Contracts – Like an Ex-Girlfriend

To me, a contract is like an ex-girlfriend that just won’t go away. They follow you around every where and just won’t leave you alone. You can end the contract with causing a huge problem and digging into your wallet. A contract is an evil thing disguised as a sweet little innocent piece of paper telling little lies into your ear.

Below you will find a typical conversation you might have with a contract. I envision the contract having a sweet seductive voice mixed with the voice from the computer in 2001 Space Odyssey.

Contract: Hello Adam. I’m here to save you money. You like money don’t you?
Adam: Yes, I do indeed. Who doesn’t?
Contract: Well then, just sign below and we’ll be together forever…
Adam: WAIT! You’re an evil siren trying to turn me to stone so I can’t go anywhere!

For many years dark clouds loomed over my head in the form of contracts. I had a contract at T-Mobile, the gym, and my rental. Each of these contracts had massive penalties for breaking them and ending it early. T-Mobile’s termination fee was upwards of $250 while my gym would force me to pay the remaining months and my rental was one months’ rent plus I would forfeit my cleaning deposit.

At that very moment had I wanted to just leave it all and end my contracts I would have to come up with approximately $1250 in cash and I would also lose my $650 deposit for the rental. That is starting to approach the $2000 mark!

Fast forward to a few years later and I’m almost contract free and I couldn’t be happier. No gym contract, no rental contract and my T-mobile contract has less than 2.5 months.

What spurred this post?

T-mobile recently announced that they are releasing some new “no contract” plans. I found this to be very interesting since up until now T-mobile have been contract Nazis! Want to change your minutes? New 2 year contract. Want to upgrade your phone? New 2 year contract. Want to talk to a customer service person? New 2 year contract.

Ok that last one is a lie but you get the picture….

I also did the math and the new plans are a bargain compared to what I was paying; before switching I was paying about $95 per month for unlimited voice, text, and data. The new unlimited no contract plans were coming in at about $80. After a quick review of the past months, I was using around 500 minutes per month and an absolute ton of data and texts. This allowed me to go down a step and sign up for the 1000 minute and unlimited data/text plan for around $70 per month. That is saving me $15 a month.

There were some stipulations to switch however. One of which is a $35 “fee” but that’s not a huge deal. I still have a few months left in my contract and at $15 a month savings it all comes out in the wash. After that however, I will be contract free and won’t be limited any longer.

Before entering into a new contract, make sure you ask yourself if a contract is really worth it. Are you 100% that you can ride out the contract and not change your mind mid way? I know for me the answer is probably no.

Some of you are saying “but Adam, contracts are required for some things” and I say to you maybe so BUT do your research. Most of the time if you just ask they will waive the contract for an upfront fee or an extra few bucks per month; sometimes not having a contract is worth the extra couple bucks.