Tip #5: Optimize your cellphone bill

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This is tip #5 of the Save $1,000 in 30 Days Challenge.

Today’s tip is to optimize your cellphone bill. Many of us (including me) pick a cellphone plan, then never check to see if it’s the right one for us based on our usage. Because the average cellphone bill is about $50, that’s $600 per year of money you can optimize. Perfect.

angry-cellphone-kid.jpg
Today, I’m going to show you two ways to cut your cellphone bill: one easy, one hard. And remember, this tip doesn’t just apply to cellphones: You can optimize your spending on nearly any other subscription you’ve got.

Optimizing your cellphone bill — the easy way
First let me say, if you still have a landline, the easiest tip is to call your wireless company and bundle it all into one plan — or get rid of your landline altogether.

Anyway, when I went to buy a new cellphone a couple months ago, I picked the unlimited everything plan — unlimited voice, unlimited data, unlimited text. I also set a 3-month check-in on my calendar to go back and analyze my spending patterns so I could cut back on my plan if needed. This is a technique I use a lot: With any usage-based services (e.g., web apps or cell plans), I’ll pay a little more up front so I can monitor my usage, then downgrade to the appropriate plan after 3 months.

You should also know that, according to a recent survey by J.D. Power and Associates, “people who text message, e-mail, and download files on mobile phones spend $14 a month more than people who don’t.” Do you really need all that stuff? Could you try going a couple months without it?

It pays to look at your actual usage and switch to a plan that better fits your needs. If you’re only using 150 text messages, you can probably downgrade to the “200 text messages/month” plan. As you get used to the new limit, add a calendar reminder to check in on the 15th of each month and make sure you’re not wildly over for the first few months.

Optimizing your cellphone — the harder (but more rewarding) way
Cellphone companies have this wildly curious business model of acquiring tons of customers through very expensive means (e.g., national advertising), then churning through them by treating them horribly. Yet even they know that it’s cheaper to retain an existing customer than to acquire a new one. You can use this “customer acquisition cost” in your favor. Here’s how:

1. Find comparable plans for your usage on other cellphone networks. For example, I’m with AT&T, so I’ll investigate Verizon, T-Mobile, and Sprint by going to their websites. Write down how much they each cost, how many minutes you get, and any other benefits.
2. Call your current cellphone company. To make it easy, here are the phone numbers:

AT&T: 1-800-331-0500
Verizon: 1-800-922-0204
TMobile: 1-800-T-MOBILE
Sprint: 1-866-866-7509

3. First, be nice. Ask them what better plans they have to offer you.

You: “Hi, I was looking at my plan and it’s getting pretty expensive. Could you tell me what other plans you have that would save me money?”
Them: Blah blah same plans as on the website blah blah
You: “What about any plans not listed on the website?”
Them: No, what we have is listed on the website. Plus, you’re on a contract and have an early cancellation fee of $XXX
You: “Well, I understand that, but I’d be saving $XXX even with that cancellation fee. Look, you know times are tough so I’m thinking of switching to [COMPETITOR COMPANY]. Unless there are any other plans you have…? No? Ok, can you switch me to your cancellation department, please?”

Note: What you really want is to be switched to their “customer retention” department, which is the group that has the ability to retain you by giving you a bunch of free deals. You can either ask to be switched directly to the customer retention department, or play a game and hope that by asking for “cancellation,” you’re actually transferred to retention. Play around with a few phone calls and see what works best.

When you get to the customer-retention department, ask for the same thing. This is when you pull out your competitive intel on the other services being offered. If Verizon is offering something for $10 less, tell them that. That’s $120 savings / year right there. But you can do more.

You: “Listen, you know times are tough and I need to get a better deal to stick with you guys. You know and I know that your customer acquisition cost is hundreds of dollars. It just makes sense to keep me as a customer, so what can you do to offer me this plan for less money?”

Notice that you didn’t say, “Can you give me a cheaper plan?” because yes/no questions always get a “no” answer when speaking to wireless customer-service reps. Ask leading questions. You also invoked the customer-acquisition cost, which is meaningful to retention reps. Finally, it really helps if you’re a valued customer who’s stuck around for a long time and actually deserves to be treated well. If you jump around from carrier to carrier, you’re not a worthwhile customer to carriers.

One final thing: People get scared that if they go to the cancellation department and try to negotiate, they’ll get their account canceled without really wanting to do that. There are two things to remember about negotiating your wireless bill: (1) You have a MUCH stronger position if you’re actually willing to walk away and switch to another plan, and (2) your account will never get canceled until you say the final word. You can negotiate for 3 hours and walk away if you want.

Use this technique on virtually any subscription you’re paying. Businesses want to keep customers and are willing to negotiate — but since most people don’t, they’re leaving money on the table.

Total savings: $20-$600

* * *
Additional links
Threatening To Cancel Saves Man $65.52 On AT&T Phone Bill

* * *
Last thing to do
1. Leave a comment on this post describing how much you’re saving with this tip. People have already saved thousands of dollars taking the 30 Day Challenge.
2. Want to submit your own savings tip? Submit a money tip here.

