Is switching worth it? Work it out before you spend three hours on it
Not every switch is. The number that decides it appears on no comparison site: what you are paying yourself per hour to do it.
by The editors · Published · 4 min read
Comparison sites show you a saving. What they do not show you is how long it takes to collect. A switch that saves $12 a year and costs two hours of your evening is a six-dollar hourly wage, and at that rate the better advice is to go and do almost anything else.
Three numbers that belong apart
- The ongoing saving. The difference between the two prices, every month, for as long as you stay. This is the only one of the three that repeats.
- The one-time bonus. Real money, and it lands once. Counting it as though it recurs is the single most common way a switch gets talked up.
- Your own time. Reading the terms, cancelling the old contract, sitting through the retention call, checking the first bill. This is a cost, and it is the one nobody writes down.
In the worked example above - $95 a month down to $69, a $50 sign-up bonus, 45 minutes of your time - that comes to $362 in the first year and $312 in every year after it. Both numbers are worth having. They are not the same number, and a comparison site that quotes you the first one every year is quoting you a bonus you will collect once.
Your numbers
Worth doing. $483 per hour for 45 minutes of work.
| Currently per year | $1,140 |
| New per year | $828 |
| Saving per year | $312 |
| Switching bonus, one-off | $50 |
| Switching cost, one-off | $0 |
| In the first year | $362 |
| Your hourly rate for this | $483 |
Assumptions behind this calculation
- Above this hourly rate we call a switch worthwhile. That is our judgement, not a measurement.: $50
- A switching bonus counts in the first year only. Folding it into the annual saving promises it every year.
Where the fifty-dollar threshold comes from
We call a switch worth doing when it returns at least $50 for each hour of your effort. That is our judgement, not a measurement, and it is stated under every result so you can put your own number in its place. If your evening is worth more than that to you, raise it. The point of naming a threshold at all is that without one, every switch looks worth doing, because the saving is printed in large type and the hour is not printed anywhere.
What you can do about it
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Estimate the effort honestly, not optimistically
Whatever you think it will take, the retention call alone is rarely the ten minutes you have in mind. Write down the number before you start, and check it afterwards once. After two or three switches you will know your own rate, and the estimate stops being a guess.
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Start with the largest line, not the easiest one
The effort of switching is roughly the same whether the bill is $20 or $200 a month, which means the return per hour is set almost entirely by the size of the bill. Sort your recurring charges by amount and start at the top; the small ones may never clear your threshold at all, and that is a finding, not a failure.
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If it is not worth it, leave it and write down why
A switch you decided against is a decision, and it is worth as much as one you carried out - provided you can find it again. Note the date, the two prices and the reason. Next year the prices will have moved and the answer may have changed, and you will not have to work out the whole thing from scratch.
Frequently asked
Why do you judge it on the first year rather than on the ongoing saving?
Because the first year is when the effort is spent, and the effort is the thing the decision turns on. Both numbers are shown. If you plan to stay for years, the ongoing figure is the one that matters to your budget; if you are deciding whether to spend an evening on it at all, the first year is the honest comparison, because that is the year the evening belongs to.
Should I count the time on the phone if I would have been watching television anyway?
That is a fair question and the answer is yours, not ours. The calculator asks for minutes because the alternative is pretending the minutes are free, which is how a twelve-dollar saving turns into a good idea. If your honest answer is that the hour costs you nothing, put in a small number and see what happens to the result.
The Five-Dollar Slap
Once a week: one money trap, one way out. No waffle, no sharing your address.
Double opt-in, your address is never shared, one click to unsubscribe – and that deletes your address rather than just switching it off.
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