Living well on less-saving money on your cell phone-why a pre-paid plan works for us

Remember last month, when I introduced my new series called Live Well on Less? This new series doesn't come without homework. Last month I challenged you to start keeping track of every penny coming in and going out. If you haven't started keeping track of your finances I would suggest using a free service called Mint or paying for the Quicken program like we use. At the beginning of the month, I shared my first post in this series, which was how to live well on less-saving money on cable, internet, and phone.
During that post, I didn't even touch on cell phones, but I promised that I would!   Times, they are a-changin' and it's rare for people to not have a cell phone these days. I got my first cell phone in 2000.  We had a small child, and I was commuting for school in a not so reliable car.  My in-laws paid for a year contract on the phone because it made them feel better that I had a cell phone that they could reach me at {or vice versa} since my son was in their care a few hours a week while I attended classes. We continued to pay for another year of service but realized that we just weren't using our cell phones very often.  I rarely turned mine on and after thinking about ways to save on our household expenses, I made an impulse decision to cancel our cell phone service.  This was around the same time we cut cable...quite a year!
We didn't miss having cell phones at all.
I feel like the popularity of cell phones were just starting to really take off right as we canceled our plan, and I was happy to be able to focus my time and attention while I was away from home on my growing family. When my kids were little, we had lots of play dates and trips to the parks and museums.  I wanted to make sure that during that time my kids had my full attention and that they weren't sharing it with someone on the other end of my phone. We carried on without cell phones for around 7 years, but as the kids grew and their activities started taking us in several different directions, we were finally feeling the need to be able to communicate to one another. I remember driving home from the Seattle Science Museum with the kids and being stuck in rush hour traffic.  I was dying to have a phone so that I could call my husband so that he could start dinner so we could feed our family before having to head out to baseball practice
I tried to telepathically send the message, but unfortunately, that didn't work, and my frustration got the best of me when I got home.  Sometimes wouldn't it be nice if your spouse could read your mind?! In 2009 we decided that we needed to jump back into cell phone ownership. My husband spent hours researching the best plan and realized that having a pre-paid plan through T-Mobile would probably be the best plan for our family. We found that we weren't big cell phone users during that two year period that we had cell phones, so we didn't think we would be talking excessively on our phones.  We didn't need a lot of minutes because we weren't using a lot of minutes.  Having no contract was another big advantage to having a pre-paid phone.  We weren't locked in to any plan and could change how we used our service at any time. There was more initial expense for having a pre-paid plan. We had to add $100 to each phone through T-Mobile. Those minutes don't expire and any unused minutes roll over at the end of the year. It costs around 10 cents a minute to use the pre-paid phone. We had this phone plan for 3 years, and would still have it, if we didn't have a 14 year old who got his first cell phone and needed a phone that could text (ours could...just not well).  I actually wrote about how I didn't text (until this August...yep, welcome to the new millinium Rachel!) here. We have a new pre-paid plan that I will talk about in a minute. One of the requirements of the T-mobile pre-paid plan is that we had to add to it each year.  After the initial $100, we didn't have a specific amount we had to add each year, we just had to add something. Most years, that addition was around $15 since like I said, the minutes rolled over. In our three years of owning the phones (we had 2), our TOTAL for both phones over the life of the phone was $300. That comes to around $8 per month for 2 phones, and I know you are smart people, so it's a no brainer that each of our phones cost around $4 a month or $48 for the year. If you don't use your cell phone as your main phone line, and don't use an excessive amount of minutes, then a pre-paid program might be worth looking into. T-Mobile has been rated one of the best pre-paid plans out there. Which is why when we bought my son a new phone for his birthday, we decided to stick with the pre-paid route and got new phones that could text. Texting seems to be how kids these days are communicating, and we didn't want to hinder our son's ability to communicate with his friends. He does have a cell phone contract that you can read about here.

When we were revisiting the idea of new phones, I did want to look into getting an iphone. I have an ipod touch and use it quite often and find it quite helpful. I could imagine that an iphone would be a good combination of all of the things that I could use (google maps, e-mail whenever I needed, texting, coupons!, information at my fingertips). However, the price tag for a smart phone was WAY more than we could justify. Even on the cheapest plan for just one iphone, we were looking at at least $80 per month. Not to mention the cost of the actual phone (which I hear is important), which could set me back several HUNDRED dollars!
Once I spent some time looking into it, having a smart phone was a want, not a need. In fact, really, having a cell phone at all sometimes seems like a want not a need. I could live my life without a cell phone, but remember, this series is not about living a depressing life, it's about living well on less. If you are tracking your finances as I mentioned in the introduction post of this series,  then you will know how much you are spending per month on your cell phone. In my experience, having a smart phone with a data plan is the most expensive type of cell phone plan you can be on. If you currently have a smart phone and are trying to save money, reevaluating your plan with less minutes, or less features is worth taking a look at. From my research, there are 3 carriers you can choose from with an iphone (I keep going back to this particular phone because it is the most popular smart phone and the one most people have), all three have very similarly priced plans. There doesn't seem to be a way to save too much money outside of going from the most expensive plan and downgrading to a lower level smart phone plan, however, like I mentioned, for one phone you are still looking at around $80 a month.

We "upgraded" our phones in August to the T-Mobile Sparq phone. Cost out of pocket was around $50 for each phone. We bought three of the same phone for a total of $150 (cheaper than an iphone). We stayed with a pre-paid phone plan but started with unlimited texting for $15 a month for my son. We quickly learned that if our son was texting, we would be texting, so we upgraded all three phones to the same unlimited texting plan.
We pay around $45 a month (total) for three phones (we use minimal talking minutes now, but do still have them paid for in the plan).  We have 10 cents a minute calling and unlimited texting.  Of course, no data plan. Pre-paid phones work for our family. They may not work for yours, but for us, it's been a way to have a cell phone and save money. I don't know of too many contract plans, even with the simpilist of phones that still costs as little as we pay. Remember this blog series comes with homework.
This week your homework is to: *look at what you pay for your current cell phone plan *how many minutes do you use? *are you paying for more minutes than you use or are you being charged for going over each month? *if there are several of people sharing a plan, could you save money by joining a family plan *spend time on your providers website to see if they have any specials or discounts you could take advantage of that you aren't already *are you paying for extras? *if you have been in a contract for some time, can you renegotiate to get a better deal? Do your homework and let me know what you find. Could you be saving money?