How I'm Saving $1,828 Per Year on My Cellphone Bill | YNAB

How I'm Saving $1,828 Per Year on My Cellphone Bill

I gave up everything, and lost nothing.

Step One: Admit That You Were Just as Happy Prior to Being Shackled by Your Large Smartphone Bill.

Before I dive into what will be an extremely-detailed, tactical post for saving you well north of $1,000 per year, let’s take a step back and look at the big picture. If you’re at all like me (handsome, witty, but otherwise quite normal), you 1) have a smartphone and 2) pay through the nose for it.

And if you’re at all like me, you didn’t have a smartphone…say…10 years ago.

Our first step is to admit that ten short years ago, we all at least barely survived without smartphones.

I can’t say I’m any happier now, with my fancy iPhone, than I was without it.

That being said, this post will not be about giving up convenience, but about finding an exact or near equivalent alternative to save you serious money.

One more thing: convenience and happiness are not the same. Gardening, exercise, pursuing higher education, and raising children are inconvenient, but doing all four of those things makes me happy :) You likely have similarly inconvenient pursuits in your life, and are happier for it.

A Step One Sidenote

Some of you are actually less happy since you adopted the lifestyle of the smartphone owner. Your device owns you. For the rest of us, it’s probably just a mild, to moderate addiction.

Step Two: Examine Your Current Cellphone Bill

Background: Julie and I are were with Verizon Wireless on a shared plan of unlimited talk and text, and 2GB of data each month.

Divide your examination into three components: talk, messaging, and data.

Talk

We average 675 minutes per month.

Our top twenty phone numbers that we call account for 94 percent of our total minute usage each month. It gets better when I examine our top five uses:

Messages

Texting is my preferred vehicle of communication between friends. It doesn’t demand they respond immediately and it keeps things short.

Between the two of us, we send about 650 messages per month.

This does not include iMessaging between other iPhone users. Since Julie and I are both iPhone users, we iMessage a lot, and those aren’t channeled through Verizon’s system.

I don’t know where we fall in the spectrum of text usage, but we’ve proven that we use it regularly, and that it would be an adjustment to go without it.

Data

This is the expensive part. I think across the board, data is the most expensive aspect of everyone’s smartphone plans.

Our data usage is about 1GB per month. We’re “lazy” about our data consumption, in that we don’t ever throttle our usage, wait to be in a wifi area, or generally maintain awareness of its consumption at all. Why would we maintain awareness when we rarely cross the 50 percent usage threshold (more on that later)?

Data is the carrot that carriers dangle so tantalizingly in front of us. It’s the reason some of you will resist the remainder of this post. You can’t imagine your life without a data plan, and instant, everywhere-access to whatever addiction you’re currently nursing on your smartphone ;)

I have an answer for you, where you’ll give up almost nothing, and gain a whole lot of money, and quality of life in return.

Step Three: Mentally Walk Through Your Day, and Locate Wireless Internet Around You.

Short Analysis:

My time not in a wifi-available area is limited to:

Long Analysis that You Can Skip If You’d Like:

I wake up at 4:30 AM, in an overflowing bath of virtual wifi data, for which I’m paying $50/month—whether I use it or not. As I put on my gym clothes, drink my protein, and eat my apple, the Wifi access just floats around me. Plenty of it. More than I could ever use.

I leave for the gym at 5:05 and about fifty feet from my house, the wifi signals fade away. The gym does not broadcast wifi, and I wouldn’t need it if they did. I’m there to work out.

Home at 6:45, I’m back in a wifi area that I’m paying for.

At 8:00 the kids are sent off to school, and I walk the dog. There is no wifi during the walking of the dog, but that’s okay because it’s My Time to Think.

At 9:00 I’m back home, back where the wifi is plentiful (that I’m paying for, but rarely using—notice a pattern here?).

Here’s where I practice the piano, basically wasting the available wifi, since I don’t use it while practicing. Or showering for work.

By 10 AM, I’m off to work, with a 12-minute bike ride to the office. There is no wifi during the ride, and if there were, I couldn’t use it anyway. I survive.

