Save serious money on your cell phone bill

phone booth toys

Intro

I’m going to try to keep this short and sweet because it is World Cup time and I want to see more goals like this!!

van persie world cup goal
van persie world cup goal

This post is about how to save a lot of money by switching cell phone carriers.  By my estimates, the average American could work 5.6 days less each year by switching to a cheaper cell phone carrier.  We’re talking about at least an extra week of vacation every year (based on $32,000 median U.S. gross per capita income for working adults), probably more when you remove income taxes from the equation.

The idea of saving money on your cell phone really appeals to me for two reasons.  First, it requires almost no work but continues to pay dividends.  I’ve written before about focusing on recurring contractual expenses for easy budgeting, and cell phones are a great example of that (as is cable tv).

Second, it is so easy to live on the trailing end of luxury when it comes to high-tech gadgets. The latest and greatest phones/gadgets usually aren’t substantially better than last year’s models, but they are inevitably a lot more expensive (especially true for low-competition markets such as cell phones).  So purchasing a slightly older model saves you a ton of money but doesn’t really require a big sacrifice in value.

Anyway, without further delay, here are the numbers.  I’m focusing on the carrier Republic Wireless because that is who we use in my house and because they are one of the cheapest options out there.

The numbers

Republic Wireless offers $5, $10, $25, and $40 monthly, no-contract plans.  They also offer a really nice Moto X smartphone for $300 (comparable to iPhone and Samsung Galaxy), and an almost-as-nice Moto G smartphone for $150.  In this example, I’m using the most popular $25 per month plan and assuming you want the nicer Moto X smartphone.

  • 10 Year NPV: $7,240
  • 10 Year ROI: 157%
  • 10 Year Payback: 0.6 years
roi - switch to republic wireless
roi – switch to republic wireless
chart - switch to republic wireless
chart – switch to republic wireless

So we’re talking about $7,000 per person every 10 years!  Not a bad deal, eh?

Like I said above, this assumes $25 per month unlimited talk, text, and data cell phone plan with Republic Wireless plus a $300 smartphone.  The numbers I’m comparing that to are $80 per month cell phone plan and $200 phone expense, which might be a slight underestimate for a lot of the major carrier smartphone plans.

More about Republic Wireless

The reason Republic can offer such cheap plans is that they route your calls, texts, and data through wi-fi when it is available.  This saves them money, which gets passed on to you.  Like I said we use them and, for the most part, have been pretty satisfied.  Sometimes coverage or wifi-cell handoffs glitch up here or there (mostly in the early days when the phones were just released), but not enough to make the $7,000 not worth it.

Here are their plans:

republic wireless plans
republic wireless plans

As you can see, the big “catch,” at least for the $25 plan is that you are on a 3G data network (Sprint).  This is the trailing end of luxury I was talking about.  I can say first hand that 3G speeds aren’t an issue for us.  The phone still does everything we need at a reasonable speed, and 80% of the time we are within range of wi-fi.  If 4G is important, there is the $40 plan.  And if you think you can do most of your data work within range of wifi, you can even drop down to the $10 plan.

In case you were wondering, I ran the numbers for these plans too:

$10 per month plan:

  • 10 Year NPV: $8,853

$40 per month plan:

  • 10 Year NPV: $4,992

So even with the expensive plan, you’re still saving a lot compared to typical plans on major network carriers.  But the cool thing about Republic is that you can switch plans two times a month if you want (if you were traveling, for example).  Plus, you can save money on international calls by completing them over wi-fi instead of cellular.

Anyway, you get the point…  For little to no sacrifice in value you can save a lot of money with cheaper cell phone plans, so get crackalackin and pocket some extra cash!

Click any of the Republic links above, the ad in my sidebar, or the picture below to get started and help support my blog.  Thanks and congratulations on a good decision! 

republic wireless ad
republic wireless ad

Assumptions

  1. New cell phone every 3 years
  2. Typical plan costs $80 per month
  3. Republic plan cost $25 per month
  4. Typical fancy smartphone costs $200 with plan
  5. Republic fancy smartphone costs $300

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