Budget Guides

Ultimate Guide to Reducing Your Cellphone Bill

Cellphones are no longer a luxury item, they’re a necessity. They’re no longer used just for calling for help in case of an emergency, they’re used to manage your life, keep up with your friends, do business, and find the best place to grab tacos. We need our cellphones. Many homes don’t even pay for a landline anymore, they only use their cell.

But using them to manage our lives can be pricey. In fact, the average cellphone bill is about $73 a month per line. And that’s just for a basic plan. Need extra data? Want insurance to cover potential damage? Want to use your phone as a Wi-Fi Hotspot? That will cost you significantly more. In fact, there are at least a dozen upgrades your carrier can offer you to bulk up your bill.

And there’s the first important trick of cellphone pricing – many people assume that what they pay is just what they have to pay. Maybe you’re afraid of looking for another plan for fear that you’ll lose your number or some of your services. So it’s understandable that you just keep paying month after month without closely examining your bill or trying to lower it.

But what if I told you there were several ease and pain-free fixes you could use to save you money on your cellphone bill without having to change the way you use your phone? Check out these pain-free hacks to see if they can help bring your bill in line.

Quick Ways to Save

Easy, Pain-Free Hack #1 – Insurance

Are you paying for insurance on your phone? Chances are you’re being billed for it and you don’t even know. Many carriers often try to get you to buy in to a small monthly fee to cover the cost of your phone should it become damaged. The fact is, you don’t really need this insurance. Why? Two reasons.

First, if something does happen to your phone, you’ll most likely have to pay a deductible. Add that to the monthly fee you’ve been paying for insurance and now you’ve paid more to replace your phone than simply buying a new one without the benefit of insurance.

Second, not all damage is covered under insurance, like water damage. So, drop your phone in the kitchen sink while you’re doing dishes and you’re out of luck. You’ve paid for insurance every month and you still have to pay for a new phone. Go ahead and cancel the insurance. Save yourself the $10 or so that your carrier is charging you.

Easy, Pain-Free Hack #2 – Check Your Bill

Do you know what every single charge on your bill is for? If not, it’s time to question your carrier. Spend a few minutes thoroughly reviewing every line item on your bill. You may be surprised to find that you’re paying for things you don’t need or didn’t even know you had. If that’s the case, contact your carrier and cancel these services. You may only save another $10-$15, but add that to the $10 you’re saving by cancelling your insurance and you’ve already lowered your bill by $20-$25.

Easy, Pain-Free Hack #3 – Benefits

Review the employee benefits offered by your employer. Your company may have an agreement with certain carriers to offer their employees discounts and you may be missing out. Do you belong to any national organizations or clubs? If so, there’s a chance that you can receive discounts based on your club memberships. If you’re not sure, make a list of all the organizations you participate in that could possibly offer a discount. Then call your cellphone carrier, ask for the billing department, and run through the list with them to see if they offer discounts for any of these groups. You may be pleasantly surprised.

These easy, pain-free hacks are a great way to look at options for lowering your cellphone bill without changing your plan, your carrier, or even your phone. You can check all three hacks in under an hour by reviewing your bill then contacting your carrier.

Money-Savers When You’re Under Contract

Now, what if you’re under contract? Can you still find ways to further reduce your bill? Absolutely!

Find a plan that fits

The first thing you can do is to look for a cheaper contract with your current provider. Most service providers will allow you to reduce your plan instead of cancelling your service, avoiding the cancellation fee. They want to keep your business so they’re happy to help you save money if it’s a choice of keeping you or losing you.

Review your last three months of statements to determine your actual usage. You may find that you’re not using all of the minutes or data that you’re paying for. If this is the case, look for a plan that provides less. Most people think they need a ton of minutes and/or data and don’t even pay attention to what they actually use. For instance, if you’re on a shared plan with other family members or friends and most of your calls are to each other, you aren’t charged minutes for these calls because you’re calling one number in your account from another number in your account. If that’s the case, it’s highly unlikely that you’re using all of your minutes.

Avoid overspending on data

And if you usually use your home or work’s Wi-Fi to access the internet and social media apps on your phone, you’re probably not using anywhere near all of your data. With free Wi-Fi almost everywhere you go, it’s no longer necessary to have a plan with high amounts of data.

If you’re concerned that somewhere you’re going doesn’t have data and you want to watch videos on the go, download them in advance while you’re connected to your home Wi-Fi.

You may also want to set up notifications on your cellphone account to let you know when you’ve used a certain amount of data. This will help you keep that usage in control. I know, you want to be able to access what you want, when you want, regardless of where you are. But just remember that you’re trying to reduce your bill so that you can save money. And the money you save will be used to build your wealth. Isn’t that more important than watching YouTube in the car?