If you liked this tip, check out my Premium tips — one long, tactical tip per week. Save money or get a 100% refund.

scrooge

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105 Comments

 
  1. This is the first tip that i think might save us, however its not quite as much as what it states. My husband and I together will save $15 by this as what we are doing is dropping the internet, but adding texting onto his phone. (Internet is 20, texting is 5) – our cellphone plan is already pretty optimized – we have a family plan, and the plan itself w/out the texting and internet extras is $60 for both of us. They dont even offer that plan anymore (their current family rate structures have more monthly minutes, but costs more)

    As for the other tips, we already followed all of those, so I haven’t seen anything large from them. We are in the process of selling items on craigslist, however we were doing that before (we have a huge glut of items from when we joined households) so i dont know if it counts towards these overall savings. (on top of that, nothing has actually sold since we started following these tips).

  2. I did this a couple of years ago. I bundled my Cable, landline and broadband internet to save $30 a month, with unlimited local and long distance on the landline.

    I waited for my cell contract to expire, then I went to prepaid phones. I was paying $100 per month for 2 phones before. I’m paying on average on prepaid phones $20 per month.

    Keep the tips coming Ramit, they are great for those who aren’t already practicing them.

  3. Alright, this is a tip that I am going to really get into. I have three lines on one plan and the 2 year contract is up in December. So the timing is perfect for me to do a bit of checking and negotiating.

  4. Rob – which provider did you go with? I’m moving to another state and our Verizon plan is past the two year contract and on a month to month basis. I’m considering picking up pay as you go for at least my phone, since I never use it, but maybe even both phones. Do you like the new service? What state are you in?

  5. This is an excellent tip, Ramit. Your negotiation strategy is insightful. Nice job. I am already practicing the other suggestions, but it is always good to hear them again so you remain consistent. You are doing a great job on this project. Keep it up.

  6. So I’ve printed out two plans that I think will save me 245 to 159 a year. I’m going to stop by AT&T during my break to discuss the plans with my sales rep. I always ask for the gentleman who signed me up we are on a first name bases. I feel like I get better customer service by always requesting the same rep if he’s not there some one else is sure to take care of me well because if not they know I will discus it with my regular rep. I currently save about 19% because they give my company an employee discount. I thought I had already brought down my bill as low as possible and I hope billshrink.com proves me wrong. I’ll let you guys know how it goes.

  7. I think that this is a really good idea. I have a really fiesty mother. When I was younger, she used to call cell phone customer service lines and cause so much fuss that they would give her unbelievable deals. She has been getting unlimited conversation for $99 four years ago. This is a more formal technique that I will definitely abide by. Thanks for the tip.

    Caleb
    http://www.mefinanciallyfree.blogspot.com

  8. I just called AT&T and got on the cheaper rate plan for seniors which will save me $10/month. Not half bad considering I really didn’t want to cancel the account.

  9. I was paying 50.00 a month for a cell phone that I rarely used because everyone called me at home or at work. After my contract was up with TMobile, I stayed with them but went to the prepaid plan. It has saved me hundreds of dollars. Once you reach the 100.00 mark on the plan you become a gold member and never lose any unused minutes plus every time you add minutes they give you 15% more as a bonus. I only add minutes when I’m almost out and so I spend less than 10.00 a month. I realize this plan isn’t for everyone but for people who don’t text and really just want a phone for emergencies and convenience, this is a great plan that will save you money.

  10. Oh yeah and I should mention I’m not a senior, they say the rate plan is for seniors but when I was on the line with the cancellation people they gave it to me when I asked. The first line people would not.

  11. I was going to see if I could downgrade our plan since we have 8,000 rollover minutes when I noticed AT&T’s policy:

    “The following conditions would cause you to forfeit your Rollover minutes:
    Changing to a new Rollover plan where your existing Rollover balance exceeds the Anytime minutes of the new plan. Only minutes in excess of the Anytime minutes in the new plan are forfeited. This will take effect at the end of the billing cycle. ”

    I’ll still try and negotiate with them.

  12. I went with the pre paid. Trac fone we really didn’t use that much airtime and were paying a ton. The negotiation insight is always good. In the current economy more than ever don’t accept that things have to be set in stone.
    I never wanted to be the ugly negotiator, wound up having to in a few situation but, later found Ramit’s approach easier for me to live with myself and get better deals.
    Super stuff, should be applied in as many situations as possible.

  13. Nice tip!

    I’ve already done it over a year ago. I went from a $50+ / month bill to a $30 / month bill (which includes more bells and whistles even).

    My plan is no longer available or I’d share it here. Fortunately my plan is grandfathered in so I can still afford unlimited text, unlimited data usage, etc.

    I cut my land line too.

    So in regards to the tips my cumulative savings is still at $0.

    However I can pretend I changed my cell plan today instead of last year, that would make my savings of $20. I also have things on eBay so hopefully that savings will increase.

    Keep the tips coming! :)

  14. I just did this over the weekend and saved about $22 a month, so $264 per year. Not too shabby!

  15. This is the first tip I’ve been unable to use. My company pays for my cell phone and my husband refuses to get one.

    I’m technically saving about $100 a month though, right?

  16. A few months ago, I called AT&T to bargain with them. My contract was up for renewal, and I was shopping around for better rates.

    After analyzing my usage, I realized that most of my minutes were to other AT&T mobile customers. If I switched carriers, I would need a higher minute plan so I wouldn’t go over.

    I didn’t really want to switch, but I did want a deal.

    I’m getting 12% off thanks to an employer discount, and when I asked, they waived the $17 or so “upgrade fee” for me to get a new phone.

    I don’t have a landline, and being so far from family I don’t think I could lower my minutes any.

    Works for me!

