Cut Your Cell Phone Bill in Half (2013)


Update: This article was written in 2013; many of the major carriers’ plans have changed since then. The basic takeaway is still the same though – family plans are the way to go if you want to save big money (and you don’t necessarily have to be in the same family). – Brian

If you read the conventional advice on how to cut your cell phone bill, you’ll hear things like “cut extra services” or “switch to a plan with fewer minutes”. But these tactics are no longer effective as cell carriers increasingly offer “unlimited” everything with even their most basic plans, and no discounts. So how can we lower our cell phone bills now?

You could switch to a smaller phone company that doesn’t offer the top-of-the line Apple and Samsung phones, but who wants to do that?

I’m going to tell you how to make dramatic cuts to your phone bill, without sacrificing services or having to switch to a low-end phone.  Of course, you can save more money if you go with a low-end phone but you can still use these techniques in addition.  If you want, say, an iPhone, it means we’re limited to one of the big four: Verizon, AT&T, Sprint, or T-Mobile.

Note that Straight Talk from Walmart offers the iPhone 5 and Galaxy SIII (but not the S4) for $45 per month. But, they have some other caveats, like roaming charges and limited coverage area for Android phones. So, they are not exactly in the same class as the big four, but they offer dramatic savings (basically 50% off if you have your own phone), so they might be worth checking out.

Republic Wireless is another second-tier carrier that uses the Sprint network and offers only one Motorola phone choice but is an amazing $19 per month!!  If you don’t need the latest iPhone or Samsung Galaxy phone, it’s something to consider!

But in the analysis below, I’ll concentrate on the big four.

The Right Cell Phone Carrier

Let’s start comparing cell phone plans. I went through and compared prices from the “Big Four” cell carriers for a single-person plan.  Each plan was slightly different, but for the most part they offered unlimited everything (with some caveats).  Here are the monthly costs as of June 2013, not including taxes and fees:

Cell Phone Plans

You might be wondering why there are two columns for T-Mobile. Well, they just announced “contract-free” pricing, which means that after you pay off your phone, your monthly cell phone bill goes down.  Imagine that!  So, the first T-Mobile bar is the cost while you are paying off your phone.  The second bar is the cost after you pay it off.  (You can pay it off by paying $20/month for two years or all at once).

So, right off the bat, if you’re at Verizon, AT&T or Sprint, you can save at least $10/month by switching to T-Mobile.  Then, after your phone is paid off, you save much more ($20 to $40/month!)

Here are the caveats though. T-Mobile’s coverage is not as good as Verizon’s or AT&T’s. If you live in a big city, T-Mobile’s coverage should be OK. If you live in a questionable remote area, check with your friends about their coverage.  One mitigating factor: if you get a modern Android phone on T-Mobile, you might be able to use Wi-Fi to make and receive normal phone calls, so if you have a Wi-Fi network at home or at work, you don’t need to worry about coverage in those locations. Check your home Wi-Fi speed.  If your download and upload speeds are above 0.25MBPS with Max Pause less than 10ms and Quality of Service greater than 85%, you should be able to use Wi-Fi calling using your Wi-Fi.

Second, your current phone might not be compatible with T-Mobile’s network. If you wanted to get the plan pricing that doesn’t include the cost of a new phone, make sure your phone is compatible with their network first. For example, Verizon iPhones won’t work on T-Mobile.

But overall, I really like T-Mobile’s “no contract” idea. I don’t get a new phone every two years, so I will be able to reap the benefits.

If you do want to get a new phone though, T-Mobile will save you money there too.  At Verizon, you have to put down $200 for a 16GB iPhone 5. At T-Mobile, you put down $150. For 32GB, it’s $250 and $300 respectively. For a 16GB Samsung Galaxy S4, you have to put down $200 at Verizon and only $99 at T-Mobile!

Okay, that isn’t rocket science. “How can I get more savings”, you say??

The Real Secret to Low Prices

As I mentioned, the cell carriers have cut all kinds of discounts in favor of “unlimited” everything. But, there is one area that still offers massive discounts: family plans.

