How to save money on mobile phone service

Services are expensive! Any kind of recurring service may seem small but add up over time and make them a large purchase. Don't be lulled into thinking that a monthly service fee isn't a big deal, because it is.

Today we are looking at mobile or cell phone service. Nearly everyone wants to have the latest fancy phone and data everywhere they go. There are lots of opportunities to get phones with lots of different service providers and most cost only a little up front, but end up costing you a lot in the long run. I plan to take a look at these in this article and show you how this costs you a lot of dough and I will show you the way that I save on mobile phone service. It may not work for everyone, but I've been doing it for many years and its great for me and my family!

Typical Mobile Phone Plan

In a typical phone plan today, I don't see the "get a free phone with a service contract" advertising much anymore. What I do see is that the cost of the phone is split up into monthly payments for you if you qualify (have good enough credit). Then the monthly phone service fee is added to that.

A little bit of history... phones used to be offered for "free" with a service contract. But service contracts lasted usually 2 years and really you paid for the phone with the high service fees you were paying anyway. If you terminated early you had to pay a termination fee that basically paid for the phone. So, nothing is really "free". Looking at things today, it really hasn't changed. The new marketing scheme is to say that there are no contracts. However, you'll have to pay for the phone if you stop using their service... I don't see how's that different? I'm sure there are differences but in the end, your going to pay for the phone. Usually, what I see, is that the cost of the phone is broken down into monthly payments over 2 years.

So, what this means for this article is that I don't have to factor in the price of the phone (device) in my analysis, since I can see clearly that we have to pay for the phone anyway. I will talk about the differences between a carriers locked phone and an unlocked phone later since there is big difference between those things.

Cost of Service

The cost of service varies a lot, I've seen plans from major carriers that are $50 & $60/month and that gets you unlimited talk, text and a limit of high speed data. In some cases if you exceed your allotted data you will incur additional charges. Watch out for this and stay away from it. It's really easy to exceed your limit. Some carriers let you exceed but when you reach your limit your data speed is decreased. This is better than incurring huge fees for additional megabytes of data. 

Lets just go with the lower one and compare the price of typical service for 2 years using one that's the lower price, $50/month. So, some quick math shows that you will pay $1200 for that service plan over 2 years, not including taxes and other fees. 

I am not the type that spends a lot of time talking or texting on my mobile phone. However, if your mobile phone is your only phone then perhaps you don't have a choice. I have a home phone and use that whenever talking to family or friends for long periods of time. BTW, that home phone costs me less than $4 a month for unlimited local and long distance but that's a different story.

A high monthly service cost was not appealing to me. So, I did some shopping and looking. I decided that I did want a smart phone, for all the cool things it could do, but I was not going to pay for data. Instead I use a pay as you go (or pre-paid) plan from T-Mobile. I can buy 1000 minutes for $100. Those minutes won't expire for a year. I found that those 1000 minutes lasted me about 6 months and in some cases up to 10 months. So, if you haven't already done the math that's about $16.67 per month for my mobile phone use.

I know, many of you are going to say, "But what about data?" I still used data, but since there was WiFi available both at home and work I really didn't need data on the go much. I did want to use my GPS though. But that was easily solved since you can search for your destination while on WiFi and then get in your car and go to that destination with all the directions you would expect. The data needed to get you to your destination is downloaded to the phone and works without further need for data. The next question would be, "Well, what if I'm out and about, not at home or work, then what?" My solution to that was that there are lots of businesses, especially coffee shops and fast food chains, that offer free WiFi. I would just find one, get the data I needed, and be on my way.

I was much happier spending less than $200 a year for phone service than $600. It's one third of the cost!

That worked great for several years. However, recently I started working at a place that did not offer free WiFi service and there was nothing convenient nearby. So, that made me look around for a way to get data while I was at work. Phone deals were still $1200 or more for 2 years and I knew already that I wasn't willing to do that.

I settled on a wireless hot spot that offered FREE data for a popular music services. I get unlimited data, and 1 gigabyte at high speed for $20 a month, again this is from T-Mobile. After I use up my 1 gigabyte I will go slower but still have data. And I get unlimited music using popular things like Pandora and many others.

So, now I have to add in the mobile hot spot that costs $480 for 2 years. The total for 2 years in service fees is now up to $580 but now also includes data. Still a good deal at half the price of regular plans!

Yes, its a little inconvenient to have to lug around an additional device, but it also adds some versatility. I have a hot spot that I can easily use with anything and it has much better battery life than my phone at nearly double the capacity. Also, with my wife and kids in the car on a long trip I can have up to 10 devices connected to it at a time and since they are on similar plans to me, it works out really well.

Locked vs. Unlocked Phones

Its also worth mentioning locked and unlocked phones. Unlocked phones really don't have downsides unless you count that you need to make sure that your phone will work with the carrier you plan to go with. However, you should know that locked phones are, to many people, horrible! They are the ones that are carrier marked. Usually on the outside you can see a carrier logo. But its not the logo on the outside that's the problem, it's what's on the inside.

First, these carriers load up a bunch of crummy software or apps that you can't easily uninstall (aka. crapware). Getting those things off takes some software hacking in most all cases, which is not something I'm willing to do for fear of bricking my expensive phone. The applications are often pretty big too, taking up precious space on your phone that you may want to use for something else.

On top of this they are often locked down so that you can't use another carrier. They are locked in a way that will only allow the phone to work on their network. So you are stuck getting a plan from them with no opportunity to shop around.

If you're paying for the phone, make sure that it's unlocked and does not have a bunch of crummy software pre-installed!

I welcome your feedback and ideas. If you have ways to save on mobile phone service or have other money saving ideas please share it with the rest of us!

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