Shrink Your Cell Phone Bill

Money-Saving Tips 1-3

Talk isn't cheap, especially on cell phones. The average monthly mobile bill runs about $48 per month -- or $588 a year, according to CTIA The Wireless Association. But to keep business in these tough economic times, wireless carriers are scrambling to offer sweeter deals and help customers pick cost-effective plans. "Cell phone companies only advertise their newest plans, but cheaper ones are still available," says Jeff Kagan, a telecom industry analyst in Atlanta. "You just have to ask for the plan that matches your habits and budget."

If you research the options and do the math, you can slash hundreds of dollars off your cell phone bill annually. We found 13 ways to make it happen.

1. Manage your minutes
If you blab beyond your voice-plan's minute maximum, you'll be slammed with high fees -- from 5 to 45 cents per extra minute. Stay under the limit and you'll flush cash away on unused airtime. To break this bad cycle, review six months of past cellular statements and figure out your chat profile -- how many minutes you typically talk (not counting weekends and evenings if you get unlimited minutes then). Once you know, switch to a better deal. Talkaholics should consider AT&T's 900-minute Nation Plan with Rollover Minutes for $60 per month (includes unlimited nights and weekend minutes); moderate talkers should look into T-Mobile's 300-minute myFaves 300 Plan (includes unlimited weekend minutes) for $40 per month or AT&T's 450-minute Nation Plan with Rollover Minutes for $40 per month (which includes 5,000 free night and weekend minutes); and light talkers might want to consider ditching a multiyear contract plan entirely (see the next tip).

2. Get a prepaid plan
Why commit to a carrier and be on the hook for hundreds of unneeded minutes when you can buy a basic phone for $20 to $100 and then pay only for the minutes you need -- when you need them? If you're an infrequent caller -- or you have a cell phone to use in emergencies only -- you might like a prepaid voice-only (no-texting) plan from TracFone, which operates on the AT&T network, or Virgin Mobile, which uses Sprint's. TracFone's 50-Minute Value Plan ($10) and 100-Minute Value Plan ($20) have no contract obligation, but you must add money to your account periodically to maintain service. Virgin Mobile charges $20 for a 200-minute pack (10 cents per minute); $30 for a 400-minute pack (7.5 cents per minute); and $50 for a 1,000-minute pack (5 cents per minute). Yes, the cost-per-minute is higher with a prepaid plan than with a contract, but you'll end up spending less over the long haul because you're not throwing money away on unused minutes.

3. Pick a local service
If you mostly make short local calls and don't need long distance (or access from mountaintops), check out small wireless carriers. For example, Metro PCS offers unlimited local calling from $30 per month for a prepaid plan, but its coverage is limited to select areas nationwide, including Atlanta; Detroit; Ocean City, New Jersey; Waco, Texas; Nashua, New Hampshire; and multiple cities in California and Florida (metropcs.com/coverage).

Money-Saving Tips 4-8

4. Go month to month or day to day
If you are a heavy phone user but don't want to be tied down to a monthly contract or risk paying steep cancellation fees, a prepaid service with unlimited calling plans may be for you. Boost Mobile has rolled out a prepaid plan with unlimited calling, texting, and Web use for $50 a month. The caveat is that you must purchase a Boost phone (prices start at $30). And Verizon just added several new prepaid plans, including the Prepaid Unlimited Talk plan, which offers unlimited calling during peak hours for $3.99 per day only on days you make or receive calls.

5. Combine your lines
Most carriers now offer "family plans," so parents with children can choose the number of monthly minutes to share as a family and spend a lot less than it would cost to buy separate service contracts for every household member. There's a two-line minimum; carriers charge about $10 per month for extra lines (up to five max).

6. Don't give out your number randomly
Exercise restraint with your cell phone number; pass it only to people you truly need to hear from. And where you can, encourage friends not to call your cell if you've limited your minutes.

7. Return to the basics
Classic rock ring tones are fun and it's convenient to have e-mail, GPS, and stock quotes at your fingertips. But ring tones can cost $3 each; GPS often runs $10 per month. Do you really need all those features on your cell phone? Review recent bills to determine exactly what you're paying for and ditch unnecessary extras.

8. Bundle data services
Texts and e-mail may cost 15 to 25 cents to send or receive if you're paying for each individually. So if you text and Net-surf a lot, why not choose a higher-priced plan that includes unlimited messaging and Internet access rather than paying a la carte? The price can drop to as little as a penny per text when you pick a multimedia bundle -- about $5 a month for 400 messages from T-Mobile.

Money-Saving Tips 9-13

9. Sell your contract
If you find a cheaper cell phone plan and want to opt out of a pricey multiyear contract, avoid the $150 to $200 early-termination fee by transferring the balance of your plan to someone else. Celltradeusa.com and cellswapper.com charge from $18 to $25 to match sellers and buyers.

10. Start a calling circle
Save minutes (time is money!) with special deals. AT&T and Verizon let you make free calls to other customers who use the same service; T-Mobile's myFaves plan offers free calls to the five people you dial the most, regardless of which mobile carrier they use.

11. Curb your kids' cell phone use
For $5 a month the AT&T Smart Limits for Wireless service lets you control the numbers kids can call and text. You can block certain numbers as well as choose the times of day a child can make outgoing calls. But you can't use the service to set specific monthly limits for minutes -- yet.

12. Opt for a new phone every two years
Pay attention to the date your service contract comes up for renewal and get that new free phone you've been promised -- even if you love the one you already have. Since your monthly charges factor in the cost of the new phone, why not keep up with the latest technology? To donate an old phone, check out cellphonesforsoldiers.com.

13. Put yourself on the "Do Not Call" registry
Telemarketers' calls eat up minutes, waste your time, and drive up costs, so register your cell phone number to block them out (donotcall.gov).

Originally published in Ladies' Home Journal, June 2009.