Saving Hundreds of Dollars on Cell Phones by Switching to Pre-Paid.

by jolyn on August 8, 2010

in bills,Indulgences,On Budgeting,On Cell Phones

I recently exchanged emails with Mary Hunt. Eeeek! Yes, The Mary Hunt!

She had posed a question on her Debt-Proof Living facebook page:

“Have you gone extreme to cut the cost of 1) Cell phone 2) Cable TV 3) Internet service and 4) Landline phone? Care to share? If so, all the details, please!”

I hastily typed my two-bits in the comments:

“We canceled our cell plan months ago and went to pre-paid tracfones. Never looked back! We’ve saved hundreds of dollars!”

Then she emailed me!

“Hi Jolyn … I would love to quote you in my Woman’s Day column (Nov issue) re: going with prepaid Tracphone. That’s GREAT. Could you email me, mary@debtproofliving.com so we can do this via email?”

Then I proceeded to reply to her email on facebook instead of using the address she gave me, and I just now realized that. But she forgave me (or likely just rolled her eyes) and kept up the dialogue via facebook email instead of chastising me for my oversight/rudeness.

I have no idea if I will be quoted or not. Wouldn’t it be grand if they mentioned this website? *sigh* I wish I were better at this self-marketing… thing.

Anyhoo. I got to thinking that I had never blogged about our cell phone switch from a contract plan to pre-paid. And I had never even crunched the numbers we’d saved until the email exchange with Mary. (Hi, Mary! Can I call you Mary?)

Switching to pre-paid was a no-brainer for me and my husband.

I took a look at the number of minutes we were using each month, and it was nowhere close to the number we were allotted — and we were on the cheapest plan. We’d used pre-paid phones when we lived in Italy (pre-paid is the norm over there) so we thought, why don’t we do that here?

I google-researched and came up with TracFone. I found a package deal that included two phones with double minutes; I opted to add bulk minutes that keep the phone active for 365 days (the normal time with fewer minutes is 90 days) which cost us more up-front but saved us money in the long-run.

We are not huge cell phone chatters. Or texters –though that is my husband’s medium of choice. We mainly use our cell phones for information exchange; as a means to communicate when we travel; and for the children’s schools, etc., to reach me when I’m not at home. In the last few months, my cell phone has been indispensable as a back-up to our land-line for the realty company to reach us to schedule a showing.

That being said, we’re still using the original 1000 minutes that we loaded onto each of our phones ten months ago. John’s are going much stronger than mine! His phone went largely unused the entire time (four months) that he was deployed.

The Bottom Line:

  • We paid $278.28 online for two TracFones with 1000 minutes each and had them shipped to our house.
  • In the ten months since, we have saved about $67 a month over what we paid for our cell phone plan.
  • This is a savings of $670 so far since we switched.
  • We will have saved about $862 for the entire year if we do not add any more minutes in the next two months. I will probably not make this, but I’m going to push it hard.

The Teenager Issue

Full disclosure: our 14yo son did not endorse the switch.

Our previous cell phone package was a family plan with three phones. Our son never used his phone… Until about a month before our cell contract expired and we made the switch. Then all of a sudden Conner discovered texting.

Our cell phone bill went up about $30 that month.

We told him The Plan. He didn’t like it.

When we informed him that we were switching to pre-paid we offered to buy him his own phone, but explained that he would be responsible for adding the minutes from his own money. I even offered to help him get a head start on the minutes by matching his initial start-up amount. But he was grumpy.

“Why do we have to switch? It only costs $5 a month for unlimited texting!” He’d heard that from his friends. Yes, $5 a month, but that’s in addition to the cell phone plan, which costs at least $30 a month for one phone. Is that what you want to pay for yourself?

Of course not. And he refused to listen to the reasoning behind our decision. What he really wanted was an iPhone. All of his friends had one. (Not true.) Apparently, he’d been preparing to hit us up for an upgrade… And now it was like we were telling him that not only was he not getting a Maserati, but we were taking away the Pick-up he’d been driving and giving him a Bicycle instead. He was not happy.

Fast Forward Several Months

I am not exaggerating when I tell you that this “discussion” with our teenager went on for months. I was ready to pull my hair out. Ultimately, he refused to put any minutes on at all. “There’s no point if there’s not unlimited texting.” Oh, the joys of raising a teenager in a middle America suburb. Sometimes I see the appeal of a military boarding school. I shrugged my shoulders and said it was his choice.

For the record? He claims not to remember any of this — the part where we offered to help him put on minutes. He talks like we just took away his phone without giving him any other options at all.