Once in the office, wifi is available. Readily available. There for my consumption, and I greedily eat it up as I manage whatever needs to be managed for YNAB.

The 12-minute ride home at 5:15 PM is still wifi-less. Survivable.

Once home in the evenings, my home wifi is waiting, readily available, and stays that way until I go to sleep at 9:00 PM (You would too if you got up at 4:30 AM).

Wifi Availability Conclusion

If you’re anything like me, it’s probably all around you, for a very large chunk of your day. Based on some quick time analysis I did, I have available wifi during 88 percent of my normal day.

What does this mean for the expensive data plan I’m on? It means I’m paying through the nose to use half of the data (one nostril’s worth), where that convenience can be employed for maybe 12 percent of my day. I’d be stupid to use the data while I’m riding my bike, or driving, so I could only really use the data during the walk with the dog (again, that would ruin my Time to Think), or other exceptional uses. So without riding or driving, those data use cases are really only available to me about eight percent of my day.

What a ripoff. WE ARE BEING RIPPED OFF.

I’m paying two times more than I should (because I only use half of my available data), to use a benefit that’s available for one tenth of my day.

Let’s start using the wifi readily available to us, shall we?

Step Four: Ditch Your Cell Minutes, and Chat over Wifi

A Quick iOS-specific Aside

Going back to my cellphone minute usage, Julie and I combined are the top chatters. I know her schedule, and know that she’s also bathed in wifi that we’re paying for and not always using. We’re both on iPhones, we’ve both updated to iOS 7, and now we’re both recognizing the benefits of the new FaceTime Audio feature (there may be an Android equivalent, I didn’t dig deep there).

FaceTime audio is a lower-bandwidth option than FaceTime video (because there’s no video), but limited to Apple devices. It’s only available over wifi, but we’ll talk about how to get wifi anywhere further on this post, so no worries there.

Bonus though:

“FaceTime Audio also provides a sharper, higher quality sound than traditional phone calls by utilizing the technology known as “Wideband Audio.” The difference is as clear as comparing a 1970′s television set to a IMAX screen. Once you hear the difference, you’re unlikely to want to go back to regular cell phone calls. Plus, the service is free.” (source)

I snagged Julie’s phone and swapped out my mobile number for my FaceTime Audio option as a Favorite in her phone. We’ve chatted over Facetime Audio for the past two weeks and the sound quality is stellar. It sounds like she’s in the office with me.

And Now for the Non-iOS-to-iOS Use Case, Which is Much Larger:

We want to chat over wifi, not cellphone towers.

Step Four (A): Sign up for Google Voice

Google Voice is not a mobile phone service provider. It’s a fancy router for your phone number, so you can do fancy things with it. You can learn about the specific features here, if you’d like, but I’ll just speak specifically to how I’m using it to save a bundle.

(Optional): Port Your Cellphone Number to Google Voice

The port cost $20, and is totally optional, but I wanted to do it so if I ever change my cellphone setup, I’ll just tell Google Voice to forward calls to whatever new cellphone I get (or any other contact point). Having your number with Google Voice gives you the flexibility to basically never have to port your number again :)

Just as a quick example, let’s say you’re at your employer’s for eight hours Monday-Friday, instead of having personal calls go to your cellphone, you’d have Google Voice route the calls to your work office number, but would have that happen Monday-Friday, from 9:00AM-12PM and 1PM-5PM (lunch break). People calling you wouldn’t know you picked up on the office phone of course, but you’d be saving minutes. This suggestion only applies if your employer is cool with it.

The port took 22.5 hours, so their estimate of 24 hours was pretty spot on. Also, Google was very clear on the ramifications of porting my number. Read those carefully.

To be clear, when Google Voice is forwarding, you’re still paying for minutes. And as I mentioned before, we don’t want to be using minutes. We want to be using the bounteous wifi available all around us to make and receive calls like everyone else. Let’s leave Google Voice for a moment, and talk about Talkatone.

Step Four (B): Install Talkatone on your Phone

The Talkatone app is a bit kludgy, it has ads (you can pay to have them removed but, honestly, they’re not that big of a deal), and the workflow could be a bit nicer.

