How to Save $1,800 a Year on Your Cell Phone Bill

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Remember when I thought I was big stuff because I saved $200 a year on my cell phone bill? Well, I recently found out that my friend Chris just put me to shame. He made a move that saves him $1,800 a year on his cell phone expenses. It’s pretty safe to say that I would have never thought of this, because it is pure genius!

So how in the heck could he possibly save $1,800 on cell phone service?! Well, between he and his wife, they were spending $150 a month on talk, text, and data (which is actually fairly cheap – I have heard of others spending over $200 for the same service), which equates to $1,800 a year.

At this point you are probably thinking that they saved all their money by just cancelling their cell phone service and going back to the old land-line phone. This is a bad assumption. My buddy still carries around his iPhone and makes phone calls, texts, and uses it to surf the web. So how is this possible? Let’s dig into the good stuff.

How to Save Money on Your Cell Phone Bill

My strategic plan to reduce my cell phone bill was to negotiate a savings with my service provider. It did work, but I wasn’t thinking big enough. Here is what my friend did to save thousands of dollars: he cancelled his service and uses the Talkatone app. This app allows him to make phone calls and send texts, and then he surfs the web via his phone just like he always did. Of course there is a catch though…you need to have WiFi.

Here are the points he sent to me as a summary of his experience:

  • Total cost is ZERO (other than having the smartphone to download the app on)
  • You can buy iPhone 4’s for $100 on Amazon right now
  • Phone doesn’t work unless you have WiFi
  • You can get WiFi everywhere- Home Depot, Meijer, McDonalds, Starbucks, Panera Bread, etc.
  • Call quality is pretty good
  • You can’t accept picture, video or group messages.  SMS only.  I typically just email from the phone if I need to send a picture or video.  Other services like whatsapp work for pics too.
  • Because of the contract that we were on with the two iPhones and data, etc, we are now saving about $1,800/year.
  • I, personally, have not missed having a phone at all.
  • For  longer conversations over the phone, I pay for a VOIP service called Magic Jack.  The cost is about $30/year, with a few fees to pay to get started.  The call quality with Magic Jack is great, and I have unlimited calls to the USA and Canada.  I can also bring my Magic Jack hardware with me wherever I go, plug it into an Ethernet connection, plug my phone into it, and make and receive calls just as though I was using it at home.

WiFi is the Key

So the key to this whole operation is the free WiFi that is springing up everywhere. In the next couple of years I suspect that nearly every store will have WiFi available, which will make this tactic even more viable! If this is true, then I will strongly be considering this method when my contract is up.

What about you? Would you ever cancel your cell phone service to save thousands of dollars a year?

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Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

6 Comments

  1. I saved hundreds per year on mine, but I wouldn’t drop it fully for just wifi coverage. The wifi in many places is spotty at best, so you are dependent on that. You can’t receive calls when you are driving because you won’t get the wifi coverage. This is why services like Republic Wireless are good. You get the wifi coverage and then pay very little for the opportunity for cell coverage.
    Grayson @ Debt Roundup recently posted..Reader Poll – How Do You Keep Your Information Safe?

    • It would definitely be tough, but with WiFi coverage spreading across the globe I could see this as a viable option in the next couple of years.

    • That would make this extremely difficult, but you could always subscribe to Magic Jack like my friend Chris did. It sounds like he can take that with him everywhere and it only costs him $30 per year!

    • I haven’t heard of that plan Chuck, but it sounds a lot like Virgin Mobile, only VM is cheaper – both for upfront costs and the monthly cost.


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