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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