Now, if you are single, don’t dismiss this too soon.  You don’t actually need to be in the same family to use a family plan.  The main thing is that the bill goes to one address.  You each get separate phone numbers.  Perhaps you could go in with a trusted friend?  Or, how about your parents or grandparents?  Extended family?  Cousins, aunts, uncles?  Keep an open mind here, because the savings are dramatic.

Let’s look at the pricing including 2-person and 3-person family plans:

Cell Phone Family Plans

Look at the right side of the chart.  If you go with a family plan under T-Mobile with one other person, you’re each spending $40/month or half of any other one-person plan!  If you go in with two other people, you’re spending $30/month for your cell phone bill, saving $50/month or $600 per year over any single-person plan!!

What could you do with an extra $600 per year?  You can have up to five people in the T-Mobile family plan and the savings improve even more.

Now, these savings assume the cell phone is paid off, but there are still some good savings even after you add in the $20/month to pay off your phone.

Okay, there are some other caveats with the T-Mobile family plans though. First, all of the phone numbers have to be in the same area code and T-Mobile market. This might be problematic.

Second, as I’ve already mentioned, the bill goes to one address. But, since the plan offers unlimited everything (data is slowed after 500MB), there is no danger of overage charges. You can simply divide your monthly bill with your “family”.

So, think about these limitations and see if the family plan is workable for you. If so, you could save a bundle on your cell phone bill!

A Few More Costs to Think About

Whenever you switch carriers, there are going to be activation fees.  In my case, there was a “special” and it was only $10, but regularly this is $35.  In addition, if you get  a brand new phone, you might want to get insurance, which typically runs $12/month.  Remember to cancel this eventually, because the value of this insurance diminishes as your phone ages, and in the long term, insurance is a bad deal.  Also, taxes are around $10 a month.

But, it’s not all bad news. You have some leverage when you are shopping for a plan, with the salespeople eager to close the deal. Ask if you can get the activation fee waived, for example.  It can’t hurt! In my case, the phone I wanted was out of stock, but instead of going to a different store, I told my salesperson that I’d wait and return to get it from him.  He was grateful and gave me a free case ($30 value).  Hey, I know it’s not much but it’s something!

Let me know about your experiences with T-Mobile and any other tips you’ve found to save money on your cell phone bill! – Brian (Note, I have NOT been compensated by T-Mobile or any other company to write this article. If some other carrier comes out with lower pricing, I’ll change my recommendation!)

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  • Brian Shim

    I took my parents to the Sprint store to get iPhone 6’s for Christmas. The salesperson threw in a tablet with data for “free”. On their next bill, my parents get charged for the tablet and data plan. When they tried to return it, Sprint said it’s past the 14-day return period, so sorry.

    My recommendation is to avoid Sprint like the plague. They flat out lied about the tablet and lied about the fees. I’ve had Verizon before and T-Mobile now. They have given me good service and never flat out lied.


  • Occam

    Love your site, but we are NOT all breeders or parts of families. Some are always-single and childfree. This could still be useful, except to those who are low income, asy part time minimum wage.

    There are *fairly* low noncontract, prepaid plans. I’m being vague because I haven’t gotten specifics lately, as in, no need to until I can more easily afford them. They would be a useful addition to the public-assistance phone services which can suck sewer gas. (i.e., they’re awful.) How awful, you say?

    Assurance Wireless phones had a headset jack, but Safelink phones do not have even a jack for a headset. Considering national safetly problems with driving while talking on a phone – which sometimes is necessary when one is lost – it should be illegal to sell phones that can not be used with a headset. Furthering this danger is unethical.

    • Brian Shim

      Hi Occam,

      Yes, totally, agree. I am single with no kids myself. But, I almost got in a family plan with my retired parents. Plus, you don’t necessarily have to be in the same family (but that can complicate things)..

      Thanks for the head’s up about those phone plans. Yes, no headset jack should be illegal!


  • marywh

    Brian! Thank you for your useful information! I just want to share what I’ve found (if you allow :)). I found Lycamobile rates to be very competitive. You get free calls+50mb of data for $16/month. More details in this post
    Thank you!