Cut Your Cell Phone Bill in Half With a No-Contract Phone

I don't know about you, but I like it when I can get the same thing for half the price. A year ago, I was paying $172/mo. to AT&T for my family's cell phone usage. Here's what it bought me:

*My iPhone Unlimited data, unlimited text, shared 700 minutes talk
*DD19 iPhone 300MB data, unlimited text, shared talk
*DS 17 cheap PAYG phone (because he had lost or broken his good ones) unlimited text & shared talk
*DS 15 (same as DS 17)
(Mr. D's phone is provided by his employer)

Every time I talked to AT&T about saving money on my phone plan, they told me I had the cheapest one I could do. What about lowering my data? "You never want to do that! You're grandfathered in our unlimited plan! You can't even get that plan now!"* And so it had gone ever since I had discovered that an iPhone was an indispensable tool in my back pocket five years ago. So what changed? In the summer of 2013, I discovered Mr. Money Mustache and found the Communications & Tech Superguide (Now Son of the Superguide)! A kind and patient fellow forum-er named IP Daley (who also must have a sense of potty humor!) posts excellent information on all things regarding communication. I won't rehash what he has to say, I suggest checking it out yourself. Ask Daley a question and he will be happy to help, although you might get a "face punch" MMM-style. Try not to take it personally, sometimes you gotta be cruel to be kind! In my case, I needed to lose the idea that I needed unlimited everything. Daley always says to use cell phones as a tool, and pay for what you use.

I wanted to write about my own journey with cell phones and MVNOs. And I'll share some tried and true advice. First, what is a MVNO?

Mobile virtual network operator
A mobile virtual network operator (MVNO), or mobile other licensed operator (MOLO) is a wireless communications services provider that does not own the wireless network infrastructure over which the MVNO provides services to its customers.

From my understanding, it is a cell phone middle man. Usually, a middle man makes the cost to the consumer go up, but in the case of cellular service, a middle man may save you a bundle. For example, I was on AT&T. I wanted to keep and use my same phones. This meant that I had to find an MVNO that uses AT&T towers/technology. Daley recommended Airvoice Wireless as having good plans, service, and track record. I was still worried about service and how this would all work, so I did a test run. My DD13 became a teenager and wanted to have a phone. She really wanted an iPhone (which AT&T won't let you have without a data plan), but didn't need data. She found a used iPhone 4 on a local classified site and used her birthday money to buy it. I ordered a sim card for $5 from airvoice. When it arrived, I got it set up and put her on the $10 plan which lets you send 500 texts or 250 minutes or a combination of both** for $10/mo. I would like to stop here to reiterate some advantages to Airvoice over AT&T:

1) You can use an out-of-contract smart phone without a data plan (using Wi-Fi only)

2) $10 is literally $10- no taxes, fees, and etc.

3) If you set up a plan with auto-billing, the money you haven't used rolls over to the next month. My now 14 year old DD is a super light user and has about $80 in her account. I would adjust to a different plan, but I know she may use more as she gets older.

So the test run with my DD was a success. I finally bit the bullet and ordered sim cards for the whole family and ported our numbers. I gave the kids the $10 plan each. The idea was to have them learn to use texting for conveying important (and whole) ideas.  This worked wonderfully for three of my kids. The fourth was too popular for his own good. He burned through $10 in less than a week. He put more of his money on his account and burned through that too. He's on an LDS mission now and not using a cell phone, but when he comes home, he'll have to get a bigger plan or curb his usage. For myself, I bought the $30 unlimited plan. Talk and text are unlimited, but data has a limit of 500MB. I don't have long distance on my home phone, so I wanted an unlimited plan. I also wanted a little bit of data for when I don't have wi-fi. So here are the new figures:

*My iPhone unlimited talk, text, 500 MB data $30

*Kids plans x 4 $10 each ($40 total)

Total each month $70- Savings $102/month or $1224/year ($2448 for an equivalent 2-yr contract period) And that's with one extra kid than with the AT&T plan!

What happens if my phone dies or drops in the toilet? Well, my phone has already become acquainted with the toilet- turn it off and put it in a bag of rice! We did that to a contractor's iphone 5 that fell from the second story down to a bucket of water. And both phones still work! But if your phone truly dies, make sure you have set aside a bit of the above savings to replace it. Daley isn't fond of iPhones, but I'm a fan and the great thing is that they keep making new models. That means older, but still great out-of-contract phones are available in the used market all the time. I'm not someone who needs the latest model, but you will save enough to buy it if you really want it. I also like that I'm making my kids responsible for their account. We provide a basic $10 plan. This is for OUR convenience, so that we can contact them when we need to. If they want to go beyond that, they can use their hard-earned $ instead of ours. 

So overall, the pros and cons:

Pros

-huge savings

-able to use smart phones without a data plan

-roll over of unused credit

-same AT&T coverage, phones

-no contract, walk away at any time

Cons

-kids' texting is limited (this is also a pro)

-$10 plan will give you a message each time you text or call with your new balance. Some find this mildly annoying.

-Only half of my data plan is loaded at a time. I have to "activate" my second half of data when the first runs out by calling Airvoice. This is a small inconvenience, but it also has a useful feature. This month, with all the Christmas shopping and price matching, I ran out of my first half of data in just a week and a half. That let me know that I need to be a bit more careful for the rest of the month. I set my cellular data to off, and will only turn it on when I really need it for the rest of the month. Normally, I don't use all my data, and I don't have to keep my data off like this.

-no "free" upgraded phones, but were they really free?!

In conclusion, I really like my MVNO, Airvoice Wireless and I'm staying with them. There are options for Sprint, Verizon, and T-Mobile users, as well. Again, check out the Superguide at the MMM forums! Here are some other recommended MVNO's from Daley's Superguide:
ATT- Airvoice, Pure Talk
Sprint- Ting, Virgin Mobile
Verizon- Page Plus
T-Mobile- P-tel, GoSmart
There may be other MVNO's with plans that work for you, do some research and find out what your options are. Remember, break out of the idea of "unlimited" and pay for what you need!

*Interestingly, I found out that I was using less that 1GB per month at AT&T. And that was when I wasn't being careful of data usage at all. It was hard to find out how much I was using, because my bill would list my usage in KB, which had to be converted to MB, and then converted again to GB. Nice, AT&T!

**There is a way to use data on this plan. It costs $.06/MB, a decent price for data. You have to call and get data enabled on your phone, which is not something I want for my kids, and therefore I pretend it doesn't exist. ;)

*** I have no affiliate links and get no bonus/commission from recommending any links on this page. This is just my opinion and recommendation hoping that it helps someone else.