Life Hack 1: Don’t renew that cell contract!

I wanted to let you all in on a little secret. That free cell phone you are about to get for signing that two-year contact isn’t free. At all. Not even a little. Cell phone companies are in the business of making money, and they should be. They aren’t in the business of giving away free phones, or anything else for that matter.

According to a recent J.D. Powers report, the average monthly cell phone for one phone is $73 per month. If we multiply that by twenty-four, we get $1752 for that two year contract. Let’s keep that figure in mind.

There are lots of cell phone companies that resell cell phone service. Most all of them run on one (or more) of the major cell phone carriers: AT&T, T-Mobile, Verizon, Sprint. These companies are often referred to as MVNOs (Mobile Virtual Network Operators). Some have great rates, some mediocre, some terrible. Most of your “pay as you go” plans are run by MVNOs. Some of these MVNOs are independent companies, others are actually subsidiaries of the major carriers.

I have found a great MVNO that runs on both the T-Mobile and STingprint networks called Ting. They don’t do contracts and their bills start at $6.95 per phone. Yes, under $7 per month per phone. Now before you go there has to be a catch, there is and there isn’t. This MVNO does everything metered. That means they charge you per minute, per text, and per MB of data. If you are a huge power user, this may concern you, and it should. Ting claims, and I believe them, that 98% of users would save money switching to Ting. Ting provides you several tools and calculators on their website that let you accurately project your costs.

For my family, we have two smart phones and our average bill is about $35. It varies from as low as $25 and as much as $45, but 90% of the time it is $35 per month. We have done some tricks to keep our data, voice and text numbers low, but they are easy tricks, and you are probably already doing them.

To go back to that average number from above. $1752 for that two-year contact (for just one phone). Compare that to $29 per month (single phone) for two years and you get $348. Now add on a top of the line, fancy smart phone for $500 or so each, and you are at $1348 for the year. You already saved $404. If you already happen to own a smart phone that is unlocked and compatible with Sprint (PCS) or T-Mobile (or AT&T), you can save that phone cost because you can bring in your own phone at no cost.  You can probably find a gently used or refurbished phone from Ting or E-Bay and save money that way too! Of course, to get the top of the line smart phone from the carriers, they are usually not even free, so add whatever extra costs Verizon or At&T tacks on!

Ting is just one example. Check them out and check out other MVNOs and see what else is out there. I guarantee you will save money, and then check back here as I post various tricks I use to keep our cell phone bills low.

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