Big things usually cost big bucks.
Your car, for example, probably takes up a big piece of your financial pie as well as space in your driveway. Same goes for your house — it’s almost certainly the biggest thing you own (or rent), and the amount of money you spend on it matches its size and importance in your life.
But if you don’t take a minute to think small, you might overlook one of the biggest drains on the modern American household budget:
That little personal computer in your pocket probably cost you a whole lot more than you realize. I know mine did.
Itty-bitty Phone, Great Big Bill
When I bought my beloved iPhone 4S, I did it the way most non-rich people do: I took the phone for “free” in exchange for signing up for a two-year plan with Verizon. Ditto for my husband. The service was great, the phone was amazing, and I paid $175 every month for the privilege of asking Siri for iffy-at-best driving directions.
Along the way, one of our children transformed into a text-happy middle schooler, so we got her a cheap flip phone with a pay-as-you-go plan.
And boy, did she go! Her texting habit brought her bill up to about $55 each month.
As I looked for ways to get serious about saving money and keep a much more frugal budget, it was clear that our $230-per-month cellphone habit had to change.
Down the Cellphone Carrier Rabbit Hole
Allow me to preface this by saying that I did all this research so you don’t have to. It took hours of internet time, and it definitely made me want to throw my phone out the window more than once, but I got the goods.
You’re getting ripped off.
Seriously, if you’re still locked into a contract with one of the Big Four carriers, you might as well be lighting your money on fire every month — is there an app for that?
The big cell phone networks are the ones that you’ve heard of: Verizon, AT&T, Sprint and T-Mobile. These are known as Tier 1 carriers, and they own all the wires and infrastructure that runs the internet. If you still use them, you don’t need me to tell you how expensive that cellphone bill is every month.
Mine came out to $2,760 a year.
The Tier 2 carriers, on the other hand, are the little guys.
Some of them have names you might recognize, like Virgin Mobile or MetroPCS. These companies don’t own all the internet stuff — they just buy some extra bandwidth from the big guys and pass it on to you. Their costs are a lot lower because their overhead doesn’t include any responsibility for maintaining those networks or for paying ginormous executive salaries.
And that’s really all you need to know about that.
How Ditching My Cellphone Plan Paid off for Me
Armed with a basic, low-tech understanding that I was looking for a good Tier 2 carrier, I scoured the internet for them.
Turns out, there are a ton.
And I looked at them all to break down their pricing. It can get complicated pretty quickly– each plan has its own breakdown of what you’ll get for minutes, texts and data usage.
I wrote it all down and got out a calculator to figure out what would work best for my family of four.
I ended up choosing Ting, which has a unique pricing system that lumps everyone in your family together and only charges you for what you actually use. I ended up spending only about $50 per month — for all three of us.
That’s a savings of $180 per month, or $2,160 per year.
That’s real money, people.
Which Tier 2 Carrier Is Right for You?
That’s a little like asking about the meaning of life.
It all depends on where you’re coming from and where you hope to get to. Ting works really well for me, but you might discover that another little guy has better service in your neighborhood or a better deal for your lifestyle as a madcap Instagrammer or a talk-to-mom-every-day kinda gal.
To help you make the best choice for your wallet, here’s what you need to keep in mind as you do the research:
- Check a coverage map. Before you do anything else, look at a coverage map to see which of the Big Four cell carriers work in your area. Zoom in on the neighborhoods you go to most frequently and nix any choices with spotty coverage.
- Understand whose network your Tier 2 guy is using. As you read all about small carrier plans, be sure to understand which network you’d be getting. If you don’t have great AT&T service in your area, you have to axe all the Tier 2s who use AT&T’s bandwidth, too.
- Know your data needs. Check your most recent cell phone bill for your data usage, number of texts and minutes of voice used. This will be crucial info for comparing costs based on usage as you narrow your choices.
- Know your phone’s capabilities. Not all phones can be used on all networks, so check to see if a plan is BYOD (bring your own device) or if you need to buy a new phone. If you can BYOD, make sure your phone will work on their network.
With that information in mind, you’re ready to grab a calculator and crunch the numbers about what you’d spend for your typical usage. Find the best plan for your habits, and you can kiss your money pit of a cell phone bill goodbye.
It can literally save you thousands of dollars each year.
Which carrier has saved the most for you?