How much do you spend on your cell phone every month? I haven’t upgraded to a smart phone from my prepaid cell phone because I hate paying any kind of monthly fee. I’m missing out on the smart phone revolution, but I don’t think I really need it. I’ve been living with a “dumb” cell phone for 15 years and only a land line before that. I’m rarely away from my laptop long enough to need a smart phone. I also talk and text on my cell phone infrequently so a prepaid cell phone make sense for me. The majority of my calls are made from my home phone which is hook up to the Ooma voice over IP service and all local and long distance calls within the US are free. With my usage, it’s probably not that smart to upgrade to a smart phone.
Smart Phone Cost
Let’s take a look at how much it would cost to move to the Cadillac of smart phones – the iPhone 4S.
$299 Apple iPhone 4S – 32GB. We’ll go with AT&T since I have some of their stocks. I would probably pick the mid range model.
This phone comes with a 2-year contract.
$40 – cheapest calling plan with 450 minutes/month
$30 – 3GB data plan. I’m going with 3GB here instead of the cheapest 300MB plan. I’m sure once I got started, I would go over that limit pretty quickly.
$20 – unlimited text messaging. I use text messaging so this is needed.
Total cost = $299 + ($90*24 months) = $2,459
That’s a lot of money to spend on a cell phone. If you are struggling financially and your smart phone is not making you any income, then you should consider a dumb phone.
Currently I use Tracfone and spend less than $100 per year on my cell phone. With Tracfone, you just purchase the phone and then buy prepaid minutes for the phone. You don’t have bills or contracts so you won’t get any surprises at the end of the month. You can just get a new model when the phone stops working.
I purchased a Tracfone with triple minutes for life and that’s working out really well for me. Yesterday I purchased a 60 minutes card for $20, but I ended up with 240 minutes on my phone. I searched the internet for a Tracfone promo code and found one that gave me an extra 60 minutes on my purchase. (The code is 67861, but it probably won’t be valid for long.) This 240 minutes usually last me about 3 months.
If you don’t talk or text much, a prepaid plan is the way to go. It is also a good way to limit your kid’s cell phone usage. If I stay with Tracfone, I would spend about $200 over the next two years on my cell phone. That’s less than 10% of what the iPhone would cost me over two years.
If you need a smart phone for business, then it’s probably worth the cost. I don’t see how paying so much for a plan for personal use is wort it. What about you? Do you have a smart phone and is it worth the cost? Tell me why I should upgrade to a smart phone.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.