Small Changes Add Up - Cell Phone Bill Edition

As is usual for the holiday season, I’ve been interacting with family members that I don’t typically see the rest of the year.  This never fails to present opportunities for a more typical spending perspective to contrast our own preference for financial independence.  So, let’s explore what that mindset looks like in practice.

A family member who we’ll call Sue was complaining about the high cost of cell phones today, sharing that her bill is close to $300 a month for her, her husband, and one phone that is shared between their two children.  It’s fairly easy to see why Sue’s bill is so expensive when pricing out an example service plan on Verizon’s website:

• Unlimited Plus $65 / line x 3 lines

• 3 new iPhone 16 Pro phones $5/line (locked in for 36 months)

• Disney+/Hulu/HBO $10

• Netflix $10

• YouTube Premium $30

• Taxes & fees $5 / line x 3 lines

For a grand total of $275.  I agree with her, that sure seems like an awful lot of money to be paying for mobile phone service!

So let’s set up a few sample options if my wife and I were starting from scratch today.  For reference, here’s what a typical Verizon Postpaid plan might look like for the two of us:

Option 0: Verizon Postpaid Sample

• Unlimited Plus $70 / line x 2 lines

• 2 new iPhone 16 Pro phones $5 / line (locked in for 36 months)

• Disney+/Hulu/HBO $10

• Netflix $10

• YouTube Premium $10 / line x 2 lines

• Taxes & fees $5 / line x 2 lines

For a grand total of $200 per month.  Let’s see if I can cut this down.  I’ve heard that prepaid plans are cheaper, so let’s try to get the same features as above but on Verizon Prepaid.

Option 1: Verizon Prepaid, 2 Financed iPhone Pro, Netflix, Disney+, and YouTube

• $35/line unlimited minutes/texts and 15GB of data, plus approximately $3/line in taxes/fees

• $85 2x iPhone 16 Pro financed through 25% interest credit card, paid off in 36 months

• $6.99 Netflix

• $16.99 Disney+/Hulu/HBO

• $22.99 YouTube Premium Family

For a grand total of…$207.97.  Wait a minute, that’s even MORE expensive!  If you do want all of the bells and whistles of the postpaid plan, it’s a good value because of the massive discount on financing compared to other options like a credit card.  But what if we’re willing to give up a little to save some money?

Option 2: Verizon Prepaid, 2 Financed iPhone 16, One Streaming Service Bundle

• $35/line unlimited minutes/texts and 15GB of data, plus approximately $3/line in taxes/fees

• $85 2x iPhone 16 financed through 25% interest credit card, paid off in 36 months

• $16.99 Disney+/Hulu/HBO

For a total of $177.99.  $22 a month is a good start, but let’s keep chipping away at this bill.

Option 3: Verizon Prepaid, 2 Financed iPhone SE3, One Streaming Service Bundle

• $35/line unlimited minutes/texts and 15GB of data, plus approximately $3/line in taxes/fees

• $36 2x iPhone SE 3 financed through 25% credit card, paid off in 36 months

• $16.99 Disney+/Hulu/HBO

This total comes to $128.99.  Now we’re starting to make some progress!

I’m sure by now some readers will say “who would finance that much on a credit card at 25% interest? That’s insane!”  So, let’s say that instead I were to pay cash for new phones.

Option 4: Verizon Prepaid, 3 Purchased iPhone SE3, One Streaming Service Bundle

• $927 upfront cost for 2x iPhone SE3

• $35/line unlimited minutes/texts and 15GB of data, plus approximately $3/line in taxes/fees

• $16.99 Disney+/Hulu/HBO

Now the monthly payment is down to $92.99.  But what if I didn’t want to shell out nearly $1000 for phones up front?

Option 5: Verizon Prepaid, 3 Purchased (used) iPhone SE3, One Streaming Service Bundle

• $350 upfront cost for 2 used iPhone SE3

• Same monthly costs as option 4.

Wait, that can’t be a real price for 2 current-model phones…can it?

I just purchased an iPhone SE 3 for my wife at a cost of $166.32.  I rounded up to $175 for the example above.  The device is in decent shape physically, has 100% of its battery life remaining, and even still has about half of the original warranty in case any issues do come up.  This phone is still on sale from Apple, so I expect it to have supported security updates for another 4-5 years.  I also plan to replace its battery around the 3 year mark to keep it running longer rather than purchase a new phone after 3 years.

Option 5 is approximately where my wife and I are today.  We’re on an older Verizon Prepaid plan with 5GB of data at $25/line for a grand total of $55.55 for our two lines.  Then, we have a separate bill of $22.99 for YouTube Premium.  Of course, we’re still looking to save more money if we can.  When I looked at our usage, I average 0.75GB per month of data usage, and my wife averages 0.65GB.  Turns out we just don’t use that much data when we’re connected to WiFi most places we go (home, work, library, family or friends’ houses).  Unfortunately, Verizon Prepaid’s smallest offering right now is 15GB of data per month, so let’s look at another Verizon company instead.

Option 6: Tracfone Prepaid, Keep Current Phones, One Streaming Service Bundle

• $15/line unlimited minutes/texts and 1GB of rollover data, plus approximately $3/line in taxes/fees

• $16.99 Disney+/Hulu/HBO

• Continue to use our old phones

Now we’re all the way down to $52.99 per month.  Even if I did stop at option 5 (where we currently stand), it’s over $100 per month of savings.  That adds up to around $18,000 over a 10 year period.  And most importantly, our day-to-day life doesn't change all that much.  Sure, our phones have one camera instead of three and have to be unlocked with a fingerprint rather than facial recognition.  And there’s a bit of administrative hassle when we decide to switch up streaming services (keep one for a while until we're bored with it, cancel, and sign up for something else).

But rather than think about what I’ve given up, I like to reframe these decisions to highlight what we still have:

• We each have our own pocket supercomputers.

• Which are connected to the largest collection of knowledge known to mankind.

• With a built-in camera that puts a point-and-shoot camera from only a few years ago to shame.

• And a never-ending library of entertainment content available at a click of a button.

Sounds like a pretty good deal to me!