Can You Save Money by Ditching Your Cell Phone Contract Plan?

Break Down Your Cell Phone Plan

Find ways to save on your cell phone plan.
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Cell phones are a part of every day life. Nearly everyone has a cell phone, but not all of the plans are created equal. If you are looking for ways to save money, you may want to consider how you are managing your cell phone plan and see if there are more affordable plans available for your situation. If you are creative, you may be able to get your bill down even more.

Contract Plans

The contract plans often give you a discount on a phone or a free phone every few years.

This means the cost of your cell phone is subsidized, but you may be actually paying for the phone itself by the amount that you pay for the contract. There are plans that offer discounts for more people signed up with them. You can go in with friend and family to lower your monthly bill, but it can be tricky to manage data that is shared. Once you get a phone you are locked into the contract with that company. It can be expensive to buy out the contract to switch to a different carrier, and you may have a difficult time getting by on the lowest cost plans available.


  • Cost of phone is subsidized


  • Contract
  • Difficult balancing data and other expenses

Monthly Plans

A monthly plan is offered by a wide number of carriers. In fact several of the major providers will offer both a contract and a monthly option.  It is important to carefully read the rules of each monthly plan to understand the number of texts, the number of minutes and the amount of data that you can use without being charged.

The cost of these plans can vary widely and run around from around $50.00 a month with well known carriers to about $12.00 a month with lesser known carriers. The most expensive aspect of this is that you need to purchase the phone yourself. However, you can downplay the effects of this by shopping for a used phone online.


  • Lower monthly bills
  • No contract if you need to cancel service


  • You must purchase your own phone
  • Coverage may not be as reliable

A Side-by-Side Comparison

Look at a break down the costs of the plans that are being offered by two different carriers. For this example, we will use the Moto X phone, because it is offered by both carriers and makes the breakdown easier to manage. To make a fair comparison, we will look at the total time of cost of the contract period for the contract plan. You can do a similar side-by-side comparison with other phones and providers.

Verizon Individual Monthly Plan with a Contract

Cost of the Phone:  $0.00

Monthly Cost with 2 GB of Data $60.00 ($15.00 per 1 Gig if you go over)

Total Cost for Two Years $1440.00

Republic Wireless (No Contract)

Cost of the Phone:  $299.00

Monthly Cost with Unlimited Data: $25.00

Total Cost for Two Years: $899.00

The total savings for choosing to pay for your phone upfront is $541.00. Now the savings overall can change based on the phone that you purchase, and the providers that you choose to go with. The savings may not be as significant if you have a family plan that lowers the rates, or it may be even more than that if you have multiple people on plans.

It is important to realize that there are several options available to you, and that you can shop around to compare plans and costs of different phones.  It does take time to make the comparisons, but the overall savings for your individual needs will make it worth it. When you are in a situation where you need to cut your bills, this may be a great option. It is also nice to not have to worry about a contract, which gives you more flexibility to cut services as needed if you were to lose a job or have unexpected expenses you need to cover.