One of the last big splurges before I left my career behind was the purchase of fancy new cell phones for my husband and myself. I wanted a smart phone and he wanted one that was also an mp3 player. I could get a great deal on the phones we wanted if I signed on for another 2-year contract.
I couldn’t imagine not having a cell phone, and all my calculations indicated that we could afford the monthly cost, even if I wasn’t working. But of course unexpected things came up, and money was a little more scarce than I had thought it would be. Since I was at home most of the time, my cell phone sat unused.
I regretted signing up for that 2-year contract every time I saw the monthly bill.
I counted down the days until the contract finally expired in December, and was excited when I could finally make a change: I switched our contract phones to prepaid, and will save over $600 per year! Our AT&T family plan was costing over $70 per month, and we were using only 15 minutes on average.
We were clearly wasting our money, but I still wanted a phone in case I became stranded or had some other emergency away from home. I found out that I could switch our existing phones and phone numbers to prepaid–I wouldn’t need to purchase pricey new prepaid phones.
AT&T offers a variety of prepaid options, and determining the most cost-effective plan of action can be confusing. I knew I wanted pay-per-minute rather than another monthly plan, but couldn’t decide between the more expensive per-minute rate with no access fee, or the cheaper rates with daily fees. Finally I determined that the break-even point was about seven minutes of use daily.
With the access fee, seven minutes would cost $1.70 (10 cents per minute plus a $1.00 access fee for using the phone that day). With the “Simple Plan” I would pay 25 cents per minute with no access fee, so seven minutes would cost $1.75. Our daily use is typically less than seven minutes, so the Simple Plan was a better deal for us.
I headed over to my local AT&T store to make the change and it was very simple. The sales rep merely punched a few things into the computer and both our phones were good to go–we didn’t even need to change the SIM card.
I paid for two $100 prepaid cards up front. Unlike the lower value cards, which expire after 30 or 90 days, the $100 cards are valid for a full year. I don’t expect that we will go over that amount, so we will pay just $200 for two cell phones that had been costing over $840 per year! We still may not use the full amount we have paid for, but in the end it is cheaper than maintaining constant service with lower value cards that will expire quickly.
There were a couple caveats. Apparently phone numbers that have been changed from contract to prepaid can never be transferred back to a contract. I would have no data service on my smart phone, but that did not bother me since I had purposely chosen a phone with WiFi and had never used data before. The switch went off without a hitch, and our service has been as reliable as ever. I am very pleased with the change.
It’s hard for most people to believe how little we use our cell phones. For us, they are a luxury we just can’t afford, and there are other ways for us to keep in touch with family and friends. As much as I love the latest tech gadgets and internet at my fingertips (oh, what I would give for an iPhone), I would rather put that monthly expense toward something that we really need. I’m home most of the time, so I just use our home phone (we pay about $20 per month for Vonage) instead of my cell for lengthy calls.
I know prepaid plans aren’t a viable option for everyone, but if you are an occasional user like us and have a tight budget, you should definitely look into prepaid as a cost-saving option.
I wonder if Verizon has such a thing. All our family uses Verizon so it wouldn’t make much sense to change carriers, but we don’t use most of our minutes in a month either, even with 3 people on the plan.
I just checked on the Verizon website and it looks like they have the exact same prepaid option – 25 cents per minute with no access fee, and $100 per year refills. I’m not sure how they handle switching existing contracts, but it might be worth looking into.
I wish I could do this and switch to a prepaid plan, but because we don’t have a house phone our cellphones has become a necessity for my family. However, as soon as I get a house phone you can gurantee that I will be checking with AT&T on their prepaid plans. This sounds like a very good option and for just $200 a year that is great.
Thank you for this article and these awesome tips.
Take care,
Shynea
Thanks Shynea! 🙂 My sister does the same thing – she and her husband only have cell phones. We have done well with Vonage for our “land line” for several years. One of the reasons we chose to go that route instead of strictly cell was the international calling rates. My husband’s family is in England, and it costs only a few cents per minute to phone over there with Vonage. We were also able to have a “virtual phone number” in England for about $5 per month, so his parents could call a local number (for them) and get through to us in the US. I think I will have to post about Vonage eventually too 🙂
We did away with our home phone and went with a Straight Talk Samsung R810C which has 3G and all the bells and whistles.This cost $328.99 and then we added the unlimited usage plan for $45.00pm. We have teenagers who use the phone after school-and boy do they use it- but they have to do homework and chores first! This one phone does the whole family and we are able to budget phone costs to last cent.
Thanks for your comment, Rosemary. That sounds like a great plan! So many families get in too deep when they give their kids their own phones. It can be so expensive! And of course the constant texting and phone calls can be a huge distraction for teens.