BUT, it integrates seamlessly with Google Voice, where setup takes just a minute or so. And then you’re making calls over wifi, with your Google Voice account.

I originally set this all up using Skype, which cost me a bit of money, because I was certain that was the way I wanted to go. I was wrong. Talkatone was just as good as Skype in my testing, and costs nothing.

When setting up Talkatone, make sure you turn on the appropriate notifications for it, as an app, on your phone. For instance, on my iPhone I have it set to alert me, and make a sound—equivalent to what my phone would do if it were ringing through the native phone app.

A Few Nice Features

1) Call Screening
Google Voice has this great feature where you can basically have people report who they are, then Google Voice calls you and let’s you hear the recording. You can then decline or accept the call.

For me, this is awesome. I seem to receive business solicitations more than ever, and declining those will feel so good.

You can set up groups for your contacts, where specific groups always bypass the screening. For instance, I wouldn’t necessarily screen my wife’s calls (she’d be using FaceTime Audio anyway…but you get the drift).

2) Targeted Voicemail
With your contacts in groups, you can prepare specific voicemail messages. For instance, if you’re a small business owner, you’d want to default to having a “business-like” greeting for your voicemail, and a personal one for family. You could reserve a special one for your mother-in-law calling from Alabama…maybe you could say something like:

“Mom?…Mom?…You there? It sounds like you’re breaking up. Hang up and try to call me again…Go on and hang up…just call me right back.”

Hilarity ensues.

We’ve handled minutes usage. We’ll only make and receive calls when we’re in a wifi-plentiful area. Need for “normal” cellphone minutes: zero.

Step Four (Righteous Indignation): Breaking Down on the Side of the Road

I’ve mentioned my plan to lots of people over the past two weeks, and EVERY SINGLE ONE has asked me, “What if you break down on the side of the road?”

Originally, I entertained the idea of an emergency cellphone (or two, one for each car) for this scenario. However, the monthly maintenance cost, and thought overhead required, is too high. I looked at Tracfone, with two $10 phones, and 30 minutes of prepaid minutes that would last a year for each phone, and we’re already at $20 per month. Unacceptable.

So I looked harder for a cheaper option. No dice.

Whereupon I convinced myself that an emergency cellphone is unnecessary. This internal struggle reminded of the late comedian Mitch Hedberg’s bit:

“I sit at my hotel at night, I think of something that’s funny, then I go get a pen and I write it down. Or if the pen’s too far away, I have to convince myself that what I thought of ain’t funny.”

Now, you certainly can accept the cost of an emergency cellphone, but consider the fact that ALL of these things would need to happen, in order for you to require one:

  1. An emergency would need to take place that was NOT worthy of 911 (you can dial 911 on any cellphone, whether or not it’s attached to a cellphone plan), AND
  2. There would be NOBODY around, whose phone you could borrow (remember, it’s a non-911 emergency, so the time sensitivity of this emergency would likely drop, making this even less likely, AND
  3. There would be no wifi available (likely, if #2 is happening), AND
  4. Plan B from an upcoming Step Six would fail.

From my recent podcast #94 – “Cellphone, Unshackled” (where I work this written plan through verbally, and was less accurate as a result), I had a podcast listener write in with the following firsthand observation. David gave up his Android smartphone last year and this is what he had to say about pre-paid backup phones. Read this slowly, then re-read it, and let it really sink in:

“For a brief while, I had a pre-paid backup phone. I ditched it when my minutes expired. Almost everyone else these days has a cell phone and every business has a land-line. If you look like you need help or you ask nicely in a safe space, many people will gladly lend you their phone for a moment or two. When I had a flat tire last Thanksgiving, a police officer offered to make a call for me.

As you said on the podcast, people got by just fine not all that long ago without cell phones.

Needing to rely on myself and strangers rather than just calling my nearest friend or family member for help has been a salutatory experience. It’s made me prepare ahead a little bit more and to pay closer attention to what resources are available just for the asking (both of which I think are excellent skills for a budgeter to practice).