To reduce your data usage even more, you can change your settings on your service. You can set your phone so that you don’t receive push notifications, don’t download any content, and don’t make any updates unless and until you are connected to Wi-Fi. This will take the guess work out of it for you. If you’re phone won’t download content, it’s because you’re not connected to Wi-Fi.

Reducing your plan

Requesting to reduce your data plan with your cellphone provider is easy and can usually be done in one quick phone call or online chat session. With some providers, you can even do it on your own through their app. (Just make sure you’re connected to Wi-Fi when you do!) Before reducing your plan though, it’s important to review your recent bills to confirm that you don’t need all you’re paying for. This will also confirm for you that you don’t need to use data as much as you do. Chances are you can downgrade your plan and stay with the same carrier without any interruption in service. And of course, save money.

Move to a joint account

One last tip for cellphone contract holders, combine accounts to save money. Instead of having individual plans for everyone in your household, combine your accounts by adding a line and dropping any additional/unnecessary plans. Many providers offer discounts when you have more than one line and you can share your data and minutes.

A standalone plan may cost you around $75 a month, but an additional line on a shared plan usually only costs an additional $10-$20. And if you’re not using all of your minutes and data, you won’t need to increase your plan, you can just share the minutes and data you’re currently paying for.

Just because you have a contract that you’re locked into, doesn’t mean you can’t reduce what you’re paying. Your cellphone provider might want to charge you several hundred dollars for early cancellation of your contract, but they’ll gladly reduce your plan in order to keep you as a customer. One thing to be aware of though, reducing you plan usually means starting a new plan which means starting a new contract. Instead of being months or even a year into your current contract, you’ll start fresh as if you had renewed. This isn’t the case with all providers so be sure to ask.

Money-Savers When You’re NOT Under Contract

If you don’t have a contract with your current cellphone carrier or your contract has expired, it may be time to look at another, no contract option with another carrier.

Consider alternative carriers

Many of the non-major carriers share cell towers with the major carriers so the service areas and call quality are comparable, just at a lower price. And if your goal is to keep your data usage down and only use Wi-Fi, you won’t have any trouble at all using a non-major carrier’s service.

Do your homework and find a plan that meets your needs. You can visit NerdWallet for a comparison of cellphone carriers and their available plans.

Go month-to-month

Another way to save if you’re no longer under contract is to consider a pre-paid plan. These offer a very low activation fee for new service and they don’t require you to sign a long-term contract. In fact, they don’t require a contract at all. A month-to-month plan can provide just as much data and minutes as your current plan at a significantly lower cost.

Many of the major carriers like Verizon, Sprint, and T-Mobile now offer month-to-month pre-paid plans with discounted phones and no contract. You can find them at stores like Best Buy, Walmart, and Target. Shop for a phone you like, there are many smartphone options, then choose a plan that fits your needs. Most of these month-to-month plans run $50 a month or less and since you purchase the phone in advance, there is no additional fee for it. Many phones, even smartphones, are less than $100.

Be sure to look for a phone that has all the qualities you prefer like a camera, internet, and texting capabilities. Once you get your new phone all set up, you’ll barely notice any difference from your old phone.

Upgrade less often

Once your current contract expires, you can also hang on to your current phone instead of upgrading. By upgrading, you’ll not only lock yourself into another contract, your bill will go up to make the monthly payments on the new phone as very few carriers offer free phones anymore.

I know that having the latest and greatest model is awesome. Everyone wants to see your new phone and it’s an exciting new toy to play with. But remember the ultimate goal. Adding to your savings and retirement will be much more beneficial to you in the long-run than a fancy new phone. Just keep reminding yourself what’s most important to you.

I’m not saying that you can never buy a new phone, but holding on to your current phone for an extra year after it’s paid off means you can add the money you save on your bill to your savings account. Even if just for a year, it will help you on your goal of building financial freedom. You can live with that old phone for just one extra year in order to build some security.

Remember the big picture

Having a cellphone today is not just a luxury, it’s a necessity. With your family and friends always going in different directions, it’s important to be able to keep up. And if you use your phone for work, you need to have it handy all-day long. You don’t have to give your cellphone up, but finding ways to lower your bill will help you reach your financial goals faster. With just a few, pain-free changes to your plan, you can maintain your service and the freedom it provides while getting you much closer to your goals.

  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Financial Counseling Association of America Financial Counseling Association of America
    MMI is a proud member of the Financial Counseling Association of America (FCAA), a national association representing financial counseling companies that provide consumer credit counseling, housing counseling, student loan counseling, bankruptcy counseling, debt management, and various financial education services.
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Department of Housing and Urban Development - Equal Housing Opportunity Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.