Americans spend an average screen time of 5.4 hours on their mobile phones daily and roughly 86% go online daily. For myself, this isn’t hard to believe as I use my phone regularly for work and has almost become an essential tool to communicate with others. Without my phone, I can’t imagine the anxiety of not knowing if I missed an email or simply not having my boarding pass readily available. However, for many people the benefits of having a phone far outweighs the cost even though cell phone bills can have a material impact on an individual’s budget. According to a study by J.D. Power, the average monthly cell phone bill in the U.S. was $127.37 in 2020, roughly $1,528.44 per year. Given almost every American household owns a cell phone, completely eliminating your cell phone bill can be difficult, but reducing your monthly spend may be more practical. If your cell phone bill seems to high, try these 5 effective ways to lower your monthly spend.
1. Switch to Prepaid
Prepaid mobile phone plans are paid upfront and are recharged in-store or online compared to postpaid mobile phone plans that are billed monthly. Prepaid mobile plans are paid in advanced before usage which means there are no surprises and allow an individual to be proactively pay for service. Prepaid mobile plans are generally cheaper than postpaid mobile plans because you are able to buy exactly what you need. For Example, T-Mobile has a Pre-Paid Mobile plan for $15 per month that provides unlimited talk and text with 2.5GB of Data Roaming. In Contrast, for a single line, T-Mobile offers unlimited talk and text with unlimited Data Roaming for $85. For someone that uses Wifi frequently and uses their phone to call or text others, a Pre-Paid Mobile plan can save an individual $60 per month or $720 per year just by switching from T-Mobile’s postpaid to prepaid plan.
Assuming an individual wanted an unlimited data plan, there are several prepaid plans that are also cost effective. For Example, Mint Mobile offers a pre-paid 6 Month plan with unlimited talk and text with unlimited Data Roaming for $90 which is roughly $15 per month. After the 6 Months, you can purchase an additional 6 Months for $210 bringing your annual bill to $300 or $25 per month. Both options significantly lower than T-Mobile’s $85 unlimited Data plan. Data usage can help determine what works best for you, but whether you need unlimited or no data roaming, there are cost effective data plans that can in some cases cut your phone bill in half.
2. Remove Protection Plan
Roughly 25% of all mobile owners are covered by a mobile phone insurance plan. Phone insurance plans can range between $5 to $20 per month. Mobile Insurance plans differ in coverage but usually cover unexpected cell phone repairs or replacements. However, most insurance plans have a deductible that may be equal to the amount you paid for your phone. For Example, T-Mobile’s Protection <360> plan costs roughly $7-$25 per month, but has a deductible up to $249 meaning if you lost your new phone, you can potentially still have to pay $249 even though you enrolled in insurance.
Assuming you still wanted to buy insurance for your phone, you can opt out of the insurance plan provided by your carrier and buy a third-party insurance plan that can both have a lower monthly and a lower deductible. For Example, Progressive has basic coverage plans for as little as $8 to $10 per month with a $75 deductible. If you are not notorious for breaking or losing your phone, removing your protection plan or opting for a third-party insurance plan can help cut your monthly phone bill.
3. Skip the Phone Upgrade
Mobile carriers advocate consumers to upgrade their smartphone every two years after which they would offer free or low-cost phone upgrades to continuously keep individuals in two year contracts. For example, if you trade in an eligible smartphone, T-Mobile will give you a “free” iPhone 13 model tied to an eligible plan on up to $800 off in trade-in value every two or more years. Though the offer is very enticing, phones on contract are not really free given that the cost of the phone is built in your higher monthly fee. In addition, when you decide you’d like to purchase a new phone, you still have to pay the difference between the new phone and the trade in value of your existing phone which varies, but can very well still be hundreds of dollars.
Depending on who you ask will determine the answer to how long your phone lasts. Smartphone manufacturers would say 2 to 3 years, but we all know someone that has had their phone for well over 5 years especially in third-world countries where not everyone has the luxury to replace their phone every 2 years. Simply buying a phone case, screen protector, or opting to replace your phone battery can help you hold onto your phone much longer than the advertised 2-3 years. Doing so can ultimately save you a couple of hundreds of dollars.
4. Family Plans
Mobile carriers most often offer cost effective multi-line plans that are cheaper per person than it is to purchase an individual plan. Though adding a line to save seems counterintuitive, the per person cost is usually cheaper than if you were to buy an individual line. For Example, a single line under T-Mobile’s Essentials plan that provides unlimited talk and text with 50Gb of data is $30 per month. The same coverage but with 3 lines is $30 per line with the 3rd line free meaning a $60 monthly bill split among 3 people is $20 per month which effectively saves you $10 per month if you were to opt for an individual plan. Family plans most importantly are not exclusive to families meaning that you can get your closest friends together to contribute to a single plan that will effectively save everyone in the group a noticeable amount of change every month.
No one wants to pay for a cell phone service, but with almost every American household with a cell phone, it’s almost a necessity to have a phone and a carrier plan. With that said, Americans can unknowingly be paying too much for their phone plans compared to what they really need or can get the same type of coverage for a lower cost. Whether its switching to prepaid, removing your protection plan, skipping the phone upgrade or opting for a family plan, you have several effective options to lower your monthly cell phone bill.