BUT, he has matured beyond talking like cell phones are an entitlement instead of the luxury that they are. Over the past year he has commented on some of the things his classmates have: the latest phone; a huge allowance “for doing nothing”; computers and Tv’s in their own rooms… And he’s not endorsing any of it, though he may have a touch of envy that’s only natural. Some of this is maturity, yes. But I don’t think it’s an accident that his mindset evolved about the same time his dad and I were actively eradicating our consumer debt and talking more and more between us (and out loud for the kids to hear) about the budget and what we really needed to spend money on now and what could wait.

Will We Always Use Pre-Paid?

I don’t think so. I’m actually looking forward to one day owning an iPhone — or the equivalent of what’s out there once we’re ready. I definitely see the appeal, and the practicality, of having a portable way to communicate and share photos and use the internet. Especially with our lifestyle of moving and traveling and having a teenager who will soon be ready to drive *gasp* and generally be out more on his own.

I’ve even told Conner of our intentions. Yikes! He jumped on it. “When? Can we get it now?” And he proceeded to regale me with the latest options of iPhone paraphernalia. I won’t have far to go when it’s time to research.

But no, no time soon, I assured my disappointed sonĀ  — at least not until after we move to California. And for sure not while this house is on the market. I-Phones and cell phone plans in general are certainly not a budget priority with these huge financial elephants in the room. The point is to realize your choices, after all: not just to pinch pennies and hoard them with no goals in mind. But once those goals are met? I see no problem with treating yourself to a modern convenience, within reason. There’s no doubt in my mind that making the choice to go to pre-paid in the first place helped us pay down our debt. Now that we’ve paid off that initial goal…

Could You Ever Give Up Your Cell Phone?

How much do you pay for your cell phone? Is it worth it? If you have a plan, do you use all your minutes every month? Is your cell phone purely a modern luxury of convenience, or do you consider it a necessity? Would you ever consider giving it up?

It’s amazing how we didn’t used to have things like cell phones, and now they seem indispensable. I know that I would no longer feel comfortable running errands while my kids are in school, for instance, if I didn’t have my phone on me. But does that justify a cell phone plan? Not in my mind… But I’m not a huge phone talker anyway. Pre-paid minutes are perfectly adequate for emergencies and the occasional urgent call, in my opinion. If we get i-phones and go back to a plan, it will be a pure luxury.

What say you?

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100 Lessons You Should Learn from Frugal People
August 18, 2010 at 11:28 pm

{ 16 comments… read them below or add one }

Tonya August 12, 2010 at 12:05 am

Congratulations on your new connection! I hope she quotes you AND links back to your blog. I enjoy seeing what wisdom you have to share.

As for the cell phones, my husband and I have iPhones and they are absolutely wonderful. I can’t forsee myself giving that up. I’ll cut back to the bare bones in other areas. Sad to say, but at least I’m honest! LOL

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ErinV August 11, 2010 at 1:13 pm

Hey, I use a Tracfone, can I meet Mary too? ;-)
Good going for sticking with your resolution when faced with a teenager’s displeasure. I know what that feels like… I am also a very light user and found the Tracfones to be the best way to save. Those bulk minute plans with double minutes are exceptionally good deals. My monthly cost is less than $20 with plenty minutes. It also helps that Tracfone has such good network coverage of course.

@BudgetingInTheFunStuff, there is the Straight Talk prepaid plans I’ve heard a lot about. Like I said I’m a light user and don’t need more, but they offer a plan which gives you 1000 minutes, 1000 texts and some mobile data for $30. That might be your best bet.

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Budgeting in the Fun Stuff August 10, 2010 at 3:14 pm

We had our cell phones and a landline until we bought our house. Due to our limbo location, a new landline would have been $40 a month. We gave it up and kept our cells.

Now we pay $78 a month after taxes for 2 phones, 700 anytime minutes, 300 text messages per line, free Sprint PCS to PCS calls, and free night and weekends (nights start at 7pm). We “only” usually use about 400-500 anytime minutes and 75 texts total, but we do use about 1000 anytime minutes every month. I haven’t been able to find a prepaid phone that can beat $78 for two lines and at least 1250 minutes a month and at least 100 texts total. I’ll keep an eye out though.

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jolyn Reply:

No, I don’t know of one, either. The whole reason we switched is b/c we weren’t using the minutes, it was an obvious waste of money. I’m already thinking of not getting a landline after we move and just using cell phones, which may involve a plan again, we’ll see.

