Nov 15, 2009

Cell Phone Savings

Dar and I used to have two Verizon phones under a "family share plan". It was the least costly family plan available which came to about $85 per month after taxes and other fees. For that we got 700 minutes "anytime" minutes, free nights and weekends, and the usual stuff that comes with a cell phone plan these days. Because we try to bunch calls to family and friends on the weekends, the number of "anytime" minutes we used in a month was usually in the 300 to 400 minute range.

One day we talked about whether we could get by with only one phone. Since we're usually together anyway a single phone would serve our purposes just fine the majority of the time. But there are times when we're apart and it's handy for each of us to have a phone along -- for safety, convenience, and to have the ability to reach each other. That second phone is something we decided was too important to give up.

But what if we modified this single phone idea? We could make one of our existing phones our main phone. That would be the number we'd make sure all our family and friends used, the number that would be on our accounts, the only number that we would ever expect an inbound call on. For all intents and purposes, at least to the outside world, it's the only phone we have. But to solve the second phone issue, we could buy a prepaid phone, like a Tracfone or one of the other no-contract prepaid phones that are increasingly popular these days.

Prepaid phones work like this: you buy a phone and then you buy minutes. The minutes you buy will expire if not used within a period of time that varies with the plan. Usually, as long as you purchase more minutes before the old ones expire, those old minutes will be extended to the expiration date of the new minutes. In order to determine if any of these prepaid plans work for you, it's necessary to make some assumptions and do some math.

We decided to buy a Tracfone. For about $120, we walked out of the store with a phone and 900 minutes that need to be used in a year. Some basic math tells us that for $10/month, we can use this phone an average of 75 minutes each month. Because usage is concentrated on our primary phone, after 5 months of having the Tracfone actual usage is averaging 40 minutes per month. Except when we're apart, the Tracfone is turned off. No one besides Dar & I have the number anyway. As for cell coverage, we've had no problem at all -- the phone connects to a network every place we've needed it.

The rest of the story is that we were able to drop our Verizon phone plan from $85 for two phones to just $45 for one. The new single phone plan gives us 450 "anytime" minutes and has the same free nights and weekends -- which we haven't come close to exceeding after 5 months.

The net result is that we're now saving $30 every month from what we used to spend on cell phones -- a savings of 35%. And as far as we're concerned, there is no change to our service level or ability to communicate with the outside world.

Wondering who to call next...
Thom Hoch

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