How much are you paying for your Cell phone?

"Smart" Phone = Expensive Phone

I like to help our readers understand what they need, not what advertisers or society tell them they want.  Normally, I would advocate identifying how much you need and lowering your plan to meet that with a little room for error.  However, with the multimedia capabilities of cell phones, a new opportunity is on the horizon.

I’m talking about using your cell phone as your gateway to the internet.  Now, if you’ve read all the articles on this site, you’ve probably realized that I’ve told you to get rid of your cable, your home phone, and now your home internet.  Wait a minute though, I said “opportunity on the horizon” for a good reason.  The primary killer of this idea is the cost to use your phone as a mobile hotspot.  There are many other downsides, such as latency for gamers, the relatively high cost of unlimited internet cell phone plans, cell phone coverage, signal strength, etc.  As wireless providers compete and continue to invest in infrastructure(likely the reason for the high costs of today’s plans — That and CEO salaries)  the price of features like these should decrease, as should the negatives.

Ask yourself these questions before shopping for a new cell phone plan:

  1. Do I need access to the internet on my phone?  Pay attention to the word “need”, because almost everyone “wants” internet on their phone.  I imagine that most people have access to the internet at work and at home, where they spend 90% of their day.  I would venture to guess that most people spend less than a tenth of their day somewhere that they do not have access to the internet.  This question really becomes “Do I need access to the internet while I am a passenger in a car(please say you’re not the driver) or while I am on vacation?”.  Sure that would be nice to have, but worth a couple hundred dollars a year, probably not.
  2. How many minutes do I need?  Unlimited plans(better termed “unlikely to reach the limit plans”) are getting cheaper, but if you can save even $5 a month by choosing a plan with defined limit, the decision should be easy.  I’ll help you make the decision with this calculation:  $5/month * 12 months/year * 40 years(until retirement) = $2400.  $2400 that you could have put towards your retirement, invested, spent on gifts to family and friends, or even just earned interest on for 40 years.  Sorry for the tangent, take a look at past phone bills and decide what the worst case would be for the number of minutes you would use.  As texting and the internet are becoming more popular, our family voice minutes have been decreasing.
  3. Family Plans?  Great idea to save money, check out more here.
  4. Do I need texting?  I like the convenience of texting for a quick question, but I hate that you are charged  for texts that you receive.  Imagine what would happen if the post office started charging you to receive letters?  Ridiculous. . . anyways, given that texts are notoriously overpriced, if you have a teen in your house, talk to them about this.  If you use less than around 100 texts per month, you are probably better off paying for them as you go.  Otherwise consider an unlimited plan.  Its quite easy to find out how many texts you would need to justify a texting plan.  For example, if you can get 250 texts for $5/month and texts without a plan cost $0.25.  $5(for the plan)/$0.25(the cost of a text without the plan) = 25 texts/month(the number of texts you could make per month for less than the cost of a texting plan).  Simply stated, if you use less than 25 texts per month, you would be throwing away money by purchasing the $5/month plan.

Some other ways to save:

  • I know of several couples that don’t have home internet because they can access their email, etc, from their cell phone OR better yet, their work cell phone.  When they need to print something or they need a full powered computer, they go to a public computer system or a friends house.  That fly’s in the face of our “need it now” mentality, but with ever increasing prices and stagnated wages, its a great way to save.
  • Have a cell phone where you pay for data(internet) as you go?  Use your home WiFi and your business WiFi connections if allowed.  Chances are the speed will be better and you won’t be charged for using your data
  • Ask your carrier about data blocks.  These can be very specific from blocking data for the internet and multimedia text messages or blocking all data.  This way you can’t accidentally run up a bill.
  • Avoid media intensive sites like those that stream video(or audio if you have a pay as you go plan).  Video and audio can eat lots of bandwidth which means lots of $$$.
  • Check out the cheaper carriers, but ask around if their service is good.  Many times the cheaper carriers use the same towers(and have the same coverage) as the big wireless carriers.  You can find out by looking at the coverage maps.  They look surprisingly similar . . .

Have any other ideas?

Photo used under Creative Commons from William_Hook

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