Contract Cutters

With all the talk of cord cutters over the past several years I have got to thinking about things we shell hundreds of dollars out for without really thining about if there is an alternative.  And I realized of all of my household bills, (internet, cable, electric, gas, insurance, cell phone, etc “excluding student loans”) my cell phone bill was the highest.  AT&T was getting $150/month of my money ($1,800/yr).

When i first assessed this, there wasn’t really all that much I could do, other than switch to a lesser carrier.  Then came the family plans.  I started to run the numbers on switching and realized that it would raise my bill by about $15/mo.  So I didn’t bother.

AT&T Next and Family Plans

A bit later yet, I decided to look into not doing the full 2 year contracts.  This is great, I can have even newer and newer models all the time.  Up to this point I have unlimited data on my device and my wife has 3GB/mo.  The family plan that looked like it would suite us would be the 10GB/mo shared (and a bonus, we get internet sharing, a feature I wanted but did not want to pay for).  At the end of the day I would be losing my unlimited, my wife would have more data, we would get internet sharing, but we would be paying ~$15/mo ($165/mo | $1,980/yr).

At the time I wasn’t really interested in any of the new models of phones.  My wife’s 920 was starting to age a bit but still in good shape, but overall we had no need to change devices.  And I started to look at my pricing options.

  1. Same old contract $40/phone – $100-20% = $80/mo + 2 phones($40ea) = $160/mo
  2. NEXT $15/phone (plus $5~$50 extra per phone) – $80/mo + 2 phones($15) = $110/mo + ($10-$100) $120-$220/mo
  3. Off Contract $15/phone – $80/mo + 2 phones($15) = $110/mo

Let’s Look at the Numbers by Life of Device/Contract

My current plan is to try to make devices last 3years (or more) and spend no more than $300 on the device.  So lets look at the number.  I’ll base my NEXT off of the most comparable option the 24mo (30 installments) with cheapest iphone6

  1. Off Contract – $110/mo x 36mos + $600($300/device) = $4,560 ($760/yr per line)
  2. Same Old – $160/mo x 36mos + $2($1/device avg) = $5,762 ($960/yr per line)
  3. NEXT – $140/mo x 30mos + ($110 6 remaining) = $4,860 ($810/yr per line)

Now the next can vary a bunch because you can, instead of paying the last 6 installments, give your phone back to AT&T (if it is in perfect condition).  Also that is an iphone 5c so prices can go way up from there.  The normal contract is more expensive than NEXT here because that 3rd year you are still paying $40/device even tho you are out of contract.  Even at it’s worst this saves me $100/year.  And realistically, our devices will last more than 3 years, we don’t spend $300 on them and I can repair many things myself or we have cheap backup devices.  Since we buy used/mid range deviced I priced the 2 yr contract + NEXT with last year models/cheaper devices.  If you bump up to current models that price goes up fast.  This does assume you do not upgrade at 24 or even 30 on the NEXT plan, if you do then obviously the price will go up.

Conclusion

Of course this isn’t for everyone.  Some people are perfectly happy paying a hefty price to make sure they have the latest and greatest.  That’s not me.  Also, I am not afraid to get on ebay/cl to pick up some used devices to use for parts when need be.  In fact, when my phone breaks I usually get it fixed for free or even make money selling the spare parts.  The whole point of the article is just that, now we have much more control in how much we pay for our cell phone bill.  You can drastically lower your bill without lessening your experience by much.  I simply buy used phones or just mid tier models rather than the premium devices.  I never have been one to need the most expensive of anything and luckily my wife likes saving money more than she likes showing off what her phone can do.