When that police officer offered to make a call for me, I didn’t need it—I had everything necessary to fix the flat on my own. When I started looking around, I discovered that payphones hadn’t really disappeared from suburban America—they’d just moved inside supermarkets and Wal-Marts where vandals can’t easily damage them.”

This from a guy that’s been living sans ANY phone for the last year. I’m hoping others will chime in on the comments and relate similar stories.

If you’re still feeling your stomach turn knots over the idea of not having an emergency phone, the BEST solution I’ve found came after I’d given up the idea, courtesy of the Mr. Money Mustache forums:

“As a less extreme emergency phone only secondary option that still lets you call home or a tow truck or something while on the road if needed, obtain any Verizon or Sprint phone (might work with other regional CDMA carriers, not 100% certain on this yet – it is important that it’s a CDMA phone with a clean ESN, though – most people who do this seem to favor using Verizon handsets) take it into the store and have them deactivate it as before for the 911 only option and get the MIN/NAM set to identify the phone number as 123-456-7890 (the universal deactivated handset identification number). From this point, you should be able to try making a call and getting a woman’s voice talking about making a collect or credit card charged phone call. Congratulations! In addition to making 911 calls, you now have access to the American Roaming Network (ARN) and can make outgoing calls to the US and Canada. Although horrible expensive doing collect or credit card based calls, you can buy a 60 minute PIN card for $20 that will last a year and you can recharge the PIN account at a 25¢ a minute rate afterward. This is the perfect, lowest-cost non-911 exclusive emergency phone for the glove box option available. As before, this is also a great option to keep in mind if you’re going to try the ultra-extreme WiFi/VoIP only with no wireless carrier option with your smartphone (still not recommended). If you go this route or the 911 only route, just keep that phone turned off with about a 2/3rds battery charge in the glove box and with a car charger, and you should be covered. For safety sake, be cautious of really hot lithium ion batteries during usage in the summer, though.”

Let’s move on to Step Five, and talk about texting. This part’s easy.

Step Five: Free Texting Through Google Voice, Through Talkatone

And…that’s pretty much it. You can send and receive free SMS texts. At this point, with my testing, you cannot send pictures via text, but hey…maybe just email the picture.

A few things to note:

  1. There is currently no MMS support from Google Voice (boo), so we’ll live without it. You will not receive group texts from iPhone users unless they send it to you as an iMessage.
  2. You can’t send group texts with Talkatone. You can send group texts from within your Google Voice account on your browser, and I’ve used that as a workaround once when I had to text a half dozen people. Small price to pay for free texting, in my opinion.

Texting has been taken care of. It’s free, people. Never pay for it again (and yes, unlimited texting plans still cost money…because the unused capacity of other features pump the costs up…)

Let’s get to the biggest catch of all. Data.

Step Six (A): Go on a 24-hour Data Fast.

Every one of your smartphones lets you turn off your data. Grab your phone (if you’re not already holding it as you read this, you addict! ;)), go to the settings, and turn off the data connection.

Do not turn it back on for 24 hours.

What happened?

I’ll report my own experience, which is now going on two weeks: Nothing has happened. Except when I was at the drive-thru of Jimmy John’s (hey Jimmy John’s, could I get a truckload of coupons for mentioning you guys specifically? I could use ‘em), and found out they’re not as lightning-fast with your sub if you opt for the lettuce-wrapped Unwhich. Once I realized I’d be waiting in the drive-thru longer than 25 seconds, like an addict, I went for my phone:

“I wonder what’s going on with Twitter?! Who’s updated their Facebook status? Is there some random information I should be consuming right now? Has the President of the United States invited me to dinner tonight?! I’d better check my email to see…”

Those kinds of thoughts. In the space of waiting 45 seconds for my Unwhich to arrive.

Then I realized my data was turned off, and tossed the phone back on the other seat, thinking one thing: “I am such a sucker.”

So turn off your data. You’ll be surprised how little you need it. DON’T TURN IT BACK ON.

Step Six (B): Analyze Your 24 Hours Without Data

Here’s what you’ll realize. You’ve been had.

The vast, VAST majority of you have no real need for data. It’s a big distraction in your life, masquerading as a time-saving convenience.

