Savings Challenge, Week 9: Cutting cellphone costs

This week's topic in the Bankrate 52-Week Savings Challenge is saving on cellphone service. This is apparently a bigger item in most people's budgets than I realized; according to a financial firm cited in the article, "the nationwide average bill is $90 per phone." Another source puts the number even higher, saying the three biggest carriers all charge upwards of $140 a month. That's more than we pay for our home phone, Internet, and cable service combined.

The personal story linked to this challenge is a bit different from the others I've read so far. While most Bankrate reporters are only trying out a given challenge out for the sake of the article, reporter Barbara Whelehan  had a genuine need to trim her budget after a whopping 50 percent drop in household income, and she saw their equally whopping $160 monthly cellphone bill as a likely spot to cut. She'd already managed to negotiate her personal bill with T-Mobile down to $55 a month from $87, so she tried them again and took advantage of a special deal: "two lines with unlimited talk, text, and data for $100 a month." The process of switching was a hassle—not on T-Mobile's end, but getting her husband's former "Ma-Bell company" to unlock his phone—but it ended up cutting their bill by 60 percent.

According to the mobile editor at Bankrate, Mike Cetera, Whelehan is getting a "very nice deal" paying just $100 for two phones with unlimited talk, text, and data. However, he says they could have paid even less by going with a "discount carrier" such as Ting, which works on a "pay-what-you-use" basis. Given that Whelehan says she generally uses her phone "to call, text and occasionally scan the news if I'm stuck on the road," this would probably be a good deal for them, as they're currently paying for a lot more plan than they need (at least for her phone). With Ting, according to the carrier's website, an average 2-phone family pays just $42 per month. Republic Wireless, another discount carrier, offers plans with unlimited talk and text (plus data over wi-fi only) for as little as $10 a month.

If Whelehan and her husband were willing to accept some limits on talking and texting as well as data use, they could potentially lower their bill even more by switching to a prepaid plan. Their current carrier, T-Mobile, charges only $3 a month for a bare-bones pay-as-you-go plan that includes 30 minutes of talk or 30 text messages. Additional minutes or messages are billed at 10 cents apiece, and you can tack on a data pass when you need it for $5 per day or $10 per week. Admittedly, this isn't nearly enough phone time for most people, but for users like us, who truly do want a cell phone only for emergencies, it's plenty. We switched to this plan a few months ago, and we've never gone over the 30-minute limit. And since we have only one phone between the two of us, that means our phone bill comes to $3 per month total—not exactly an overpriced luxury that's ripe for budget cuts.

So I guess the moral of the story here may be that the best way of all to cut your cellphone bill is to use the phone less. Keep it down to half an hour, and you can get by with a $3 prepaid plan, whittling your bill to just one-thirtieth of the average. (If, on the other hand, you really need that unlimited talk and text because your cell phone is your primary phone, maybe you should just drop your landline instead.)