Every two years or so, I get a new phone – usually whatever is the newest iPhone available. In this most recent case, I noticed the battery on my iPhone 13 Mini was getting weak, so I decided it was time to upgrade to the latest iPhone.
Getting a new phone isn’t something that comes as a surprise to me. I keep track of all the phones I’ve ever had in my life and I pretty much always get a new phone around the 2-year mark (this time around, I went a little longer than two years, but it was still right around the timeline for when I get a new phone).
For most people, a new phone is a big purchase. The phone manufacturers know this too, so to increase their sales, they set up plans that allow you to pay for the phone monthly, rather than all upfront. It seems a lot of people opt for this route so they can afford to buy a new phone.
I don’t make monthly payments for most things in my life, but you may be surprised to learn that I’m technically always making a monthly payment on a new phone. But, this comes with a twist. Instead of making this monthly payment to the phone company, I make this monthly payment to myself.
What exactly does all this mean? Here’s how it works.
Paying Myself For My New Phone
The nice thing about phone prices is that they’re fairly predictable. I know that, in most years, the type of phone I get will cost around $1,000 (maybe a little bit more with inflation and additional features, but I’m in the ballpark at least). I also know that I’ll probably get a new phone about every 2 years (or around 24 months).
Knowing all this, I charge myself a “monthly bill” of $41 per month, which is automatically paid into a savings account specifically designated for a new phone. I’ve been doing this every month for almost a decade now. The amount I have in my phone account can vary depending on how often I get a new phone, but for the most part, I usually have more than I need for a new phone since I’m not always getting a new phone exactly every 24 months. I also sometimes buy phones that are less than $1,000 and the interest I earn on my phone account gives me a small boost as well.
Paying myself this way works out perfectly. I don’t notice the $41 “bill” that I charge myself each month and when the time comes that I need a new phone, I have money in my phone account ready to go. By using this strategy, I never feel a pinch when I make this large purchase.
I Do This With Other Things Too
Billing myself for a new phone isn’t the only time I use this strategy. I use this same strategy with other large, regular purchases too.
My computer is another high-priced item that I buy on a fairly regular basis. Historically, I tend to upgrade my computer every 5 years and I’ll typically pay around $1,200 to $1,300 each time I buy it. Knowing this, I bill myself $21 each month to go towards a new computer.
You can do this with basically anything that you know you buy on a regular schedule. It doesn’t have to be a very expensive item either. For instance, I pay myself for yearly subscriptions and my annual bar dues. These costs aren’t much for me and don’t really impact my budget or cash flow, but it’s still nice to have a chunk of money to pay these costs without thinking about it.
You can also do this for things that have an expected lifespan, although this takes a bit more planning and guessing. For example, a few years ago, my dryer broke and I ended up having to buy a new one, which was a pain because it was an expensive, unexpected purchase. After that happened, I looked up how long a washer and dryer are expected to last and now I save a set amount each month, with the idea that in 10 years, I’ll have the money set aside if I do need to buy a new washer and dryer. If nothing happens, I can leave the money sitting there or potentially use it for something else.
You Can (And Should Do This Too)
There are a lot of things that you can bill yourself for. You don’t need to do this for every regular purchase you make (it’d be pretty hard to do that), but you can easily pick a few things that make sense to you and regularly set aside money for those purchases.
At a minimum, I think a phone is something that everyone should bill themselves for. Figure out a timeline that works for you, then automatically set that money aside each month.
As for how to do this, what you’ll need is a bank account that allows you to create sub-savings accounts and lets you automate transfers. I use Ally Bank, which is my favorite bank account (I use it for my primary checking account, as well as my primary savings account for short-term and medium-term savings goals).
If you’d prefer not to clutter up your main bank account with a bunch of sub-savings accounts, you can also use a different bank that lets you make sub-savings accounts. Big banks like Discover, Marcus by Goldman Sachs, and Capital One 360 all work well for this strategy.
Once you have the sub-savings account set up, it’s just a matter of figuring out how much you need to save and how long you have to save for it. Then, you just automate a monthly transfer into that account. You set this up once and then I promise you that you’ll forget about it and be pleasantly surprised later when you have a stack of cash ready to go.
Final Thoughts
This strategy I use of charging myself a monthly bill for an expected large purchase isn’t anything new and ultimately, it’s a very basic strategy. However, it’s a strategy that, in my experience, despite being so simple and easy to do, very few people actually do.
For most people, I think saving for a new phone is a good basic starting point, as that’s something that is expensive and most people are buying fairly regularly. A new computer is another good thing to set money aside for – again, it’s something that most people are buying fairly regularly and is expensive.
If you bill yourself for these types of purchases, you’ll remove a lot of the stress that comes with making these purchases later. It’s doing simple things like this that’ll set you apart from others when it comes to your money.
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More Recommended Ebike/Scooters
Check out these other ebikes and scooters I've reviewed:
- Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
- Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
- Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
- Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
- Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
- KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
- Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
- Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
- Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
- Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
- Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
- Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
- Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- US Bank Business ($800) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
- Fifth Third Bank ($200) – This offer is limited to customers in the following states: Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account online but you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements. Read my guide on this bonus here.
- GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- 5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
- US Bank Business. US Bank is currently offering new business customers a $800 signup bonus after opening a new account and meeting certain requirements.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
- Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
Hey, have you thought about the interest we could earn if we kept the money in a savings account? By the way, just so you know, AT&T doesn’t charge interest on new mobile phones bought through monthly payment plans.
As for the car, it makes sense to pay yourself, along with laptops and other expensive items that will accrue interest. But I might be wrong about the mobile phone, what do you think?
We just bought a new vehicle. We were able to pay in cash because when we bought the car we are replacing 10 years ago, we started a sinking fund that we added to every month. We treated it like another bill. When our current vehicle broke down and was going to need several thousand dollars of work, we bought a new one. And we sold the beater for a few thousand—to put in the sinking fund dedicated to building a huge greenhouse.
Ally has “buckets” as the sub-accounts, but it seems that the main account is the only one that gets the interest each month. Does anyone know if Discover and the other companies listed with sub-accounts pay interest to the sub accounts and not only to the main account?
Ally lets you have multiple savings accounts so I see no reason to bother with their buckets. I currently have around 8-9 Ally savings accounts with one checking, all under one log in. I can give each savings acct a nickname and unlike the buckets, each savings acct is allowed 10 electronic withdrawals each month, not that I ever needed that many. I’d come close to reaching the limit if I had one savings acct with 10 buckets.
This is easy when it’s only 2 people to buy phones. It would get more complicated when you have a family of 4 or 5 lines to keep track of. It’s easier to just have a large emergency fund, though technically it’s not an emergency.