Day 5 – Save on your cell phone bill

Saving money on your cell phone bill is always an interesting topic because there are many ways in which you can do so. The problem is most people tend to get locked into 2 year contacts and it is hard to change once that happens without paying all types of fees. The good thing is this is a very easy way for you to save on your monthly bill which can add up to large yearly savings.

When it comes to choosing a cell phone plan, the choices just got a lot more interesting. In just the past year all four carriers have all revamped their plans with a focus on unlimited data. But just because unlimited is hot now doesn’t mean it’s right for you. Here’s how you can make the most of your cell phone plan.

1. Look at your current usage

First, figure out your usage. How many minutes and texts do you use every month? How much data do you use? This will help you compare apples to apples. Then, use a site like WhistleOutWirefly, or NerdWallet to compare your options.

Make sure you know your new plan’s details and you’re happy with the network and speeds, too. If you don’t use a lot of data and have a cheap, possibly now discontinued plan, then there is a good reason not to mess with a good thing. Unlimited data sounds great, but unless you’re using a lot of data every month one of the cheaper shared data plans would be better for you.

AT&T and Verizon both revamped their plans last year, removing overage charges on new plans. Instead of automatically charging you extra for more data (usually $10-$15 per extra gigabyte), they will drastically slow down your data until your billing month ends. But this is only on the newer shared data plans. If you are on an older plan,  you still may be charged if you go over your monthly limit.

2. Don’t be afraid to switch — or threaten to switch

So what if you are still stuck in a contract how can you save money? As with your local cable company, the threat of switching carries a lot of weight. In fact, it’s even truer with mobile carriers. With all four of the major providers building strong 4G LTE networks, it is easier than ever to switch carriers. They all even have enticing switcher offers, offering hundreds of dollars to move to them.

A simple call to the cancellation department to let them know you’re willing to go can go a long way in finding those “retention deals” that can save you money without changing your plan. The carriers have already done the hard work in building out the networks, it’s money left on the table if you’re not using it.

As with any interaction, remember to be respectful to the representative you’re dealing with. It’s not their fault the bill is the way it is, but being kind will give them a greater incentive to find you the best possible deal.

3. Taking your old phone to a discount carrier

If you’re able to unlock your current major-carrier phone and take it over for free to a discount carrier like T-mobile, Boost Mobile, Straight Talk, H2O Wireless or Ultra Mobile, you can save a substantial amount of money. Typically most Iphone models 5 and above come already unlocked. I still use my Iphone 6 from 4 years ago and don’t plan on upgrading the phone until it breaks or I lose it.

Personally what I use is Virgin Mobile as they offer a variety of plans for people on a budget, including a plan that has unlimited text and data with 300 minutes of talk for only $35 per month. None of the plans require a contract, they make it easy to keep your old number and will even ship you one of their low-cost phones for free. More good news: Phones compatible with the “Beyond Talk” program start in the $40 range.

You’re looking at $35 a month on Virgin versus $80 a month on Verizon (considering a similar prepaid plan). On a yearly basis, you’re looking at savings of at least $540. Over a span of 2 years (which is the length of the average phone contract), you’ll save $1,080 by choosing a discount carrier like Virgin Mobile. This is extra money that can go towards paying off some debt or putting towards investments.

Overall, it’s clear the longer you can hold out for that new phone, the better. Especially once you have a totally paid-off, unlocked phone in your hands, there is a huge range of carriers and plans that can save you big bucks over the long haul.

4. Take advantage of discounts

If you can’t switch plans because you are locked into a contract there are still ways to save on your current bill. State, federal, military, teacher, student and employee discounts are readily available across carriers and can drop the price of your plan by 15%-20% per month. Verizon, AT&T and Sprint all offer these discounts on your monthly bill, while T-Mobile has an “advantage” program that will currently get you $25 back for “every T-Mobile One line you activate and every time you upgrade a device.”

One thing to note: These discounts don’t always apply to the unlimited plans, including Verizon’s newest option.

5. Update your service address

The taxes and fees added to your bill each month are based on where you live. If you’ve moved to a new state, or someone on your family plan has, you could save big just by updating your service address. When you’re moving to a new state, the last thing on your mind may be getting a new cell phone plan. But no matter what plan you were on in your previous state, changing your billing address or opening a new cell phone plan could mean significant savings on wireless taxes and fees.

Lawmakers love to dip into the pockets of consumers via their cell phones — in some states much more than others. In nine states, wireless service taxes and fees are more than 20% of a consumer’s monthly bill, according to a 2015 report from the Tax Foundation, an independent tax-policy research organization. Washington state is tops in the nation, with federal, state and local taxes and fees making up 25.15% of the monthly bill.

A person who moves from Washington state to Oregon would save an average of $170 per year in wireless taxes and fees. Migrating from Illinois to Wisconsin? You’d pocket $103.72 in savings on average. Those figures are based on an individual cell phone bill; the savings would be greater on a family plan.

Updating your service address is easy. In most cases, you simply log in to your account and change it under your user profile, just as you would for your billing address.

6. Switching to Pre-Paid

These plans hit the sweet spot for most smartphone owners, who use an average of 2GB to 5GB of data each month. You will be able to bring across your old phone if it is unlocked.

  • Plan name: Cricket Wireless Basic
  • Price (monthly): $40; $35 with autopay discount
  • At a glance: Unlimited talk and text with 5GB of data
  • Why we like it: Hits the sweet spot on monthly data for most users
  • Plan name: MetroPCS 5GB plan
  • Price (monthly): $40
  • Plan at a glance: 5GB of data, plus unlimited minutes and text messages
  • Why we like it: At less than $10 per gigabyte, this is one of the best wireless deals available
  • Cricket: Cricket is owned by AT&T and uses AT&T’s network. New customers might pay a $25 in-store activation fee. Cricket allows customers to bring their own phone, if it’s compatible.
  • MetroPCS: The carrier is owned by T-Mobile and uses T-Mobile’s network. Its 5GB plan includes unlimited streaming from select apps, such as Pandora and iHeartRadio. You’ll pay retail price for a new phone, between $20 and $770.

Each of these options on its own can give you quick relief on your cell phone bill, and you can combine them for larger savings. Again this is all money the you are saving each money ads up on a yearly basis. This is your discretionary after taxed income that you will be saving which can be used towards paying off your debt or investing.

“Never spend your money before you have earned it.”
– Thomas Jefferson –

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