How do I save money on a cell phone plan?

save money on a cell phone

How do I save money on a cell phone plan?

How someone can save money on a cell phone plan is a topic comes up a lot at work actually. Just about everyone has a cell phone plan and pretty well everyone I know has a data plan with it. These can get expensive, especially if you’re adding multiple gigabytes of data to your plan.  So how do you save money on a cell phone plan? I’ll tell you how I’m doing it.

Back in 2013 when my Blackberry Torch(I know, shameful but I loved the idea of the physical keyboards) started to act up I knew I’d have to get a new phone by the end of its contract term.  Needless to say the Torch was a bit of a disappointment after seeing the phones that came out only a few months after its release.  Although it was great to have a decent camera at all times and access to my email and an easy way to type notes or schedule my days, it froze much too often and was lacking in internet browsing speed.

For my next phone I had to do a lot of research into Android phones, I ruled out iPhones pretty early due to their cost, I did not want to pay $300+ dollars to be locked into a 3 year contract with a phone.  I also don’t own any apple products, so the “synergy” wouldn’t be there with my other devices.

Before buying a new phone, my service provider called and made the usual sales pitch about upgrading my phone since the term was ending.  I told them I’d be keeping my current phone and would like to continue on a month to month basis.  They immediately dropped $20 each month off my plan price because I now owned the phone. Fantastic!

At the time most Canadian cellphone plans were for 3 years, you could get shorter terms, but the phone prices were much higher on the shorter terms.  I decided with the new $20 discount of owning a phone on the month to month plan I could probably purchase one outright and save money in the long run.  So my search now narrowed to phones under 36 months x $20 = $720.

I ended up going with the Nexus 5 phone over phones for mainly one reason, the price. The Nexus 5 was entering the market at an incredibly cheap $299 for the 16 gigabyte version. I went for the 32 gigabyte version at $399, since there was no expandable memory and I had planned on using this for music and my primary camera.  It ended up being more money up front for the phone than going on a contract, but now I wasn’t locked into a contract and it would eventually pay for itself.

You can see from the table below, it still has a break even period of 21.8 months.  I have only included the base price of the phone plan and data in these calculations, the additional monthly or network fees would be the same no matter which plan was chosen.

save money on a cell phone

Break even evaluation

I’ll be making money off my cell phone plan in just a few months from now.  I’m hoping to keep the phone for at least another year after it has paid for itself. Anything more than August 2015 and it was worth it, but the longer I stretch that out the better return I’ll get on the phone.  Not that the phone was an investment, merely just a purchase inspired through frugality.

What does your plan entail? Couldn’t you just make your cell phone plan cheaper by dropping options?

My plan is an unlimited nationwide talk and text package for $35/month and I have 2 gigabytes of data on top of that for another $20/month.  I lucked out on the data; there was a 2 for 1 deal going on where they doubled the data on your plan. I am paying the price you would pay for 1 gigabyte on most major carriers.

save money on a cell phoneYou could certainly reduce your plan costs by taking a smaller plan if that suits your budget. I know people that go with pay as you go plans for only a few dollars each month and they only use data when connected to Wi-Fi, which is readily available in most places now. I unfortunately can’t take this route, my cellphone is also my work phone and I am on it for usually an hour each day, which ends up being about 1800 minutes a month, this is for work only. I also live in Alberta and most of my family is on the east coast of Canada, so I usually end up with a few hundred long distance minutes each month as well.  The extra $5-10 for the unlimited plan is definitely worth it for me.

As for the data, I could certainly drop that down to the 500megabyte plan each month. I am required to have data on my phone for work emails. These haven’t exceeded 200 megabytes in a month so the 500mb would be sufficient, but for an extra $5 each month I am getting 4 times that much data and sometimes I’m in places where there’s no Wi-Fi and I do like to kill time on social media and playing games on my phone.

For the average person that doesn’t talk a lot on their phone I would certainly recommend looking into the pay as you go options. If you’re in a major city’s downtown core or a university student there will probably be wifi access all around you and you could certainly cut out the data portion of your plan. Also don’t forget to look into the lower cost carriers like Wind, Mobilicity, and others, they’re trying to steal you away from the big 3 and usually offer better pricing, sometimes the coverage is lacking but if you stick to major cities  there shouldn’t be an issue.

If you’re lucky enough to have work requirements for a phone and receive a monthly allowance to cover this,I wouldn’t share this with your friends. The more everyone else pays in cell phone plans, the more companies will increase our allowances to match the “average” cell phone plan and the more we can save each month from it! Currently my company pays up to $75 per month for these plans, of which I can save and additional $20 each month, so thanks to all you heavy cell phone users out there!


  • Great Post. Our plan is currently with straight talk for 45 buck a month per phone. Unlimited everything. Its is a pre-pay plan but if we pay by the year we get one free month of service on both plans.

  • I love saving money on phone stuff. I also use mine mainly for work purposes, but I find much pleasure reducing the bill any way I can. I use Cricket and pay $35/ month on a month-to-month plan. Randomly throughout the year, Cricket will have specials on gift cards, so I actually bought a bunch of $50 cards that were 20% #winning. Also, having a phone unlocked makes traveling internationally a breeze. Just pop out the current SIM card and pop in the local SIM card wherever you are. I am based in the USA so most major phone carriers keep you on a locked contract making this not possible. Just another bonus for buying your phone outright.
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