How to Cut Your Cell Phone Bill in Half

This article is part of a short series tackling some of the major recurring expenses we each incur (internet, gas/electric, cell service, car/home insurance) and discussing how to dramatically reduce each of them.

In this post, I’ll discuss how to cut your cell phone bill to $25/month or below.  To get started, some preliminary facts:

1. Most cell phone plans include unlimited talk and text, and thank goodness!
2. International calling can usually be added on and removed at any time, so no need to pay for that benefit at all times
3. Older model phones continue to be manufactured “new” long after their initial release date
4. Using cellular data over a WiFi connection does not use cellular data allotted to your plan
5. Most phone providers have exceptional service in all but the most remote places in the US

First Step:  Assess Your Phone Needs & Buy Only What You Need

My mother (sorry if you’re reading this Mom😊) has a fairly new iPhone and a hearty data plan.  She uses her phone for talk, text, and the occasional picture only.  No e-mails, video streaming, social media, or Candy Crush.  She has the Batmobile of phones and data plans and yet only needs the metaphorical equivalent of a golf cart.

Don’t pay for more than you need is the point here.  You can check your data usage in the settings section of your phone.  If you only use 8 GB of mobile data a month, consider an 8 GB phone plan instead of doling out the cash for an unlimited plan.  Similarly, if you are not a professional photographer or hard-core gamer, you could save a significant amount of money purchasing a new phone from the previous model year versus the newest phone on the market.

Just to toss a data point out there, according to a report by BankMyCell.com, new phone models depreciate at rates frequently exceeding 50% in the first year.  In other words, if you purchased a $1000 phone and wanted to sell it a year later, you would be lucky if you could get $500 for that phone.  Spending lots of money on depreciating assets (like cars, phones, and clothing) makes you poor!

Therefore, unless your technology needs are significant, you will most likely be best served money-wise buying a new phone which is at least a year or two past its initial release.  Moreover, the difference in performance between a phone one model year newer is likely insignificant versus the last model year.  See below for a comparison provided by GSMArena.com of the Samsung Galaxy S20, S10, and S9 during the summer of 2020 with my annotations.  The aspects of each phone which are the same year-to-year are grayed out.

Please first note the price points for each phone at the time of writing:

• Samsung S20 (released in 2020):  $759.99
• Samsung S10 (released in 2019):  $404.99
• Samsung S9 (released in 2018):  $275.98

Second Step:  Don’t Buy Your Phone from a Service Provider

These days, to make us feel like we can afford more than we can, phone companies allow you to buy phones from them and pay with monthly installments.  For instance, let’s purchase a Samsung Galaxy S10+ from AT&T.  As of this writing, it costs $28.34/month for the next 30 months, or $850.20 if paid in full.  Conversely, I can buy it for $699 on Samsung.com or Amazon.com with no monthly payment plan.  Thus, I saved $151 by purchasing my phone through someone other than AT&T.  This is pretty universal – buying your phone from a carrier is usually significantly more expensive than buying it elsewhere.

For those who are okay buying a phone which is not brand new, purchasing a certified refurbished phone with a warranty can also provide significant cost savings.  As a self-admitted tech geek, I like purchasing refurbished phones.  If something will be wrong with it, it will show itself usually within the first few weeks during the warranty period.  Amazon is one vendor which has a good reputation for its refurbished devices.

Lastly, as far as compatibility is concerned, this is all you need to remember, “GSM unlocked phones” work on all major networks besides Verizon and Sprint.  If you want to buy a phone compatible with these phones, you will need one which is specifically designed for either of those networks (look for the abbreviation CDMA).  It should also indicate GSM vs. CDMA in the item description of the phone you are potentially purchasing.

Third Step:  Pick a Prepaid Plan

This is key, pick a prepaid plan and bring your own phone.  A post-paid phone plan (which is usually the default option when ask for a phone plan) with unlimited data on AT&T costs $65 for one line while a similar plan costs $70 on Verizon.  Conversely, a prepaid plan, which simply means you pay in advance of each month, with unlimited data costs $50 on AT&T.  Therefore, I am always in favor of asking your current cell service provider if you could save any money by switching to a prepaid plan.

If you opt for a prepaid plan with a carrier besides the big names like Verizon, Sprint, and T-Mobile you can save even more.  Of course, these options will most likely require you to switch phone providers.  Straight Talk, for instance, offers 25 GB of data for $45/month on a prepaid plan.  Consumer Cellular offers 10 GB of data for $40/month.  If you want to drive costs down even further, I’ve seen AT&T offers 8 GB of data per month for a rock bottom $25/month, but this special is often available online only.  Finally, Mint Mobile has been a recent newcomer with plans as low as $15/month, but their service is poor outside of most major cities.

Knock That Bill Down

Above I outlined how to slash the cost of your cellular service.  First, don’t buy the newest phone unless your technology needs require an extremely high-powered device.  Secondly, opt for purchasing your phone outright from a vendor other than a cell service carrier.  Amazon and eBay have not let me down in the past, but I only purchase phones with warranties.  You could also consider a refurbished phone with a warranty.  Lastly, always opt for prepaid plans with an appropriate amount of data.  Either call your current carrier and ask what it would take to switch to one of these plans or consider switching carriers.  In most cases, you can keep your current phone number.

Hopefully that helps you save a significant chunk of money each month.  I would love to hear peoples’ experiences with various carriers.  In my next article, we’ll talk about getting the best prices for internet and cable.