We pay a lot for our cellphone obsession. According to the market research company JD Power, the average American cellphone bill is $70 for a single user and $155 for a family. Most surveys, including one Nielsen released last month, conclude that about two-thirds of all Americans own smartphones.
But we can save money and still enjoy our technology. How would you like to cut that bill significantly — let’s say, by 50 percent — so you can use that cash elsewhere?
Here’s the step-by-step plan to hold the line on smartphone bills.
Step one: ditch the contract
The problem with cellphone contracts is that you are locked into a plan that forces you to make higher monthly payments for years. Skip the contract, and you can save hundreds. (See Cell Phones: Is a No-Contract Deal Cheaper?)
An article in Time (Why You Should Never Sign a Cell Phone Contract Again) compared four ways to get a premium phone, along with cell service: Payment plans, two-year contracts, pay-as-you-go plans and month-to-month plans. The cheapest? You guessed it — month to month.
In addition to cost, the problems with contracts include a lack of flexibility, potential termination fees and tons of fine print. Let’s face it: These things used to be the only game in town, but now they’re the worst game in town.
Step two: find the right plan
Out of that contract? Time to go shopping. But before you do that, do this: See how many calls you make, how many texts you typically send and how much data you typically use. The easiest way to do this is to pull out your bills for the last few months and review them.
There also are several online calculators that can help you assess your usage. One useful tool is on the website WhistleOut, which allows you to compare plans and phone prices. You enter the number of lines, type of phone, and how you expect to use each one. WhistleOut then connects you with plans to choose from.
There are pay-as-you-go plans that work for disciplined, data-driven, responsible and self-restrained individuals: You only pay for the exact amount of data, texts and minutes you use.
To take advantage of most of these plans, you have to buy a phone — no payment plan. In addition, pay-as-you-go plans add up quickly if you don’t monitor usage — or if you are not quite as self-disciplined as you think you are.
Then there are the month-to-month plans, most of which require you either to buy their phone or, if you already own a smartphone, to buy their SIM card.
Finally, before you sign up with any company, make sure they offer good coverage in your area by looking at a coverage map; and check reviews and complaints before you sign up.
Step three: buy a cheaper phone
Whether it’s the prestige, brand loyalty, or the need for the newest gadget, many people can’t wait to answer the call when Apple — or one of its few high-end foes — comes out with a new phone.
But think about it: The latest Apple smartphone could cost you up to $700. Even if you are addicted to Apple, do you really need the latest version?
You can drop an Apple or similar high-priced phone altogether. Consumers who stick to these brands get a lot of the extras you won’t find on cheaper phones. However, there are many manufacturers producing alternatives that cost a fraction of the price.
For example: Stacy carries a Windows phone, which can cost as little as $50, without a contract, depending on the carrier. It doesn’t have all the apps and gadgets that are available on a fully equipped, ultra-hip iPhone or noted facsimiles, but he figures it has 80 percent of them, at about 10 percent of the price.
Step four: limit your data usage
When you’re using your phone, use Wi-Fi to surf the Web whenever possible, rather than using cellular data, which is much more costly. (Use the settings on your phone to attach it to every Wi-Fi network you are familiar with.) Think of cellular data as a convenient backup when you are out of range of those networks.
Depending on your habits — and those of your teenagers — you may find you can save money by cutting back on some of the behaviors that gobble it up, according to Consumer Reports, for instance:
- Watching video streams: An HD-quality video stream can consume up to 5MB or 6MB per minute. Thus, one four-minute video a day from YouTube would use 700MB of data monthly.
- Making video calls: You can use as much as 3MB per minute.
- Streaming music: This can burn through 1MB a minute. You do the math!
- Uploading video: If you must do this on your phone, shoot for a lower resolution. Uploading a three-minute HD resolution video can use 300MB.
- Playing fast-action games: Playing these competitive games with your friends on your phone can cost you 1MB of data per minute.
Do you have ways of cutting your phone costs that we haven’t mentioned here? Share them in the comments below or on our Facebook page.