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Budgeting in the Fun Stuff Reply:

Oh, I understand. You made an awesome decision for your family! Mr. BFS and I are talkers and have a ton of friends and family that also are talkers. Put that with the no land line thing, and those minutes just disappear. :-)

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AbbyJ August 10, 2010 at 2:40 pm

We got rid of our cell phone plans a few years ago and it’s working great! My husband has a work cell phone that I can reach him on if I really need to and I have a prepaid phone through AT&T. By getting rid of our two cell phone plans, we were able to save about $70 a month. Sometimes I miss a phone with bells and whistles, or just a camera, but we do just fine with less. :)

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Cheryl B. August 10, 2010 at 8:51 am

I finally got a cell phone a couple of years ago when my entire family tried to get a hold of me and couldn’t. All 3 daughters and my husband were freaking out. I was at the dog park with Landon letting him have play time with other dogs (yes one of those weird people). DH uses his all the time due to our business, so his business pays for most of the bill, I pay $30.00 for my part. It is worth the $30.00 for my grown daughters and DH to get in touch when they need to, especially with my SIL going overseas soon, if he cannot contact my daughter, he calls one of us. However, I am thinking of going with Vonage for my regular phone. My sister has had it for over a year and it works great.

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LaurelK August 9, 2010 at 1:41 pm

when we moved last fall, we tried to go without landline and just have our cell phones, we added the current existing number (we’ve had for 18+ years) to a cell and thought we where set. Then after being in the house a couple of weeks, and going crazy doing the can you hear me know thing or having to walk outside and try to find coverage we got a landline again. So we increased our phone usage! Ugh. Going to a prepaid plan, not sure I could, ok thats not true, if I had to sure. I text frequently with family across the US. Facebook on the go to keep up with the fam overseas or email lots. Okay its still in the category of luxury, could we do it, probably, will we, not currently. Still comfortable with the cost in the budget, so it stays the same.

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jolyn Reply:

The point is that you’re making the conscious choice and you’re benefiting from it. I definitely see the day we do the same as well.

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Adam August 9, 2010 at 11:18 am

I thought I had an amazing idea the other month. I wanted to get rid of our house phone (with unlimited calling) and switch our cellphones to Sprint who had an unlimited plan. I figured it would save us about $50 a month so we went forward and got the plan at Sprint. When I called to cancel the plan at Comcast, I found out that I signed up for a 36 MONTH CONTRACT! What?!?! I would never do that. When I signed up for the plan, I knew there was a contract but I remember him saying 1 year. Well, 1 year has passed and now it’s 3 years. There isn’t really anything I can do because they have my “electronic signature”.

All I know is, we are going to be paying for this mistake for the next two years. Ho hum.

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jolyn Reply:

I’m so sorry, but I’m laughing over here. At your expense, I know. It’s not nice.

But if it’s any consolation, we thought about canceling our cell plan after one year, only our contract was for two. My husband was all, “Wha…?” I can’t fault him, though: he signed us up while we were still overseas and he was trying to make sure we were ready to house hunt, buy a car, etcetc, the minute we hit the ground. We had just a few things going on all at the same time.

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Carolyn August 9, 2010 at 10:24 am

I barely use my cell phone. I have a $25/month plan with Verizon for 100 minutes, and the only time I used even close to that was when my mother passed. I’ve toyed with getting rid of it, but I don’t have long distance on the home phone and use the cell for that. We also travel a lot, so I like it for the safety issue, and I like being able to be in contact with the kids if I’m out running errands and they’re home.

I have 15-year-old twins who have been after me for 4 years for their own cell phones, and for 4 years, I’ve told them that when they drive, I might, MIGHT, get them a phone to share and only to use when they are out, to let me know where they are, etc. (It was 4-1/2 years ago that school was let out early for snow, and their homeroom teacher confirmed that, yes, my twins were the only ones in the class that had to use the room phone to call a parent; every other child whipped out a cell phone to call home.) Now that they have their temps, my daughter actually said she thought a pre-paid basic phone would be just perfect , as long as she can text, which is a switch from the text/MP3/camera phone she wanted just a few weeks before. (Mind you, my phone is 5 years old and isn’t a camera phone!) So I’m thinking eventually we’ll be doing prepaid with me putting on 30 minutes a month, and if they want/need more, they’ll be responsible for adding them. But I’m in no hurry for them to get either cell phones or their permanent licenses!

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jolyn Reply:

Oh, I hear you there. And how much will car insurance go up? I don’t even want to think about it.

I have totally lived vicariously through my son’s friends’ cell phones: theirs are what I call when I’m tracking him down. I’m shameless, I know.

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KLZ August 9, 2010 at 9:48 am

My company pays for my cell phone. But, should I ever leave, I’ve always said I’d go prepaid.I just don’t use it enough to justify an added $100 to the monthly budget. But I will really miss being able to check my email from anywhere.

