Small Risks and Cell Phone Cost: Is a Cheap Cell Phone Plan Worth It?

Lately, I’ve been looking for ways to trim our monthly nut.  Our expenses are rather low on a monthly basis, but I’m all for making them even lower if I can.  One of the things that I’ve recently looked into is our cell phone.  H and I have been with verizon separately for about 9 years, and we’ve been on the same contract for about 3 years.  We both have smart phones, and I think at this point we’d both be pretty hard-pressed to give them up for different reasons, which is OK with me.  After reading kevin’s article and catching a story in the wall st journal, I really got to thinking more about our phones & our plan.

Our plan is ~150 per month for both phones, unlimited data, texts, and calls.  We’ve had our phones since January of 2010, and they run a very outdated version of android.  I’ve been able to keep them so long because of the DIY Manual Upgrade I wrote about a while back.  They still work just fine, but are starting to show their age as I’ve been having trouble upgrading my apps to the newest version, and it’s starting to seem slow.  This doesnt particularly bother me at all, but a new phone would be nice – I’m just hesitant to give up the unlimited data and get back on a contract just for no real reason.

In the Wall Street Journal Article, they note the biggest upside to the service (republic wireless): a $19/mo contract per phone.  They can provide a low monthly price for a handful of reasons:

  • They only offer 1 phone, and it’s old (though it is newer than the one H and I are currently using)
  • There’s an initial start up cost (1 time) Of 249, or $99 if you want to pay less upfront and $29/month
  • The phone operates on wi-fi when available, and when you’re not connected to a wireless network, it uses sprint’s network
  • Its only got 3g service for now, but expected to upgrade to 4g this summer with new/better phones as well

This is very appealing to me, as it’s a major downgrade in cost, still a newer phone and I have my phone on wi-fi all the time at my house and office anyway, which is where I spend the majority of my time.  I talked to H about it, and she didnt really ask many details about it but was pretty excited about the cost.

One of the downsides though, is that calls are occasionally dropped when transitioning from a wi-fi area to an area where you’d need to use sprint’s technology.  That could be kind of an annoyance, but it does automatically dial the person back and re-connect the call (both of which my phone currently does).  The network is the same as sprints, so you should have pretty good coverage nationwide.

Here’s why I have a bit of reservation about something like this though.

Earlier in January, I went elk hunting on a very cold day (high of 9 deg f )with my father in law out in our hunting area on laramie peak.  We checked an area where we’ve had success before and came up empty and decided to head back to the truck.  We were keeping our distance from each other (but still keeping each other in sight) and decided after a while to head back to the truck.  We had walkie talkies with us so it wasnt all that important to keep a line of sight, but we turned and headed back at our own pace.  On the way back, we got separated.  I just kept heading back the way I came to what I thought was familiar territory, expecting the truck to be visible as I crossed over the hill.  It was getting late (about 445 or so) and starting to get dark quickly.  Once I got to the top of the hill, I realized that I didnt know exactly where I was, nor did I know which direction I needed to head to get back to the truck.  I was lost, kind of hungry and it was dark and freezing out.  I tried the walkie talkie, but didnt get any response back from my father in law.  We were having similar problems in the morning where he could hear me, but I couldnt hear him.  I just thought there was something screwy with our range or some other interfering object, so I just wrote it off as a fluke at lunch.  Unfortunately, since he couldnt radio me back I had no way of knowing that he could hear me, or I would have told him my location.  Next option was my cell phone, which had been off all day to preserve battery in a spotty signal area.  I turned my phone on and hoped that it’d have enough juice to make a call and that I’d have service.  I got the call through, relayed a position, got some instructions “follow the power line west” and my phone died.

At this point, the temp was around 0 degrees, which sucked the small amount of juice I had out of my phone.  Realizing that my battery was probably not dead and just in fact very, very cold, I put my phone between my body and my base layer and headed off under the power lines.  It was plenty dark at this point, so I ate my frozen candy bar, a partially frozen banana and kept going.  After about 30 minutes, I tried my phone again and got ahold of my father in law and asked him to meet me where the power lines cross the main road, because I was pretty far south of the truck and thought that would be the fastest way out of there.

