Most of us can’t do without a phone. It’s a connected world and having a phone in your pocket everywhere you go is just the way it is these days. Unfortunately, connectivity costs money. If you have a phone that does more than make calls there’s a good chance you’re spending more money on added data plans, text messages, and more. An even bigger money drain is when you have mobile phones and a traditional land line. A lot of people have started making the transition to become a mobile only household, but for a number of reasons a land line may still be important which is going to add to your total cost.
This topic came up because my wife and I just recently updated our phones and the financial implications were two-fold. First of all, we had to buy new phones which was an initial investment. But in the end we were combining our service with one company so it ultimately works out to a savings each month. As you might expect, since my work completely revolves around being online it’s very helpful to have a phone that allows the kind of internet connectivity that can make my life easier. Being able to quickly respond to emails, approve a comment, and share sites on social media. So, that means sticking to a smart phone. I had a BlackBerry before and while it was great, it just felt a little old-fashioned given some of the technology out there today.
So, that led us to the new HTC Incredible. An amazing phone to say the least and it’s leaps and bounds ahead of my BlackBerry. The problem is, they run $199 each. Ouch. That’s a pretty steep investment just to have a fancier phone, but it won’t be as bad as it looks. I can sell both of our BlackBerries on eBay and probably make about $150-$200. So, it should end up like we only had to buy one new phone. But the best part is the monthly savings by combining plans. Before, my wife and I were on different networks so we had two separate plans. It was king of ridiculous and our total bill each month approached $200. By both being on Verizon and getting a family plan we now get even more features and pay about $40 less each month. That is fairly significant as that’s nearly a $500 savings over a year. So, even though we invested in expensive new phones it will pay for itself in just six months and from there the savings will continue to pile on.
How does that stack up against others? I was curious to see what people spend on phone service so I pulled up the most recent spending data on Bundle. It looks like the national average is $108/month with the biggest spenders dropping $235/month.
I played with the data a bit and was looking at what the difference is for married households and they obviously have a higher average, but only at $125. So, given the numbers I guess our phone spending isn’t far from the average. I guess if we had Vonage or another land line we’d probably have to tack on another $30-$50 a month which would put the numbers pretty high.
What do you spend each month for phone service? Do you feel it’s comparable to others? Let’s hear it. Have you ditched your land line? Are you dropping big bucks on an unlimited iPhone plan or do you get by with the bare minimum voice plan?
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.