Rather than giving you tips on little ways to save money on your cell phone bill, I am going to talk about my personal experience (read this as a conscious sacrifice) that saves me nearly $600 each year. If you have a smartphone and/or iPhone, the savings are even higher provided you are willing sacrifice.
I have had a cell phone service with yearly contracts for about 8 years since 2001, 4 years with Sprint PCS and 4 years with T-Mobile. These yearly service contracts are typically thrown-in with a new cell phone, free nights and weekend minutes, and a fixed amount of anytime minutes. If you have a smartphone, then, in addition, you may also likely have a data plan costing additional dollars with fixed GB bandwidth limit. For me personally, I am not a big fan of contractual agreements. These contracts not just lock you into a service but also make switching harder once you are a customer. AND, monthly charges are not cheap. If you like frugal living and don't mind some sacrifices, continue reading.
When I had a T-Mobile service, I was paying $70 per month for two phone lines giving us 700 anytime minutes and free nights and weekend. It also used to cost me separately for any Text usage. I also remember going over my 700 anytime minutes on 3 occasions and costing us $0.40 per minute for each additional minute. All in all, our yearly cost for cell phone service was about $840 (not counting any overages).
Then, in 2009, I was tired of the overages and decided to look into alternatives. After a lot of research, I concluded that Tracfone was a fierce alternative to an expensive recurring service from T-Mobile. At that time, I decided to purchase two Tracfones, costing $15 each. Next, I researched about the best value Tracfone pre-paid cards. My criteria for pre-paid card was simple, get the maximum amount of minute card with a maximum time validity. The card that suited this criteria was their $100 card that gives you about 1000 minutes and is valid for 1 year. If you do not use all 1000 minutes, then the remaining minutes are automatically rolled over into the next year if you purchase another pre-paid card of the same validity any time before the current one expires. I purchased two cards one for me and my wife. If you are with me until now, my total cost for Tracfone service was $230 ($200 for minutes + $30 for phones).
Another change we made at that time was to get a MagicJack. MagicJack costed us $40 for the device and one year of service. After one year of the service, we have signed up for 5 year service costing us a total of $70 for 5 years ($14/year).
We use MagicJack when we are at home and 90% of communication happens over MagicJack. We use Tracfones when we are outside and are on the go. We also use cell phones as an emergency backup for 'just-in-case' situations if our Internet connection fails during bad weather or some outage from the ISP.
Between Tracfone and MagicJack, our first year total cost was $270. This saved us $570 for our first year (the difference of $840 and $270). From the second year onward, we are saving $625 each year. Our total savings since 2009 are $1820 and counting up for additional years. We have used some of these savings on items we believe we enjoy. We recently bought a HP TouchPad (at a firesale price of $150) to give us the same mobility and apps provided by a smartphone. On a recent trip to India, we took the TouchPad with us so our 18 months old daughter could watch her nursery rhymes. This is just one example.
For us, the switch from the traditional yearly service plan to a combination of pre-paid plan and MagicJack was easier because we we were motivated to get out of the contract. Those who are addicted to constant internet connection on their smartphone may find this switch difficult. I can certainly understand the sentiment. I don't have any solution for you...but you may want to read a blog post by Tom Critchlow titled The Art of Being Switched On, Life is rich and colorful, please don’t spend it on your phone. May be you will be motivated to start living a frugal and simple life as Tom Critchlow.
I hope you found this post useful.
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