I Don’t Make Phone Calls

The first iPhone I purchased was an iPhone 3G. That seems like forever ago, but at most it’s been 5 years.

Lately I’ve vowed to renew my frugal ways, after reading the Mr. Money Mustache blog, with the goal or “retiring” as soon as possible. After reviewing various bills, the AT&T bill stood out amount the crowd as quite ridiculous. And while I’m not quite ready to go through the hassle that likely accompanies the $10/month plan MMM went with, I am ready to hack our ridiculous $140/month AT&T bill down as much as possible.

Here’s the breakdown of our current crazy bill.  I’m “grandfathered” in on the iPhone unlimited data with AT&T so I have continued to pay the $30/month to hold tight to that privilege.  Though I don’t know why.

  • $60 – 700 “Family Talk” minutes.
  • $30 – Unlimited Text messaging.
  • $30 – Unlimited Data for iPhone (my grandfathered in plan)
  • – $18 – A “discount” I still get from 3M, where I no longer work.
  • $9.34 – Fees and other crap.
  • $111.34 – TOTAL – Randy
  • $28.21 – Wife’s phone on family plan + 250MB data for iPhone
  • $139.55 – TOTAL – Randy + Wife

Holy Shit.  $140/month for what? The privilege of carrying around an always connected device?  I’ll admit, it’s a lovely privilege and we live in the modern age of convenience, but it’s clear that AT&T has a stranglehold on me. Why have I been doing this for so long? I don’t  even talk on the phone. Why am I paying so much for a phone?

Here is a graph of our individual talk minutes monthly. I don’t make phone calls.

 

Screen Shot 2013-10-06 at 4.49.14 PMOn many occasions, I have tried to change my plan to something less expensive. Each time, I end up in a maze of options dependent on one another with no clear view of what the eventual total will be.

After discussing my dilemma openly in the office, a co-worker filled me in on the $30/month T-Mobile plan that he uses.  Sounded too good to be true. You can read a detailed CNET article about how to find/use it.

  • Unlimited Data
  • Unlimited Texting (I mostly use iMessage now though)
  • 100 Talk minutes
  • $30/month. No hidden crazy fees. Just $1.xx in taxes

This seemed like a no brainer for me.  I use, at most, 77 minutes a month (according to my recent history). I think that was a phone interview for my new job. In which case, if I went over, I’d be OK with it. Otherwise, my goal is somewhere between 0 and 1 minutes/month usage.

I love using data. I use various mapping apps while on the road, track my bike commuting, post pictures to Facebook while out and about with the kids. Unlimited data is a warm blanket. Though, reality shows that I don’t use much of that either, unless I’m not near a WiFi source, and that isn’t very often.

If I switch both of our phones to a $30 x 2/month plan ($60 total), we will save $140 – $60 every month.  That’s $80/month! And as Mr. Money Mustache likes to point out, if I put that $80 into an index fund, it will become something around $13,000 in 10 years. How did I come up with that number?  Find any compounding interest calculator and do the math.  But even without compounding interest, $80 x 12 months x 10 Years = $80 x 120 months = $9600.  I’d rather have either of those than pay AT&T lots of money for nothing.

Screen Shot 2013-10-06 at 4.49.27 PM

To stick with this, I am giving up one more privilege. The money you and I pay into most cell phone plans covers the subsidized cost of the fancy new phone we just bought. That’s why you renew a 2-year contract with each phone upgrade. To avoid this cost, I am not going to buy a fancy new phone. My current iPhone 4 is unlocked and off contract. I can move it to any plan I like. And I have. My number is now on T-Mobile. The coverage where I work/live is just fine, and I will be canceling my AT&T plan today.

I would like something newer than an iPhone 4, but I don’t need and iPhone 5S. I could probably find someone I know that is willing to sell their 4S or 5 at a reasonable price. The $80/month is savings will cover an older, unlocked $200 phone purchase in a little over 2 months.  Not 2 years!

If you recognize that part of your bill is to cover the device that’s being subsidized over 2 years, then realize that your contract has been up for 6 months, you may come to the conclusion that you are paying extra money to subsidize… what? Nothing. You’re simply giving the carrier cash because they have no motivation to lower your bill once you’ve reimbursed them for helping you buy your device in the first place. I am certainly guilty of this mistake.

So, I am dedicated to finding a solution and this T-Mobile plan seems like a step in the right direction.

We may have to figure out how to get my wife under 100 talk minutes before she switches. I am not sure if T-Mobile’s plan has unlimited “nights & weekends” and I believe that’s when most of her conversations take place. My wife makes most of her phone calls while at home, so we may be able to leverage other services, like google-voice, that still allow free phone calls. But I don’t want to make life too complex for her, so the next step is to determine if there are other plans that fit her usage scenario better.

Is a plan like this right for you? Obviously you’ll have to figure that out. Is it worth looking into? I don’t know, how does $13 grand sound to you?