  17. Hmmm…we do have a cell phone and a land line, but the cell is pay-as-you-go and used only for emergencies. I think we spend about $25 every 3 months for the cell. The land line isn’t really used at all, though. That would save us $30 a month.

  18. I have an iPhone with AT&T. How can I threaten to leave them, since no other carrier supports the iPhone? I’m definitely not willing to give up my phone. Also, I tried the billshrink.com website, but the best plan it came up with would cost me $456 more per year. I think this is good tip, but it doesn’t really apply to me.

  19. This tip is an excellent reminder that I should switch to my boyfriend’s family plan. There’s one slot left. I was offered it months ago.

    Household savings for today: $54

    Week: $40 + potential ebay auction money.

  20. Probably your best tip so far, yet it won’t save me any money since I have an iPhone (with the cheapest plan and no frills).

  21. Don’t use a cell much, use a TracFone (or similar), don’t give the number out to friends, spend about $100 per YEAR. Ta-da!

  22. Step 3 is the most important part here. Be nice, polite and reasonable!

  23. Michael: You can’t. That’s the cost of your choice. But think about how this tip might apply to other expenses/subscriptions in your life.

  24. This is an excellent tip.I saved around 25 dollars a month by making the switch. I realised after couple of months that I was not using as much as I thought I would. I went online and changed it there . did not even have to speak to the CR guys

  25. Right now I’m “between cell phone plans”. I had been using a tracphone, which worked fine for me as I only used it for emergencies when traveling, not chatting or regular calls. But my husband, 2 college age kids, and 1 high schooler all have cell phones. We still have a land-line as we live in a mountainous area where cell reception is still iffy much of the time at home, and no cable available. I will definitely look at the bill and go to the website to see if we can get a better deal on the family members’ plans. I’ll have to get back to you on the amount of the savings. I’ve a bit of homework to do!

  26. When my plan was up for renewal in Feb I checked all the competitors. I was paying less at AT&T so I stuck with them. I just went and checked them all again, not thinking anything would actually change. AT&T is way overcharging me now! Wow – I could save up to $25 with T-Mobile and get unlimited on data, text and email. Definitely going to call AT&T and see if I can work a deal since I’ve been with Cingular/AT&T since 2002.

  27. No cell phone here at all. I lived 45 years of my life without one, had one for three years and am now living quite comfortably without one. When we lived in a rural area I carried one because there wasn’t always a phone booth within walking distance. I used it all of twice, both times to call AAA when my car broke down while driving alone at night. Don’t need it, sure don’t need the $50 a month bill.

    Todays’ tip: $0
    Cumulative: $0

  28. Dang, I was actually hoping I would see a savings with today’s tip since I’ve been thinking about switching providers for the longest – bad cell phone signal! Turns out I’m on the best plan.

  29. Nice tip! I’m on prepaid so it doesn’t apply to me, but your ‘other subscriptions’ suggestion reminds me to end my online banking contract (€30 annual fee, while the competition does this for free).

  30. Probably your best tip so far… something I’m really going to get into.

  31. So I went to AT&T to change plans to the cheaper suggested one. They said they couldn’t switch it without charging me $175 even though I’d still be using their company. On Billshrink the deactivation fee was not mentioned. I explained that if I were to pay the fee it would be in my best interest to change to Verison since they don’t have as many junk fees, would give me a lower rate, offer better phone, waive the start up fee, and I would actullay be able to use my phone in my house. I’ve change living location recently and my service now is awful I rarely recieve calls they just go straight to voice mail, on top of that I would still save a few more dollars with Verison over the next two years. They still said they couldn’t do anything I was really nice too. I asked for their retention number I’ll be calling it later. If I have to pay the fee I’m switching I would like to keep AT&T because my family uses it but if they can’t waive the fee our relationship is over.

  32. I was skeptical about this $1,000 challenge, but when I saw this post, I decided to give it a try, because I am rather tired of paying $50 per month when I don’t really use my cell all that much.

    So first I examined my text usage and was astonished to see that I use less than 200 texts per month, but I have an unlimited plan. I switched that to 400 texts per month and shaved $10 off my bill. Next I looked at my minutes usage. I pay $30 for 300 minutes and free weekends, and I usually use around 70 of the 300. So I switched to a $20 plan that gives me 60 regular minutes, 60 weekend minutes, and 500 mobile-to-mobile minutes. Thus, I nearly cut my bill in half!

    Thanks for the impetus, Ramit.

  33. Michael – I hear that Sprint has a phone that competes with the iPhone and it just came out, they are trying to compete with the iPhone so their plan offers unlimited everything for $100, which I believe it less expensive than th eiPhone plans. Also, the phone can be like $150, which from what I understand is cheaper than the iPhone. I dont know all the details, but its something to look into.

  34. Well, after getting all excited, it looks like I am only going to save $10 a month on this one. I had the AT&T 700 minute plan and did some analysis and found that we were averaging 590 minutes. So I can easily tighten up on the calls and drop down to the 550 minute plan. Unfortunately, like Green Panda says, I will loose most of my 2200 rollover minutes. Also, unfortuntely, all the other major carriers have the exact same pricing for their plans and, anyway, nobody else offers anything less than a 700 minute plan. So I don’t have much of a negotiating rock to stand on except bluffling, begging, and kindness. So I might be stuck with only the $10 savings from changing plans… Oh, and Billshrink congratulated me on already being on the best possible plan. I am starting to get the sense that I am already a decently frugal person without a whole lot of new places to save tons of money.