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Nicole August 9, 2010 at 9:36 am

In order to keep connected with distant family, I have ‘upgraded’ to unlimited texting and added voicemail to my phone. I have never used up my alloted minutes, and I have the lowest minutes available on a plan. I still don’t have caller ID, much to many peoples shock! If I miss a call, they better leave a message or try again. Either way, I don’t mind. A cell phone is certainly something I could live without, I’ve only had mine for a year this month. I wish I could pay for minutes used, and a flat fee for unlimited texting – I never use other features anyway. Interesting about Tracfone and the possibilities, I’ll have to look into them. Thanks

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leslie August 9, 2010 at 9:14 am

If I trusted my sense of direction better, I would be fine without my iPhone…

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Kristin @ Peace, Love and Muesli August 9, 2010 at 7:14 am

I behaved a bit like Conner about the iPhone. I’m not proud to say. I barely use the phone but I love, love, love my email and Twitter on the go. It is an expense that I COULD survive without. I think our landline is where we need to cut back to save.
The past few weeks I’ve set my cap to a new laptop. With my husband’s encouragement I’ve decided to wait until I’ve the cash in hand and can research the best choice and price. I feel very grown up.

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sharon August 9, 2010 at 6:01 am

prepay is so commen here in the UK and has been for years, we call it Pay as you go, the difference here is you buy the phone and it is live/active even if you dont top up, you can still receive calls texts just cannot make them, I switched a few years back, and my eldest has one too, it saves a lot of money

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jolyn Reply:

We really loved the pre-pay when we were in Italy. I wish we had the feature here that you don’t pay for incoming calls and texts! At least, I seem to remember it included calls, too…

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Rose August 9, 2010 at 5:33 am

Hi Jolyn….I must admire the way you handled your son as too many of us cave in under pressure! Tell Connor that Tracfone are still the answer…they have a SMART-PHONE with a large touch screen and high-speed EVDO connectitity as well as bluetooth, camcorder and all the bells and whistles one could ever desire AND when you buy airtime you get double the minutes you paid for!! There is no charge for incoming texts and coverage is national with no roaming fees!

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jolyn Reply:

I will have to check that out!

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Kandi August 8, 2010 at 11:28 pm

Thank you for posting this! I *shock, gasp, oh the horror* don’t have a cell phone AT ALL! Oh, I did, then we moved. We had terrible reception and when our plan expired we didn’t replace them with anything. I will admit to having a Tracfone that I keep in my van with no minutes on it. Why do I keep it then? Well, 9-1-1 is free and one never knows when you may need that.

Now, to be completely honest, I don’t miss having a cell. I like being able to go somewhere and NOT be bothered. I love that when I take my kids to the park, I can focus my attention on having fun with them. Not who just sent me a text or is calling. It really, truly is nice to be so “free”, or should I say, retro..haha.

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jolyn Reply:

Kandi- hold out as long as you can. When my kids are in school I can no longer imagine not having a cell phone. But everyone should listen about the part leaving your phone behind so you can be in the moment with your kids! That is great advice for anyone, regarding so many things in life besides just our kids. Cell phones scatter people’s attention too much and too often, I think. It’s changing how we relate to each other, and I’m not sure it’s all a good thing.

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Red August 8, 2010 at 11:09 pm

First, I think you are the epitome of what parents SHOULD BE to their children. I recently read some reviews of “The Ultimate Cheapskate’s Road Map to True Riches,” and a reader said the book was unrealistic because teenagers would go nuts without cell phones. So let them go nuts! It’s not like kids NEED texting to survive or like it’s a parent’s job to be their kid’s buddy. Obviously, you offered your son an alternative, but it’s great that you didn’t let his lack of support derail your plans.

I’ve been toying with the idea of going prepaid. I’m afraid to switch cell companies though – Verizon has such good reception in our area. Plus, I do talk to Verizon users every once in a while, and those minutes would add up if they weren’t free. It’d still be cheaper to go prepaid through Verizon than to stay on this plan. I pay $54 a month for unlimited texting and 450 minutes. Last month, I used 30 minutes of my plan! I wish they offered a plan will less minutes.

I admire your move. It’s good to know that people make pre-paid work! And, yeah, cell phones are total luxuries, especially if you have a land line! :)

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jolyn Reply:

I think some kids go nuts with cell phones. I also know of kids whose parents (moms) are constantly in touch with them via texting and such, where the kids are checking their phones in their lockers in between classes (where they’re not allowed) (at least they weren’t in my son’s school); that’s a whole new level of the helicopter parent.

And you have no idea how frustrating that “conversation” was with my teenager. No idea. ;)

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