---
title: "The True Cost of a Phone"
description: "Phone deals can cover service alone or include a handset. Some handset deals use a loan. Compare each payment once over the same period, including price changes and extras, and check the exit terms."
canonical: https://lightmysky.com/learn/life-skills/the-true-cost-of-a-phone-mt_L_o7NzVuh5
source: https://lightmysky.com/learn/life-skills/the-true-cost-of-a-phone-mt_L_o7NzVuh5.md
retrieved: 2026-09-12
---

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# The True Cost of a Phone

Phone deals can cover service alone or include a handset. Some handset deals use a loan. Compare each payment once over the same period, including price changes and extras, and check the exit terms.

Subject: Life Skills · Area: Money & Finance · Ages 12 to 13
Page: https://lightmysky.com/learn/life-skills/the-true-cost-of-a-phone-mt_L_o7NzVuh5

## Ready when they can

- Multiply a monthly cost by the contract length and compare it with buying outright plus a cheap plan
- Explain what a contract locks you into and what an early exit costs
- Name two extras that are easy to miss, such as insurance or data overage

## Lesson: What a phone really costs you

Some deals include a handset; SIM-only plans do not. Borrowing to buy a handset means repaying a loan. Count each payment once: upfront charges, monthly bills and extras not included. Never add a handset price already included in the bills. At a fixed $18 monthly, 12 payments total $216. Separate insurance at a fixed $6 monthly for 12 months adds $72.

**Example.** With the same phone and service for 12 months, fixed prices and no extra fees, compare totals. At $34 monthly: 34 x 12 = $408. A $190 handset plus $11 monthly: $190 + (11 x 12) = $322. The difference is $86.

Check the term, price changes and exit rules. Early exit fees may apply; check the deal and local rights. For a fee per month left, multiply by the months left. Some plans charge for data over your allowance. Past bills help estimate data needs; allow for changes. Compare prices for service meeting those needs.

**Tip.** Budget for extras: insurance or repairs.

**Recap.** Count all payments once, including price changes and extras. Compare costs over the same period for service that meets your needs.

## Practice

13 questions on this page, each with its working shown.

## Needs first

- [Borrowing & Debt](https://lightmysky.com/learn/life-skills/borrowing-and-debt-mt_bAy4dmP1-A)
- [Saving for Something Months Away](https://lightmysky.com/learn/life-skills/saving-for-something-months-away-mt_NFZG8bDa5o)
- [Budgeting Pocket Money](https://lightmysky.com/learn/life-skills/budgeting-pocket-money-mt_Qzbh-_v0Gq)

## Opens up

- [Spending Inside Games and Apps](https://lightmysky.com/learn/life-skills/spending-inside-games-and-apps-mt_DCmLETXmjd)