    Oh well, it is only day 5. Keep it coming. I am up to $10 now this month.

  35. It’s never a bad idea to think about what you really need. I’m a self-employed work-at-home individual, so I rarely use my cell. A landline and a pay-as-you-go cell for on-the-road emergencies serve my purposes for a total savings of about $40 per month over having a landline and a regular cell (I consider a landline essential because I have children).

  36. I have been with Sprint for over 7 years. Last November I called to add my husband to my plan and the woman helping me was so great! She automatically gave me a 10% Loyalty discount. I have had a LOT of problems with them, but I have managed to keep my loyalty discount – which I LOVE since it also applies to my data plan (which I nabbed for a measly $5/mo from the same woman), text messages, etc. If you are with Sprint, ask them for the 10% loyalty discount and ask them to look up the codes for older plans. Like Ramit inferred, just because it’s not on the web, doesn’t mean it’s not around.

  37. I had used verizon for the past three years, but I was leaving the country for 12 months, and I wanted to keep my phone number active so I could use it as voice mail when I was away and then get my number when I came back. Verizon wanted to charge me the full monthly rate for this. I figured out that I could get a prepaid plan with t-mobile, and pay $10 every 3 months to keep my account active.

    When I told verizon that I wanted to switch, I asked if they were willing to match t-mobiles plan. They made no attempt to negotiate and just switched me over. I found it to be very contrary to everything you’ve said about customer service.

  38. This tip is such a great reminder. Another thing to do is to check that bill with a fine tooth comb. I found out one month that my “roaming patterns” had changed. In other words when I got my blue tooth headset, I wasn’t aware when I was roaming and was getting caught. I called and they took off the $16 overage.

  39. Hey, I just wanted to stop by and say, first, congrats on having such a popular blog, and two, thanks for your methods and challenges on saving money. They really push you to save and the more you save, the more you WANT to save.

  40. This is fascinating. I’m actually planning on getting an iPhone this December. And I just found out that I get a 20% discount with AT&T though my job, which means my bill will not go up by much. Keep an eye out for employer based discounts!

  41. I did this 4 months ago because I was fed up with new ‘misc fees’ and terrible service from Sprint. I am now saving 30 dollars a month on my family share plan, and service doesn’t seem so terrible anymore :)

  42. I had actually just done this reccently with my cable company. I had a plan with phone, internet and television all bundled together and for the first year it was $39.99. Well that expired so I called them back and discussed my various options with Verizon Fios and Direct TV readily available to me. At first they claimed that the deal I had originally was only good for new customers but after a little negotiating I got them to resign me for the same $39.99/mo. Which certainly beats the 80 or 90 they wanted per month. I also switched to Netflix for 10 a month instead of paying 30 extra per premium channel. That should help too.

  43. Billshrink is a great site. I’ve blogged about it before and started back in July with a plan change saving $536/year. So … new tip for some… I’m still waiting for a tip that I haven’t already implemented. Still hopeful!

  44. This one I’m feeling kind of lost on as my husband manages the cell phones; I don’t even know what plan we’re on!

    Still it will be good to open the discussion with him and see where we stand. We’re also considering getting rid of our landline so that will save some spondoolicks, though I unfortunately can’t tell how much at the moment.

    Day 1 savings: $0
    Day 2 savings: $18
    Day 3 savings: $25
    Day 4: completed
    Day 5: in the works

  45. I’m on my dad’s family cell phone plan because it’s cheaper to buy a family plan. I send him $12 each month as reimbursement for my portion of the service. Unlimited nights and weekends, unlimited minutes within the Alltel network. Texting is $0.35 apiece but I do without.

  46. Sarah, (& everyone else I see complaining about Ramit’s FREE blog),
    Remember this is only tip #5, maybe there will be more tips for you, maybe not. Maybe some tips won’t work for you right now, but in another season of your life. What’s the worst that can happen? You save $15 instead of 1k this month. You’ve still saved money! :)

  47. Cool site, but it told me that I’m already on the best plan for my cell usage. We dropped our land line months ago, so we already have that savings. I’m not going to bother calling my cell phone carrier because I’m already getting a 21% discount on phone service through my employer. The only extra add on service we have is unlimited text messaging, which we use often enough to justify the unlimited charges.

    Today’s tip: $0
    Cumulative: $57

  48. Well I swapped to a plan that is only marginally above my usage at an $11/mo savings (on a $40 plan). Mentioning that my contract is up in a month netted me a 50% increase in minutes for 2 months, which will give me the safe overhead to test out my usage on the new plan without going over.

    Noted on my calendar to check up on usage a couple times.

    Saved to date: $40

  49. Ha, the ‘leave a tip’ bit keeps forwarding me to a page to write my own survey – If you can get me past it, the latest tip is ‘eat out of the freezer/cupboards this month’ . so far, saved £40 this week… [usual grocery bill £50 per week, spent £10 on veg, living off rice/packets/soup/freezer contents, reckon I can save £30-40 every week ]

  50. I just saved $20 on a the minimum plan AT+T offers — I think — PLUS iPhone extra charges of $20 per month for 2 adults. Their site let me do the whole thing in about 6 minutes so I’m not totally sure I got the best deal, but $20 is $20. Yay.

    And for a tip… I heart the clothing swap. I think its more appropriate for women than men, but I could be wrong: http://www.rookiemoms.com/swap-til-you-drop/

  51. This post reminded me that I need to get off my butt & cancel my landline. The savings of $45 per month or $540 per year are offset by the high speed internet I just installed, but I split that cost, so it’s $20 per month, $240 per year. Total savings: $25 this month.

