivity are had to quantify in dollar terms, the actual savings easily calculated in other cases certainly makes up for the extra $29 a month I pay for service compared to my previous phone.  Intangible benefits strengthen the case even more.  Though the phone certainly is a luxury that falls more into the “wants” than “needs” category, the fact that the iPhone pays for itself makes it a luxury that even a frugal minded personal finance blogger such as myself is happy to indulge.

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12 Responses to “How My iPhone Pays for Itself”

  1. ChristianPF Says:

    Well, that is a convincing argument - I have been holding off on it because I couldn’t justify the cost, but maybe I will rethink that when my contract is up…

  2. Tom Says:

    While this is all well and good, in comparison to other phones and contracts on the market that offer similar (in some cases greater) features you could be saving a lot more.

  3. Mike Says:

    @Tom: I’ll concede that there are more affordable contracts, but none of the other phones I looked at even came close to what the iPhone can do. For making calls, there are certainly better phones, but it’s all the other features that sold me. The most superior feature is the availability of third party apps, which allow me to customize my phone unlike any other. What phone would you suggest as a comparable replacement for less money that can save you as much as an iPhone?

  4. dave Says:

    Great article and an argument I’ve made myself in the past

  5. Dustin Says:

    Funny. The tone of the article sounds as if you are still trying to convince yourself! j/k I have an iPhone. I won’t say that it saves me money or pays for itself, but I love it. I haven’t been so attached to a device since I got my first Palm IIIc. Somewhere along the way I had to switch to Windows Mobile, then it just became less enticing to carry it everywhere I went for some reason. Now I’m back to feeling the need to always have it with me and use it for everything.

    I can’t seem to find a good reader though. There was an abundance on Palm and Windows Mobile. Any recommendations for a generic reader that supports a lot of different books. The Kindle still seems appealing to me, though I could never justify the cost of that.

  6. Mike Says:

    @Dustin, No need to convince myself. I would pay much more than I do for an iphone; it has added so much to my life. I don’t mean that in a shallow way, just that I use it constantly for every task imaginable. I think I would have driven my wife crazy with it by now if she too didn’t think it was the greatest piece of technology since google.

    I use Stanza as an ereader. It’s functional, but not great. I too would never pay for a Kindle. Even if it works great as an Ereader, which it seems to, I expect more than single functions from expensive devices. My iphone has spoiled me in that regard as well.

  7. BOB Says:

    Nice post!
    I tend to use my phone (non iPhone) with less care. So if i drop it or a few scratches won’t bother me that much.
    Worst case if i lose my phone I don’t worry a whole lot and its very less expensive to replace.

    Any suggestions on how to handle this?

  8. Mike Says:

    @BOB, That’s a good point that you make. For drops, I have a hard case for my iPhone (ifrogz Luxe Case for iPhone 3G, 3G S (Blue/Black)) which certainly seems to help. I’ve dropped my phone many times and haven’t had any problems. The included screen protector has also prevented any scratches from occurring.

    For replacement, all I can say is that I’ve never lost a phone so far, and hope that I never do. You’re right that it would be much more expensive to replace in that case. The two things I have going for me are that I could buy a model with less memory (I have the larger memory now) and that the newer models cost less than my current phone would have when I bought it.

    Thanks for your comment!

  9. Kyle Says:

    Your justifications are rather weak. Sounds like almost everything you mentioned can be done better (and cheaper) with a PC/laptop and a good cheap cell phone. Besides, anyone who tweets constantly for the best deals using mobile data service can’t be saving money!

    Smartphone only makes sense if you must have only ONE device that does everything…even if it doesn’t do any of them well.

  10. Paul Says:

    My HTC Touch Pro can do everything I need, plus:

    I tether it to my PC to eliminate the need for a PCMCIA/USB wireless modem

    It costs $30 a month for unlimited data and 500 minutes of talk time with Sprint

    Windows mobile has many more apps than iphone - considering that even Age of Empires for the PC has been ported to it.

    This article can be applied to any smartphone really… except maybe Palm OS as it gets more dated.

  11. Paul Says:

    Also, I use a Kindle for taking notes, reading RSS feeds, research (search function is great for my work and finding quotes) and reading books.

    Single function?

  12. We Buy Houses Houston Says:

    Another way that your iPhone can pay for itself is with
    opt-ins to local deals. There are restaurants that offer
    deals for example if you text “hamburger” to 90210
    you get a free hamburger with a drink or something like
    that. Look for these they are not everywhere yet but
    you can get a free lunch sometimes. iPhones rule.

    David G.


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