Saving Money on Your Cellphone Bill

Courtesy of Intel Free Press.

Let's face it - many of us no longer have a landline.  Over the years, our mobile phone has become our go-to device for telephony, messaging and mobile access to the internet.  I often joke that my iPhone is my "peripheral brain" - that statement has more truth than I care to admit.  Unfortunately, Americans also have the privilege of ridiculously high cellphone bills.  According to research firm Cowen and Company, the average bill for the Big Four American carriers (T-mobile, Sprint, AT&T and Verizon) ranged from $120-148 in the fourth quarter of 2013.  So let's talk about ways we can cut down on this expensive but necessary service.

1.  Check for employee/student discounts - Like I discussed in this previous post, your employer or school may have negotiated discounts with major cellular carriers and all you have to do is type your email into a webpage to check for eligibility.

2.  Leverage your family and friends - all of the major carriers offer family plan savings where your per-line cost decreases significantly the more number of lines you have.  I won't waste time by comparing each carrier's offerings as they tend to change rapidly.  But as an example, our T-mobile family plan of 7 smartphones and 1 iPad with unlimited voice, text, and 2.5GB of LTE data costs a total of $130/month+tax and fees.  

3.  Consider Prepaid/Smaller carriers - the majority of Americans have their cell phone service thru one of the Big Four carriers (AT&T, Verizon, Sprint and T-mobile), but there are plenty of smaller carriers out there vying for your dollars.  Many of these are Mobile Virtual Network Operators (MNVO) where they buy network services from one of the Big Four providers at wholesale prices and then resell that service to you.  Their offerings are often cheaper than the Big Four in order to draw in business.  Availability of these carriers may vary depending on where you live but some of the bigger names includes: MetroPCS, Boost Mobile, StraightTalk, Virgin Mobile, Cricket Wireless and Simple Mobile just to name a few.

4.  Where you live matters - In addition to the high prices we already pay for our cellphone services, Americans also pay an average of 17.05% in combined Federal/state/local taxes on those services!  The rate you pay can vary drastically depending on the state you live in, ranging from 7.59% in Oregon to 24.42% in Washington.  You can check to see where your state ranks here. While I am not advocating fraud, changing your billing address to one of the lower-tax states may save you hundreds of dollars a year.  For example, when we started our family plan, we went with my mother as the primary account holder because she is a Oregon resident.  

5.  Cut back - this is the easiest but often the last thought-off way to save.  Do you really need "Unlimited Data" for $100/month in today's WiFi-ubiquitous world?  Now I can't answer that question for everyone but I know people who consistently uses less than 2GB of data each month but insist on keeping their unlimited data plans.  To me, that makes no financial sense.

Are there any other ways you save money on your cellphone bill that I missed?  Let me know in the comments.


Future Proof, MD

Dr. Bo Liu is an aspiring radiologist-in-training and the founder and editor of the White Coat Money Blog.  He has an interest in interventional radiology and helping his medical colleagues get ahead in this mad world of medicine and money.  When he's not crushing the list at the PACS station or typing up your next favorite blog post, you can usually find him at the local badminton club, movie theater or the most recently opened restaurant.