    I’ve sold a couple items through Amazon for a net gain of ~ $20.

    We’ve also had an unprecedented warm spell, so the heat hasn’t been on since Nov. 1. Savings ~$10.

    Total net change so far: $55.

  52. I really like this tip, but I already implemented it a few months ago.

    My first contract with Sprint was up, so I renegotiated a new plan with them:

    5 phones
    1000 shared anytime minutes
    300 texts
    unlimited mobile-to-mobile
    unlimited nights and weekends starting at 7 PM
    Free unlimited roaming
    Sprint to home (Free calls to/from one number)
    Total including all taxes and fees is $91.18 (less than $20/phone).

    So, I agree with Ramit – almost no matter what plan you have, you can save money. However, you have to be willing to walk if necessary, and you MUST go to the cancellations/retentions department to get the really good deals.

  53. I did this and am saving $5 per month from going from unlimited texts to 1000 per month (yes, I use that many).

    I have already pared down by only having 600 minutes and by only having email (instead of email and internet). I did that several months ago…

  54. I rarely use my cellphone, but I still need a phone number of some kind for those rare but important occasions.

    I currently use Tracphone, and at $0.10 a minute, I am roughly average less than $10 a month on my phone bill.

    I also don’t need or have a landline. I’m not sure what reference I would use in terms of savings, but… this is it for me.

  55. This is very good information, but I have one more thing to add. If you are with Sprint watch out!! After being with Sprint for three years, (one year and 1 month after my 2yr contract ended), I changed my plan to include more text messaging. About 7 months later I had saved up enough to get an IPhone 3G, thus had to sign up with ATT. So I paid off my last bill, then had my number ported. roughly two weeks later, I got a bill from Sprint telling me that they renewd my contract for 2 more years because I ‘changed my plan’ and to get the unlimited text required another contract. After having Sprint reps hang up on me about 4 times, each after 10-15min conversations- I finally got them to remove that bogus $250 penalty for an upgrade that only increased my bill by $5 (even at 2 years $5x24months= $120) so you figure. Make sure your current carrier did not extend your contract without your knowing – let you cancel – then knowingly bill you for early termination.

  56. Thanks Ramit! Finally made me revisit this plan, saved $20/month. Did the same thing for my car insurance and saved $300/year.

  57. I just did this, and the fifteen minute conversation with AT&T has just saved me $20.00/month, or $240.00 per YEAR. That is huge. This is a fantastic series you have going, Ramit. Thank you. :-)

  58. I have a prepaid cellphone costs 25 cents per minute with a minimum $5 per month. ($5 gives me 20 minutes which expire in 30 days; unused minutes roll over if more minutes are added before expiration.)

    To save money I use the phone primarily for incoming calls and save outgoing calls for times when I have access to a “free” landline.

  59. Wow, this one actually helped me save money. :) Well, kind of… It turns out that my text messaging plan is not unlimited, as I was told by a CSR a few months back, but actually only 300 texts a month. That means that I was going over by about $7-8 a month for the past few months! >:-[~~~~~]

    Did some research on similar phone plans online. Turns out mine is actually as good as it gets – 1,000 minutes and 300 messages for $45/month. Called Sprint, tried to get them to price-match their competitor’s cheaper (yet inferior) plan and they said that my plan is not being offered anymore and I should basically be happy that I had locked in when I did, because current 1,000 minute plans cost $60 a month (+$5 for texts). That was a pretty good point… Asked them about additional applicable discounts (such as 10% off student discount) and they said it can’t be applied to my current plan BUT they said they could give me a $70 credit if I extend my contract for one more year. That way, it would always be $45/month (and it looks like plan prices will be much higher 2 years from now) until 2 years from today and I’d also get a $70 credit from them.

    All in all, I think it went pretty well – I got locked in with a really good plan and basically inflation-proved myself, so if and when our currency goes the way of Zimbabwe, I’ll still pay the same amount each month. Mwa ha ha ha… Total savings? $70 on my phone bill (even though it’s only one time) and about $8 a month that I won’t overspend on text messages, now that I know how many I actually have. I guess that brings my total for these 5 days to *drum roll* $78! Hmm, going like this, I’ll save “only” $468 this month, so I hope you’ve got more unconventional and motivational tips coming up. ;)

    …oh, and thanks! :^D

  60. For those of you out there sometimes making a call won’t do it, if not go try a CSR at an actual store location. I had just gotten a phone less than a month ago and got a work phone shortly after. When calling my company’s call center I was told that I’d be charged an early disconnection fee (175) and that the refund would take 6-8weeks, and insisted such. I went to a location last night and had my wife work with me good cop bad cop (yes sometimes it does work). Not only did we get her phone switched out (having some issues), I got out of the contract without an EDF and returned my phone/accessories for a 1-2 day (pending on bank) refund turn around. So really I saved 175$ EDF, I’m saving about 720ish/yr and another 200$ for the phone/accessories. Although now I’m thinking maybe I should have kept the phone and put it on ebay if they woulda let me keep it. 300$ phone I got on sale with the signing of the contract, then again maybe they wouldn’t have let me out of the contract without a fee if I wanted to do that. Hrmm, would be a good way to work the system for moneyback huh. GLA!

  61. Check if your employer provides discount with service providers. I recently found out that my company offers Verizon discounts and am now saving 15% off the cheapest plan.

