Do you love the convenience of a cell phone but hate the cell phone bill? What if I told you there was a way to have a good cell phone and service without the high monthly cost? Read on to find out.
I remember a time, long, long ago, when I was in High School in the early 1990’s when cell phones were relatively new and the only ones to have them were Doctors and high-earning business men, and of course drug dealers like in the movies.
They of course were not smartphones and probably had terrible service and they were large and bulky. But you had the convenience of a phone anytime you needed one.
Fast forward 20 or so years and now everybody has a smartphone, even little kids in elementary school. It seems these days people cannot live without their phone. And on top of that, everyone wants the newest and coolest phone when they come out. Standing in line for hours just to be the first one among their friends to have one. I’m sure you know what I am talking about.
This has never been me. I hate standing in line and even more so, why would I waste my time standing in line for something that I can get maybe a few days later for the same price but without wasting my time. Time is valuable, I don’t want to waste it.
So you get your new phone that probably now costs about $800-1000 which you will pay over the next two years along with a service plan with unlimited data and all that. Your new monthly cell phone bill, which is probably about what your old one was, comes to about $115/mo. What a bargain! NOT!
Cell phone service is a sham. It should not cost you the price of a used car to have one. Even more so, unless you are always traveling, you are probably most of the time in a place that has wifi service so you don’t really need an unlimited data plan. And I would say that MOST people that are working toward FI can agree that they do not live on their phone. Many young people spend their entire day glued to their phone.
For the last 8 or 9 years or so I have been using a cell phone service that is very affordable. You don’t get all the bells and whistles that you get when you pay a high cost but for me it is worth the tradeoff. Since that extra difference in the service can go toward investing. If you are paying $115/mo that sums to $1380/year. Over the span of just 5 years, that adds up to almost $7000. For some people I understand, it is necessary for your business. My wife is a Realtor and she has to have a full service phone for accessing lock boxes and meeting with clients at their home, etc.
I work from home. My home of course has wifi. When I go to Church, there is wifi. When I go to a hotel, there is wifi, although I usually don’t use it. In most places there is public wifi available. This is why some cell phone service providers rely on that fact to offer lower priced plans. You can get a plan for around $20/mo plus the cost of your phone, unless you bring one you already own, through Google FI (formerly called Project FI); https://fi.google.com You get unlimited calls and texts but are expected to use wifi whenever available. Then when you need to use data outside of wifi, you just pay for the data you use at $10/GB with a max of 6 GB you pay for, after which it is free. But by then you would have paid about a normal service plan ($60+20=$80). But you probably would not do that every month so you would still see a big savings there.
There are other similar plans out there through some other companies and some may be local to specific regions.
I however have been using one that is even less. And the phones are less as well. I use Tracfone. www.Tracfone.com Yes, it is a pre-paid service plan. If you are like me and don’t need to always be on your phone you can be just fine with this plan. I don’t use my phone that much. I don’t live on it. I do have my email attached to it for business and I do use texts mostly with tenants that I manage. But I don’t use it enough to justify paying $115/mo. My total bill is usually less than $100/year. Yes, that’s right, less than $100 per YEAR.
I replaced the actual phone last time in June 2017 only because that is when I bought my first rental property that I manage and needed a slightly better phone to use for pictures and texts. I bought it on eBay cheaper than buying it directly from Tracfone or a store. I think I paid about $120 for the phone and a 1 year service plan. Yes, you do have a limited amount of texts, calls, and data. I have never run out of data or calls. I sometimes need to add more texts before my service days run out but it is only $5 for 1000 texts which is a lot for me. Then each year I just buy another 1 year service plan, again usually through eBay where I can search for a cheaper cost and have been paying about $75 for that plan. The phone I last bought is a Samsung Galaxy Sky Pro. It is a very good phone and can do everything a more expensive phone can do.
I get high quality pictures, a large screen, I can use it for my Google email, etc. All the things that you would actually use a $1000 phone to do, this cheap phone can do as well. It worked so well for me that my three oldest children also only have a Tracfone. They use a difference phone than I do, but they are all on the same service plan. But with them I reload theirs every three months. That way they have to learn some self-control. If they burn through their texts, they won’t get more until the end of the three months. Same for their data. I like it a lot for that reason and of course because it is a much more affordable way for a family.
So, you decide. What is more important to you? Having a high-cost phone and plan just because everyone else does, or would you rather cut out a huge expense from your budget to free up that money to be used to help pay down debts, or to invest?
Please comment below if you use another low-cost service plan that you would recommend.