How I saved $380 on a cellphone plan

I read earlier this year how some families are spending more than $1,000 a month on cellular phone bills. To me, it’s absolutely ridiculous to pay more than some people pay for their mortgage for communication. When I was growing up, a second phone line ($25 or so per month) was a luxury most families didn’t indulge in.

To me, the cel is primarily for emergencies. I have a pretty liberal definition of emergency–if I’m on my way home from work and my wife wants me to stop at the grocery store to pick up a couple of things, I think that’s reasonable. What I don’t think is reasonable is the expectation that I’ll spend all the time I spend in my car yakking on the phone. If it’s going to take more than a couple of minutes, we’ll talk on my landline when I get home.

Here’s how to have a phone for emergencies for less than $9 per month.The first thing is to get your hands on a phone. You may very well be able to avoid buying one in the store or signing a contract you don’t want to sign in order to get a free one. My mother in law gave us her old phone after she upgraded to a newer, snazzier one. That saved us around $20.

Chances are you may have to buy a prepaid phone outright. Some of them cost as little as $30, which isn’t bad, considering you could easily spend $30 trying to hunt down a new battery and charger for a used phone.

And I just let the cat out of the bag. The key is to buy a prepaid plan, rather than getting on the monthly contract treadmill.

If you buy a prepaid phone, all you have to do is activate it. If you get a secondhand phone, you need a new SIM card. In our case, they charged $10 for the new card. This is why I’m not too keen on spending money on a used phone because by the time you buy a SIM card, a new battery, and a charger you can easily spend more getting a used phone going than you’d spend on a new one. If you luck into a good, working phone for free like we did, great. If not, spend the 30 bucks.

The salesperson will undoubtedly try to upsell you to a monthly plan. In our case, she didn’t even try to upsell us to the cheapest monthly plan–she tried to sell us the $40/month plan, not the $30/month plan. Don’t let the salesperson get very far into the pitch. I told her we expected to use the phone once or twice a week and not for much more than 15 minutes a day.

It’s hard to upsell you to a 500-minute plan when you say something like that.

And this is the key to saving money on all purchases. Do your homework, and go in knowing what it is you want from the start. The salesperson’s job is to get you to buy a phone that does more things than most people do with their computers. Since most of us carry a phone so we can either be reached in an emergency or reach someone else in an emergency, we don’t need a computer. Keep the goal in mind and refuse to pay extra for functionality you aren’t going to use.

After she swapped the card in the phone, we just had to buy minutes. We buy minutes in $25 increments, and we get 90 days to use them. In our case, it costs a dollar a day to use the phone (you’re only charged on the days you use it), and 10 cents per minute. The other plan charges a flat 25 cents a minute. Depending on how we end up using the phone, the 25-cent plan might be better. We’ll find out. The nice thing is that since we have no monthly contract, we can walk away just as soon as we’ve used up the minutes and switch to something else.

And after the first day of use, I can say it’s not bad. At the end of every call, I get a text message telling me how much is left on my balance. That makes budgeting the minutes very easy. I’ve never seen a monthly plan do that.

I think we can get what we need with the prepaid plan. We have a land line, which we use for normal, everyday calls. That costs $24 a month if you eliminate all of the extras. You don’t need call waiting if you have a cellular phone–people can call you on that and leave a message if your line is busy. You don’t need call notes if you have an answering machine. Those cost $10 and you only have to pay for them once. Call forwarding is useless. Caller ID is useful for screening your calls, but you can screen your calls with your answering machine too, and that doesn’t cost anything.

If you’re subscribing to those things on your land line, I suggest you take a long, hard look at those features and see if you’re getting any real benefit from them.

Some people suggest getting rid of the landline altogether, but I’m not so keen on that. For $24 a month, I can make all the local calls I want for free, with no restrictions on use. And people can call me all they want for free. Plus, having the phone line lets me get DSL for $20 a month. The long distance stinks, but we don’t make a lot of long-distance calls.

I’m almost certain I would quickly end up spending more than $24 per month to make up for not having the landline.

I’ll have a better idea in 90 days if this is going to work, but for now it looks like I’ll be able to meet my cellular needs for a Scrooge-like $8.34 a month.

If you found this post informative or helpful, please share it!

6 thoughts on “How I saved $380 on a cellphone plan

  • July 9, 2007 at 7:37 pm
    Permalink

    I was going to suggest that you check out VOIP like Vonage or Sunrocket, until I read that you’re getting broadband from the phone company. Even at Sunrocket’s $200/year (with free long distance and all the bells and whistles), it’s hard to justify dropping phone plus DSL in favor of cable plus VOIP.

    • July 10, 2007 at 10:57 am
      Permalink

      Anything involving cable is pretty much a non-starter for me. Their prices have never been competitive with any of the alternatives available locally. And maybe things have improved, but when I did have cable, it went out constantly.

      Everyone’s phone usage is different, so what worked for us may not work for everyone else, but if you evaluate how you’re using your various phones, it’s likely that you can save a lot of money, especially since everyone pushes one-size-fits-all plans that tend to maximize profit rather than usefulness.

  • July 10, 2007 at 2:22 pm
    Permalink

    My philosophy too. I have a mobile (cell) phone as a convenience for ME – not the great General Public. I turn it on when I want to make a call – otherwise not. I’ll check occasionally whether anyone has left a message for me. Prepaid is fine by me, but if I was a tradesman or in some other types of businesses where connectivity and quick response meant money it would be different.

    Dave, on another subject altogether, have you and your wife read this book? It’s interesting reading, free and thought-provoking. Not for everyone, but still thought-provoking.
    http://www.soilandhealth.org/03sov/0302hsted/030206possum/030206toc.html

    • July 10, 2007 at 5:16 pm
      Permalink

      Thanks for that link, Don. Not for everyone is right! But I’ll give it a long look, certainly.

    • July 12, 2007 at 9:34 pm
      Permalink

      Don, you’re a prince! Thank you!

      Oh, the gems in there <g>: Long pig: For emergency purposes only

      • July 14, 2007 at 1:23 pm
        Permalink

        Yes, well for a barbecue and smoker fan such as yourself…

Comments are closed.