  62. WOW!!!!! What an amazing money saving tip…I did exactly what the article told me to do and the my mobile provider went nuts that I was willing to walk away. I asked to be transferred to the cancellation department and they automatically, without asking me, turned me over to their retention department. They started being extremely nice to me and this & that & al this other stuff. They lowered my monthly bill by taking off $27 dollars a month for me to keep me on even a better plan. Thats $324 of savings a year. AMAZING! Thank you so much Ramit Sethi; you’re genius.

  63. I just got off the phone with ATT wireless and armed with the billshrink data, got $10 shaved off my bill for 3 months for a total savings of $30. The rep told me she could have done more if I was on a group plan. I wasn’t required to get a new plan, but at my same level of service saved $10 a month. I was encouraged to call back in 3 months as they are happy to help such a quality customer stay happy.

  64. [...] post:  Tip #5: Optimize your bcellphone/b bill | I Will Teach You To Be Rich Posted in Uncategorized | Leave a [...]

  65. Tried calling Verizon and they shut me down as I receive a corporate discount. My suggestion would also look into your employers benefits to see if they have negotiated corporate discounts for their employees. Second note, I have applied this principle to my gym membership and saved $10/mo.

  66. I also tried calling Verizon today as I found that with ATT I can save $16 dollars a month. Verizon wouldn’t budge because I am already getting an employer discount of $20 per month through Verizon and plus my work is paying $30 per month for me to have my phone. I save $50 a month this way…but still end up paying $80 because I have a Blackberry. The contract is up soon so I may switch to ATT to save even more.

  67. [...] Optimize your mobile phone bill – I’ve already done this and will save £20 on my phone bill this month. [...]

  68. :-) I optimized my cell phone bill, all right: when Qwest decided to rip me off, I canceled Qwest’s service, and with it, the Qwest cell phone (a discussion with the state corporation commission helped with ending the contract early).

    I now have a land line, period, which thru’ Cox is one heckuva lot cheaper than a cell phone costs. How do I not care whether I can yak at my friends while sashaying down the sidewalk? Let me count the ways….

  69. Thank you! The detailed plan of attack definitely makes this tip so tangible and easy to do. I just called up my internet provider and followed the conversation you provided. Before I even needed to go down the cancellation path, they offered me an economy package that is a slower speed but saves me $20/month, which I didn’t know they had! I’m so grateful for your tip because the main reason I’ve been unsuccessful in the past with this endeavor is not knowing what to say and how to say it. Thanks, Ramit!

  70. I tend to use my cellphone to check on email when I’m away from my computer, which doesn’t happen all that often. But then I do pay the price. I’ll work on restraining myself and rein in my curiosity until I get home again.

  71. Sprint also now includes a ‘plan optimizer’ on their web site which will automatically calculate your usage against their ‘best’ plans. It automatically found a plan for $20+ cheaper than I was paying (BlackBerry with data plan) and so far I’ve saved $25 per month. One caveat – make sure they change your plan and pro rate any time remaining in the month you switched. It took Sprint > 2 months to ‘update’ my plan and I had to ask for a credit (which they offered. I also suggest emailing to follow up).

  72. Ha, I am so pumped, I was feeling discouraged because when I called all the other carriers they were all more expensive than my Sprint plan. I just decided to call Sprint to be sure that I had the right numbers (mins, price per line, etc) since no one was cheaper, just by calling in the lady said “Well ma’me by looking at your account I see you would benefit from blah blah plan, it has 200 hundred additional mins. and no extra for the unlimited text – as I have a houseful of teens that is very important- and that will cost you $10 less per month” – awesome – thanks to this little challenge I saved $120/year and confirmed that i was getting a good deal already with my current carrier – thank Ramit – I would not have done this without your encouragement.

  73. I tried this out last night with ATT. I looked up some other plans and found one on Sprint that actually looked good for me (which was a surprise since I always thought my 450 minutes for 39.99 was the lowest plan for most carriers). The Sprint plan is 200 minutes/1000 nights and weekend for 29.99 (still more than i’d use but $10 cheaper a month). I know pay-as-you-go might be even cheaper for someone like me, but I’ve been told I wouldn’t be able to keep my number if I switched to that type of plan.

    I’m out of contract with ATT and didn’t actually want to switch as it would mean signing up for a new contract with someone else. I like that I’m free to switch whenever I want right now.

    I called ATT up following the procedure in the above post, and wouldn’t you know, ATT had that same plan (without me even mentioning it), as Sprint. Best yet, I was able to sign up for it without signing on to a new contract. If it turns out to be too few minutes, I can freely switch back, though I doubt I’ll need to.

    So glad I gave it a try! That’s at least $120 a year I’ll be saving, that would have been lost on minutes I never use!

  74. Nothing saved here, I’m on my parent’s family plan for $20 a month, hard to find a better deal than that.

  75. Hi everybody,
    I’m from Portugal and I did just that kind of negotiation a few months ago with my Internet and Cable provider: I’m now paying 10 euros less per month AND got free national phone calls for 1 year. Nice!

    We’ve got the power! Hehehe

  76. $0 for me on this one. I currently have a company cell.

  77. I’ll review my phone bill again. Although my company pays 75 dollars a bill, I still use up to $120 a month with my wifes phone. So thats $45 bucks still out of my pocket. So I’ll delete the text messaging off her phone and add it on mine. That adds back onto my phone bill. So I’ll almost hit the $75 max. If I move all that over my personal bill should end up being 30 bucks a month. Thanks for the advice.