Immediately after that my phone died (again) because of the cold but he was there after about 15 minutes.  To make the evening more fun, the truck had a flat tire when he returned, and he didnt know where the stuff was to change it, so he drove it to me with a flat, that we then had to repair at about 730 pm.  At that point we were 40 miles from a town of about 100 people, and 80 miles from the nearest town of any notable size.

My phone was the only thing that saved my ass that night, so I’m not sure how ‘cute’ I want to get with the service.  The way I see it, a cell phone is one of those things that is a convenience 98% of the time, a hassle 1.5% of the time, and .5% of the time, you just need it to work properly and save your ass.

The question is, is paying an extra $1,320 per year worth that .5% of the time that it doesnt work?  That’s something that only you can decide for yourself.  Take into account the amount of times where you could could be in that .5% of needing a cell phone badly.  How often do those happen to you in a typical month?  quarter? year?  If the answer to that is “not that many” then you’ll probably be ok – but if the answer to that is either “a lot” or “I”m not sure”, know that you’re taking a calculated risk here, and as they say in the black swan, abnormal events are normal.

Readers:  How much is your cell phone plan?  Would you consider switching to something cheaper?  Have you ever found a time where having a cell phone has been a life saver?

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7 thoughts on “Small Risks and Cell Phone Cost: Is a Cheap Cell Phone Plan Worth It?”

  1. I see many people on blogs and budget forums struggle with this question. First of all—why haven’t you upgraded your phone with Verizon for FREE? Smartphones are elgible for free upgrades every year (used to be every two years–they changed it). You can get a band new top of the line phone for nothing. I recently just upgraded to a 32gb Samsung Nexus that was pre-owned certified and only paid $50.00. my husband got a free Samsung that was an older model. Last year I got a $50.00 Droid X that was pre-owned. We pay about the same as you do–about $150.00 a month for 2 smartphones and includes our home internet. Verizon has changed their plans quite a bit to where everything is shared by gigs. We use 4 gigs for our wi-fi, and smartphones and that is plenty, plus the unlimited everything. You should really get on Verizon’s website and see what they offer lately. Careful—they DO charge upgrade fees, which made me mad at first. But I don’t think it is that much considering you are getting a $500 phone for almost nothing.
    That being said, a LOT of people are moving towards Straight Talk, especially older people who are completely against the data plan but want a smartphone. It cost like $19.99 a month–I’m sure there are catches….but haven’t looked into it.
    In my personal opinion–it all depends what is important to you. I don’t need a landline, cable tv, Netflix, Hulu, or even a laptop, but no way will I ever give up my smartphone to save money. I don’t think I would switch to a lesser known company just to save some money unless I was desparate.

    • I havent upgraded mainly because there’s nothing wrong with my phone. Sure the OS is outdated (very, at this point) and all – but I’ve actually gone through verizons free upgrade (missed that) then they changed it to a $100 credit (missed that) then they changed it to a $50 credit where it is now. Typically, the brand new phones arent “Free” – they come with a 2 year contract extension, which is what i’ve mainly been trying to avoid. In addition, I havent been really wanting to give up my unlimited data (even though I never get above 2 gb).

      Thanks for the comment val.

  2. Yeah, I see my phone as something I use to make phone calls and nothing else. My husband and I share a plan, have a certain number of minutes a month, even fewer texts, and pay less than $70. Our phones are ancient (2007 – they’re not even smartphones). That service actually sounds intriguing to me – it offers more than we currently get for less money, potentially.

    • It offers about what I get for much, much less. Im on wifi all the time anyway at home, so its not like im costing my current carrier much.

  3. I was just looking at that exact service a few months ago. I’m not out of contract until May, so been biding my time. I have an AT&T plan and while it works, most of the stuff is grandfathered into the plan and a full upgrade would likely remove a ton of it and jump the monthly cost up about $10 (from $81). Of course, my problem is that I only use about 150-300 minutes a month (max), but I use about 300 or so SMS messages a month and average about 3-4GB of data a month. Part of the rest of the issue is that the phone I have is a complete lemon.

    With such little usage, a hybrid cellular plan like Republic’s is pretty enticing.

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