How I cut cellphone costs in half
By Allie Johnson
June 18, 2014
For a long time, I felt I was paying too much for cellphone service. I was right: Last year, I switched to a pay-for-what-you-use service and cut my bill in half.
When we switched cellphone providers, my husband and I were in the midst of paying off a massive student loan debt and some credit cards, and we were trying to cut costs wherever we could. So, it hurt to fork over $135 a month to T-Mobile for moderate cellphone use. Neither of us watches movies on the phone or texts constantly.
One trick I learned while trying to save was to look at yearly expenses to get a better idea of the real cost. As the personal finance blog Get Rich Slowly points out, recurring monthly expenses are “potential money sinks.” And looking only at the per-month cost can make the amount you pay seem like less of a budget buster.
So, I did the math and found we were paying $1,620 a year for cellphone service. I asked T-Mobile if they could give me a better deal. I explained my situation and told them I thought I was paying far too much and was considering breaking my contract. They told me I was stuck: They couldn’t do any better. Using a tip I’d found online, I asked to speak to their “customer retention” specialist, who I had heard had extra power to negotiate. No luck.
So, I researched and came across a company called Ting that doesn’t use contracts and calculates your bill each month based on the amount of talk time, texts and data you use. Ting has categories from extra small (no usage) to extra large, and you pay based on which one you fall into. So, if you use 1,000 minutes of voice time but don’t send any texts, you’d pay $18 for the time you talked and nothing for texts. If you suddenly took up texting and sent 500 the following month, you’d pay $5 for texts that month.
Joe and I were hesitant to switch, partly because we had to buy our own phones with Ting. Choosing from a variety of price points, we picked decent Samsung smart phones for about $250 each. We also worried the service would be bad, even though Ting uses Sprint’s network.
But it’s been over a year, and our service is as good as it was with T-Mobile. Our bills fall between $60 and $75 a month, saving us over $800 a year (minus the cost of the phones, which we plan to keep for several years.)
If we had broken our T-Mobile contract early, we would have had to pay an early termination fee of $50 to $200, depending on how much time we had left. We waited to avoid the fee, though Ting offers a credit of 25 percent of your early termination fee with another carrier.
But if you’re a moderate cellphone user, you might be able to save quite a bit by exploring non-traditional options. Other bloggers, including J.D. Pohlman at Pohlman’s Personal Finance blog, have also been happy with Ting.
Or, GoBankingRates.com offers three alternative cellphone companies that could help you save. For example, Republic Wireless offers unlimited calls, texts and data for $19 a month. The company is able to offer low rates because your phone will switch to Wi-Fi whenever that’s available.
That could cause some hassles, though. According to CNET.com, Republic offers a lot of bang for your buck. But, switching between available wireless and cellular might cause service quality issues , according to Xaprb.com. Also, having to enter passwords to connect to password-protected Wi-Fi could be annoying. And, you might need to look into downloading privacy apps if you’re worried about security or privacy issues with public Wi-Fi.
In any case, I think it’s a good sign that there are many more cellphone plan choices than there were just a few years ago. If you think you’re paying too much for cell service, you probably are — like I was — and looking into alternatives can help you save big.