  78. Sounds like I need to research plans when I return stateside next year. We currently pay 980 yen (about $10) per phone for free unlimited texting all the time, free incoming calls all the time, and free outgoing calls 0600-2100; I had to teach my teenager that she can only text after 2100 as she ran her phone up an extra $20 by talking to her friends after that hour. We were with Sprint for nearly 10 years before but had problems with them trying to charge us the ETF when we were exempt with orders overseas — took 3 months to get them to credit my credit card back for the fee!!

  79. I have had Verizon for last 4 years. Never have I gone over my basic lowest plan minutes. I also get employee discount from my university. This month however, I was traveling out-of-state and apparently you have to reprogram your phone to be able to access all the minutes/balance information on your phone or Verizon website – something I didn’t do. So I couldn’t access any of that information and was crazy busy the whole time. I had to talk to several people and didn’t pay attention to my minutes. As a result, when my bill came, I was over 135 minutes – $60 extra charge! I called Verizon to see if they will compensate that because I couldn’t access my usage information. Well, they didn’t, because I didn’t program my phone etc. But they did give me a courtesy $25 credit, since this was my first time and all. Oh well. I have learned my lesson. Is there something else I could’ve done to get everything waived ?

  80. Good advice, I’m glad I found the link to your site from one of the other finance blogs I frequent. The first thing I did when it came to cutting down my cell phone bill was come to terms with the fact that I don’t need an iPhone or blackberry with 8274375 programs, email, internet access, mp3 player, ringback tones, etc. I needed a working phone that allowed me to make phone calls and the occasional text, period. I also did what you did with the plan; I signed up for a moderate plan and tracked my usage for several months. After those months, I saw that I really was only sending out less than 100 texts/mo and using less than 500 minutes out of 2000/mo. I pared down my plan to the most basic– 250 texts/mo and 500 minutes/mo. I also did some research and found out that my company offered network discounts, so I called the network and had that added to my account.

    A year ago, I was paying $300 min/mo. Now my payments are $30/mo, with taxes. I took it a step further and instead of waiting at the end of each month to pay the bill or using automatic online pay, I just put in $100-200 one time and the network deducts from the credit until the credit runs low and I replenish it. My cell phone bill is paid for 6 months at a time, so I no longer worry about it and I save the money that would have been spent on a large bill.

  81. This was *tough* *tough* *tough*. I do realize however, that my data access on my mobile is a complete luxury, and $30+tax/month makes sense. This may be one of those that I pick back up again shortly though :)

    I’ve gotten great rates with cable companies in the past by using your technique above (i was honestly about to switch ‘cos direcTV had a better deal than dish at the time) so i got hooked up by dish.

    nowdays i have neither, although boxee + 12GB internet have supplanted cable. i prefer full on demand rather than piping it to me anyway.

    j.

  82. There is another key route that an increasing number of cell phone subscribers are taking to slash their bills. In particular, customers with plans by Verizon, AT&T, Sprint, T-Mobile, and US Cellular are seeing substantial savings achieved through a company called Validas.

    The name of the Validas website, http://www.fixmycellbill.com, provides a good idea of what they do. Within seconds, Validas analyzes your online cell bill and generates a dollar figure of the exact amount you could be saving on your plan. Validas was able to save me over 19 bucks every month on my Verizon Wireless plan–or over 230 dollars per year. If you choose, for a nominal fee of $5, Validas then provides a highly detailed cell bill adjustment report that you can easily email to your wireless provider in order to make the cash saving changes that Validas specified. I would highly recommend checking out this service to any cell subscriber who wants to cut costs, especially since Validas tells you for free whether or not you can save any money on your plan.

  83. [...] down 3 degrees Sell something on eBay today Involve your friends in your savings challenge Optimize your cellphone bill Use gas prices to become your own hedge fund Create a “No Spending” day once a week Implement [...]

  84. This prompted me to reasses my packages. I just called our cell-phone carrier because I noticed that we had 11,000 roll-over minutes, which meant our plan was too high. I also discovered that they were still charging me for an international package even though I called them numerous times to remove. In the end, I received a $36.49 credit towards next month bill and I reduced our monthly bill by $100. That’s a $1,200 savings for the year.

    On our cable, phone, internet, I did not have a bundle package. I signed up with a promotion and have put a reminder in my calendar for next year to renogiate when the promotion is over. Savings here: $49.98 a month/$599.76 year.

    With a little prodding from you I’ll be starting the new year off right with a reduction in our budget of $1,799.76.

    Awesome!!!

  85. Just called AT&T Wireless and was transferred to the cancellation department. Even though I’m on an iPhone plan, which is difficult to have reduced, I was able to save $20 a month by negotiating with the CSR to let me keep my 5,500 rollover minutes. The amount of additional minutes I’ll need each month will allow me to save about $20 a month for a year, for a net savings of $240.

  86. I actually had two cell phone plans with AT&T, one for my “business” phone and one for my family phones, both of which contain iPhone goodies.

    My family plan was about $120 a month and my business was running about $130 per month. So at that I was paying $250ish per month for cell service.

    I called AT&T a week or so ago to see if I could have both plans rolled into one. They merged my two plans together and now my monthly bill for the same services and numbers is $150. So that is a net savings of $100 per month or $1200 for the year.

    Thanks Ramit! If you had not started me thinking about this, I would still be wasting money.

