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Save money on your cell phone plan

Cell phone service is turning into a big monthly expense. People are using their smartphones for more things like watching movies, using thousands of apps and playing video games. Data usage is on the rise and so are cell phone bills. A monthly cell phone bill of $100 or more is pretty common. Luckily, I found a cool calculator that helps you compare pricing plans based on your own usage.

Recurring monthly bills for things like cell phones, Internet, cable and insurance eat up your income like a ravenous dog. For most people, there is nothing leftover to save for retirement. That is why it’s so important for everyone to be diligent about keeping these recurring monthly charges to a minimum.

A few months ago, it was time for me to renew my cell phone plan. A $20 monthly increase to a bill that in my opinion was already too high prompted me to do some research. What I discovered is the monthly price is primarily based on how much data is used. The days of pricing plans based on voice minutes and number of text messages is long gone.

The big gem found during this foray into the wireless carrier morass was a simple-to-use calculator created by The Wall Street Journal. It compares the monthly costs of the four major carriers (T Mobile, Verizon, AT&T and Sprint) based on your input. You can find the calculator at this Web site: http://graphics.wsj.com/PhonePlan/

You input into the calculator how many phones and how much data you want. Here’s an example for one person that doesn’t use much data (i.e. like me). One phone and 500MB of data results in monthly costs of $50 for T Mobile, $70 for Sprint, $80 for Verizon and $85 for AT&T. Another example for a couple that uses lots of data. Two phones and unlimited data results in monthly costs of $120 for T Mobile, $150 for Sprint, $455 for Verizon and $560 for AT&T.

The price differences at the higher data usage levels are a bit shocking. It is important to point out though that the T Mobile prices don’t include a phone. You pay for that separately or bring your own. Verizon and AT&T spread out the cost of their phones over the two year contract. That is why T Mobile doesn’t require a two year contract.

It sure looks obvious for high data users to look at T Mobile and Sprint. However, the other factor to consider in this decision is signal quality in your area. Check out the Web site RootMetrics.com to compare the strength of call and data signals in your area.

In San Diego, RootMetrics reports that AT&T, Verizon and T Mobile all score equally well for voice and text signals. AT&T and Verizon have a slight edge over T Mobile for data signal strength. Does that slightly higher rating justify the higher pricing? That is your decision as a consumer.

The primary lesson is to be a smart shopper. Even for technology that is difficult to understand. Research what you get for the price you are paying. Do this for cell phone service. Then move onto Internet service, cable and all your insurance coverage. You will be pleasantly surprised at how much money is saved.

Steve Doster is a Certified Financial Planner™ professional providing commission-free financial advice for do-it-yourself investors. You can reach Steve at Doster Financial Planning by phone 619-688-1192 or email steve@dosterfinancialplanning.com. You can also follow Steve on Facebook, Linked In, Twitter, or blog to get more personal finance advice and tips.

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Posted by on Jan 30, 2014. Filed under Bottom Highlights, The Money Shot. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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