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How to Save Money on Your Cell Phone Plan

5 minute read

By Jim Greene

For most people, cell phones have become an integral part of everyday life. They also represent a significant monthly expense, especially for consumers who opt for high-end plans that deliver that fastest possible speeds and “unlimited everything.” If you’ve been wondering how to strike a better balance between your cell phone usage and your bank account, you’re far from alone. Millions of consumers are in the same boat as you.

Here are six helpful tips to save you some cash:

Audit Your Actual Usage

Your cell phone usage patterns will yield important clues as to where you should start your search for savings. Most people get value out of plans that deliver unlimited texting, but fewer and fewer people use their phones to actually, you know, call people. Are you paying for unlimited anytime minutes? Do you even come close to using them? If not, that’s a sign that you’re overpaying for services you don’t actually need. Remember that you can also use VOIP services like Facetime or Skype to make voice calls over WiFi instead of eating up your calling minutes.

Do the same with your data. If you’re always on the go and reliant on your phone for internet access, you may genuinely need a plan that provides unlimited data. Or at least a healthy amount of gigabytes. However, if you only require occasional connectivity, you can likely get by with a less expensive plan with lower capped data limits. Another thing to consider: WiFi is available pretty much everywhere nowadays. Instead of connecting to your mobile network, use WiFi while at home, in the office, at the local cafe, or beside the library. This conserves your data usage for times when you have no other option.

Switch to a Prepaid Plan

Prepaid cell phones were once the domain of no-name carriers with questionable reliability. That’s no longer the case, as most major telecom providers now host branded prepaid plans. These plans come with affordable flat rates that carry no hidden fees or charges, making them an excellent option if you hate the surprises you find on your phone bill.

A 2017 market study by the Tax Foundation found that 18.6% of the average American consumer’s wireless bill was comprised of extra charges and fees. Why pay that extra money when you don’t have to? Prepaid plans run on the reliable networks of major carriers, and most even allow you to keep the same phone number when you switch. As an example of the savings you can enjoy: a 2018 deal offered by Cricket charged customers just $50 per month, including taxes, for unlimited plans that delivered about $200 per year in savings compared to comparable AT&T services.

Skip the Phone Insurance

Phone insurance plans claim to protect you in the event that you lose, damage, or accidentally destroy your phone. However, did you know that many restrictions are buried in the fine print? These clauses often limit the amount of coverage you are entitled to if you ever need to file a claim. Most industry insiders recommend skipping the insurance, as it will almost always cost you more in the long run — even if you make a fully covered claim.

The exception to this rule is for those who have high-end smartphones that cost thousands of dollars. Insuring a premium or luxury phone can be a good idea. Of course, it depends on the cost of the coverage, the level of protection it offers, and the estimated cost to merely replace a lost, damaged, or stolen handset yourself.

Check if You Qualify For Extras

Some cell phone plans come with appealing extras that can save you money in other ways. For example, companies like AT&T and T-Mobile have plans that deliver access to popular entertainment platforms like Amazon Prime, Hulu, HBO, and Netflix, among others. Your access will carry over to other devices, allowing you to watch at home on your laptop or smart TV.

Why pay double for any of these services? If you have an existing subscription for Netflix or ESPN+ but could switch to a cell phone plan that includes it, you should cancel your current subscription and save some cash.

Go for a Group Plan

Family plans aren’t necessarily limited to family members. Many carriers feature group plans that allow members to share a pool of calling minutes, text messages, and data usage for a single fixed price. These prices are always configured to be less expensive than you’d pay individually for similar services. They can be a great option for roommates, spouses, siblings, partners, and BFFs.

Hot tip: if you decide to check out a group plan, find one that allows you to roll unused texts, minutes, and data from one month to the next. This delivers more value in the long run than plans with usage features that expire at the end of the month if you don’t use it all. You can even opt for a package that will automatically offer you a device upgrade every couple of years. Just double check to make sure your current device is compatible with your preferred group plan carrier. One other thing — make sure you trust whoever you enter into a family plan with. Otherwise you might find yourself arguing over who used all the data or how to fairly split the bill.

Change Carriers

Market competition is a healthy thing. It usually acts to keep consumer prices as low as possible. If your current carrier won’t offer you a better deal than an advertised competitor, or if you’re dissatisfied with your service, don’t be afraid to make the switch to a different provider.

Nowadays, you’ll have to deal with fewer inconveniences of switching. Most major carriers have to allow you to keep your current phone number and device (provided it’s fully paid for). Finding a better plan for a lower price is still the easiest and most straightforward way to save money on your cell phone coverage. At the very least, threatening to cancel might make your current provider “suddenly realize” you’re eligible for a previously unmentioned discount.

If you’re an older adult, you can also look for senior-friendly cell phone carriers. Certain carriers, like Consumer Cellular and Jitterbug Mobile, specifically cater to older customers ages 55 and up. They offer affordable pricing and cell phones that will meet your needs, stripping away extras and hi-tech features that you may not want to pay for. Other carriers, like Sprint, T-Mobile, and Verizon, may offer senior discounts and senior pricing. By switching to one of these carriers, you could save on your monthly cell phone bill.

Speaking of senior-friendly phone plans, you should also check your eligibility for a free government-subsidized cell phone, courtesy of the Federal Lifeline Assistance program. To be eligible for a free or discounted phone with affiliated carriers, seniors must participate in a qualifying government assistance program, such as Medicaid. Alternatively, your income must be at least 135% below the federal poverty guidelines.

The Last Word

One final tip to keep in mind if you do decide to change to another provider. You need to watch out for early account termination fees. If you signed a service contract locking you in for a set number of years and you leave before that period is up, you’ll be on the hook for a contract termination fee. This can really eat into your savings, depending on the provider and the cost of the fee. So make sure to factor it into the equation before you jump ship.

Cash Money on Table by Mobile PhoneShutterstock

Jim Greene


Jim Greene is a freelance writer based in the Toronto, Canada area. He has been writing professionally since 2001 and has an extensive professional background in consumer research, personal finance and economics.


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