And yet, this wolf in sheep’s clothing is why your cellphone bill is astronomically expensive. It’s the allure of the data…floating available everywhere you DON’T have wifi. And remember your wifi analysis? You probably could only consume data for about 10 percent of your day.

You’re fundamentally NOT getting what you’re paying through the nose for.

Step Six (C): Keep Your Data Turned Off.

And once you’ve gone a few days without it, change your cellphone plan.

Step Six (The Alternative)

If you’re worried about never having data, and being in a tight spot where you need it (Google Maps directions (which can be covered with a one-time $30 app for offline maps called Sygic, checking email for a legitimately time-sensitive item, watching YouTube videos during your lunch break off-site…), I introduce you to Karma.

Karma is a remarkably small device that could easily fit into your pocket (not conveniently, because I hate having full pockets). This little device is a mobile hotspot, and will take 4G cell data and give your phone, computer, or other wireless device a wireless connection.

The device costs $99 and comes with 1GB of data use. For every additional gigabyte of data, you pay $14. You pay the $14 up front, and Karma warns you when you’re approaching your limit. Fourteen dollars per gigabyte is much cheaper than you’d pay any major carrier.

Everything about Karma I like. Their design is spiffy (and we here at YNAB appreciate that), their communication is clear, and you get the feel that they genuinely want to make the whole process easy for you.

This is in comparison to their competitor, FreedomPop (not worth a link), that claims you get FREE data all over their website, until you go to sign up, where they then (in very small print) let you know that they’ll charge you some monthly amount thereafter. That, and the fact that their Amazon reviews reeked.

Anyway, back to Karma, you only pay for what you use, there is no monthly plan which, by definition, eliminates that thing about YOUR data plan that you should be hating right now–the fact that you will ALWAYS pay for something you aren’t completely using.

In my field testing, it worked great. Check their coverage map to see if it will work for you. However…

Now that I’ve bought the Karma device, I’m sure I’ll bring it with me when I travel, but would I recommend it for you right out of the gate? Nope. Go for a while relying on just wifi for your data. You’ll be pleasantly surprised at how LITTLE you need that data after all. In two weeks, I haven’t used Karma once, except to test it for this blog post.

An Option For Those of You Scared Out of Your Minds

First, don’t let the contract “out” fee scare you. The savings you amass from switching away from a big carrier pays back most contract cancellation fees in a matter of months. The carriers want you to fear that contract cancellation fee. Fear not.

Second, you don’t HAVE to go wifi-only, as I have, in order to amass some significant savings. Mark switched to Ting, and I’ll likely be easier on Julie’s workflow, and switch her to Page Plus (a Verizon-based small carrier), where they have a $12/month plan with 250 minutes, 250 texts, and 10MB of data.

Julie will need to have her phone tweaked just slightly:

This would cut her minutes from around 400, to about 100. So she’d be well under the 250 minute cap.

The texting would be easy for her to stay under as well, because 1) I wouldn’t be texting and 2) she’d be using iMessage for most of her friends (we tallied them up, most have iPhones).

The data will need to be turned off on her phone, so she won’t use up the 10MB in a heartbeat. If she does have a “data need” emergency, she can turn data on and use some of it.

If I wanted to take the VERY soft approach, I’d move Julie to the $30/month plan, and she wouldn’t notice a thing had changed–except for the fact that we’d be paying $70 less per month. I like going for the phone bill’s jugular on this though: $12 plan it is.

Look for the prepaid, no contract providers that are already working with your phone’s underlying network. Here’s a fantastic list to get you started.

A Conclusion Full of Options

In the end, the main takeaway is this: Don’t be a sheep and follow all of the other sheep over the cliff (as they grab their phones and Google “how to levitate in a pinch.”). Consider your options and be INTENTIONAL about what’s bringing you happiness—not just convenience.

You can:

1) Ditch your phone completely
2) Go wifi only, as I have
3) Switch to an MVNO (mobile virtual network operator) for big savings, and no disruption at all to your “flow” (what I’m starting Julie on) or
4) Keep doing what you’re doing, and make me sad.

Your call, but we’re now saving ~$145/month, and that’s nothing to sneeze at.