  87. [...] If he or she doesn’t give you the plan right away, do what Ramit Sethi recommended over at iwilltechyoutoberich.com  You: “Listen, you know times are tough and I need to get a better deal to stick with you [...]

  88. i just found your blog (my friend sent me the link) and i love it! i just used this tip and in one hour (research + phone time w/ verizon) i lowered my bill $24.99 per month and got a $25 credit towards a new phone ($50 under my insurance plan… mine broke).

    total savings: $24.99/month x 19 months + $25 for new phone = $499.81.

    you are awesome!

  89. I called AT&T and they changed my 39.99 plan to 29.99 for only three months so basically I’ll have to do same negotiation once again after 3 months. Any suggestions????????? on how to deal with AT&T next time.

  90. My family has been getting a “government rate” because my husband worked for a city that gave him a phone. When he left that city and went to another city we kept the number and the “government rate” was left in tact. So I suggest asking for the “gov rate” and see what you can get.
    I cut my land line $15 by downgrading to the “poverty package”. The phone guy started laughing when I used the “poverty package” term. I went back to an old fashioned answering machine my mom had lying around. I figured why pay the Qwest $84 a year for voicemail when I can get an answering machine for free and use the $84 for something else.
    DON’T LET THEM DO THE NUMBERS FOR YOU!!! Do some math beforehand so you know how much things really cost. The first time I called Qwest to downgrade their customer service rep gave me the wrong numbers to make me believe that “staying on the plan” would be cheapest. HAVE A CALCULATOR HANDY WHEN YOU ARE TALKING TO THEM!! I corrected this woefully misinformed customer service rep. When she stated that I would “only” be saving be saving $15, I responded by telling her that it was MY money to spend, not hers.

  91. Another cell phone tip: You can have them put a lock on the megabyte and pixflix. I did this because my kids would occasionally on accident push those buttons and then I would find a charge or $1.95 on my bill. I’m still going to check my bills, but the Verizon rep said that this “lock” would take care of the accidental charges.

  92. People, the iPhone is luxury item with no direct competitor, so you will have limited (if any) bargaining power with the iPhone and it’s proprietary service plans. If you really want to learn to be rich, avoid the clutches of the shiny iPhone and find a respectable phone for less that gives you more pricing flexibility. Moreover, when it comes time to purchase a phone, scour the Internet cell phone stores (like letstalk.com) for their best price on the handset (and maybe the free accessories it comes with), print it out and take it to a local merchant POST-HASTE and ask them to beat the price (not match it–what’s the fun in that?).

  93. I just made this call to my cell phone company last night and got a free month of service and 100 extra minutes this month. Worked like a charm. Thanks Ramit!

  94. [...] So I’m trying to optimize our cell phone bill based on reading Ramit’s post on lowering cell phone expenses.  [...]

  95. To Michael, Nov 2008:

    We’re stuck with the iPhone, but you still might be able to save money.

    After reading the comments here, I went to the att.com/wireless website and downgraded my plan on the original iPhone for a net savings of $27/month. It took less than 5 minutes.

    You lose some rollover minutes by doing this, but in my case I use the data much more than the actual phone. (Rollover minutes have no value if you never actually use them.)

  96. I just called Comcast and saved $32/mo with no changes to service just by asking for a cheaper bundle.

  97. I saved $9/mo on AT&T. First used Billshrink.com to get my argument straight. I went from a $40/mo plan for 450 minutes, 5000 nights&weekends with $9 add-on for early N&W (starting 7PM) to an unadvertised (I think) $40 1000 minute plan with unlimited N&W, but no mobile-to-mobile or rollover. Annual savings $108 (before taxes), took 2 phone calls and about an hour.

  98. [...] how to save money on your cell phone, including calling up your company and asking for a discount. Read his article and see how to save some serious [...]

  99. I’ve blogged about it before and started back in July with a plan change saving $536/year. tks.

  100. Just checked out billshrink after watching your recent youtube spot. Saved $60 a month on my phone bill in 2 minutes. Amazing.

  101. I’m on a discounted plan through my company and was paying 50/mo for 500 minutes. My roommate mentioned her plan for 30/mo for 450 min. I have never gone over and looked at my current month which is done next week and I only have used 66 minutes so I quickly switched to the $20/mo cheaper plan and can’t wait. I hate giving Verizon any extra money since they have caused me so much stress and blatantly steal people’s money so yay!

  102. I just tried this with Verizon and unfortunately it didn’t work out. Rather than give me a discount, the operator offered to cancel everything and charge me a $250 cancellation fee. What did I do wrong?!

  103. [...] Tip #5: Optimize your cellphone bill, Rachel writes: “I just did this, and the fifteen minute conversation with AT&T has just [...]

  104. [...] Tip #3: Sell something on eBay today Tip #4: Involve your friends in your savings challenge Tip #5: Optimize your cellphone bill Tip #6: Use gas prices to become your own hedge fund Tip #7: Create a “No Spending” day once a [...]

  105. I have Sprint. Had Sprint for over 10 years. Every mnonth I have about 300 or 400 minutes left EVERY month. My son texts more than calls. We have 700 minutes on shared plan. I use about 150 every month. This past month for some reason he has been calling more than texting and we were over by about 250 minutes. $92.00 charge. I am going to demand all my minutes that I have had left over and if they don’t do it,I will cancel and I will have that bill hanging over my head till the day I die,but I really don’t care. I am tired of paying for something that I nerver get.