The Intelligent Person’s Guide to Cell Phone Plans

Surprise! This week Joe and I have decided to switch things up. Today I’ll talk about megabytes (sort of) and this weekend Joe will talk about money.

For a while, I was mooching off my very generous parents for my phone/phone plan. As a result, I got kind of lazy and never looked into optimizing this category of “spending”. So before I begin I have to credit my good friend Yuri who inspired me to learn about cell phone plans. He sent me a link to Frugal Professor’s phone plan, which led to a few months of research that have culminated in this post. So thanks Yuri and Frugal Professor!


Even though I fancy myself a frugal, efficient person, I’m actually pretty much your typical American ultra-consumer when it comes to cell phones. In fact, I might even be worse than average. For example, in the last couple months I’ve used something like 25 GIGABYTES of data (mostly over WiFi). Minutes are a little harder to track for reasons that will become clear in a bit, but I’d estimate I’m probably close to or over 1,000 per month, plus 1,000+ texts per month. Clearly, I use my phone a lot. Kind of scary to actually type the numbers–maybe I should get some help!

Establishing Principles of Cell Phone Use

Before we start, we need to define some basic premises:

  1. For most of us, we spend a great majority of time connected to WiFi. It’s at home, at work, and in many public places. Also, if you have Comcast1If you do, I’m sorry. I feel your pain., you also have access to xfinitywifi which is pretty much everywhere2Apparently this is a pretty controversial practice on their part, but that is a topic for an actual Joe post. . Calling and texting over WiFi is FREE (read on), and here in the land of sane people we do not pay for things that are free.
  2. Mobile data is definitely not a necessity. To discover this, I turned off mobile data on my phone for about three weeks. I survived. Yes, you can’t look up how to make pickles while you’re shopping for groceries, but in general you won’t be missing much. For navigation, you can download Google Maps when you have WiFi for use offline. I’m not going to suggest going without this completely in this post, but I just want you to realize this isn’t something you need much of at all. It’s actually a pretty recent invention, and we were all just fine before we had it.
  3. Ok, before you assume this will be way over the top, here’s the last premise. We don’t want to totally inconvenience ourselves. Being able to talk on the phone while on the go and look something up in a pickle3Get it? Because I just mentioned pickles… might not be things we can completely eliminate while still being comfortable. We can pay a little bit of money for these luxuries.

The Cornerstone: Google Voice

The basis of any good cell phone setup is a Google Voice number. A Google Voice number is free. It allows you to call and text over mobile data or WiFi. Most of your life is connected to WiFi, which is free, which means most of the time you can call and text as much as you’d like for free. Most people (not me, unfortunately) can port, or transfer, their phone number to Google Voice for a one time fee of $20. You can check your own number here. Either way, your Google Voice number will be ultimately be your primary number, and you’ll have another number connected to your SIM card that no one or almost no one will know about.

Having a Google Voice number as your primary phone number basically eliminates the need for unlimited talk and text. When you have WiFi, there’s no limit on how much you can talk and text over WiFi. But what if you want to talk and text without WiFi? It turns out that calling and especially texting on Google Voice use surprisingly little data–on the order of 1ish MB per 100 texts and less than 1 MB per minute of talking. So even if you have limited mobile data with your plan, doing this won’t use much of it.

Mobile Data

Having a Google Voice number basically eliminates the need to pay for minutes and texts as part of a cell phone plan. Even if you want to talk on the phone when not connected to WiFi, you can use mobile data to do this. Because this doesn’t use a ton of data, and because of premise #2, you really don’t need a lot of data. After my experiment of not using any data for a few weeks, I turned mobile data back on and made a few adjustments. First, I turned on a “data saver” setting on my Android phone. Apparently Apple phones can’t do this, but you can regulate data usage at a single app level. I also downloaded most of my state on Google maps, as well as any areas I was traveling to in the near future. Then, I adjusted my Google maps settings to be “WiFi only”. Finally, I avoid streaming videos when not connected to WiFi. These basic adjustments alone resulted in mobile data usage of well below 500 MB in a month. I still receive messages over mobile data, talk on Google Voice, and occasionally check email and browse the web. It’s really not very limiting.

Of course, I could have just kept mobile data off without too much of a problem. It was a little annoying at times, but you can definitely get used to it. And if you want to use data occasionally, you can just pay for what you need.

What’s left

So, at this point we’ve essentially eliminated the need to talk and text over cellular signal, and we’ve seen that mobile data usage can either be totally eliminated or used in modest amounts without any major limitations. This leads us to the two best options for cell phone plans.

Option #1: Pay per use

If you don’t need mobile data, and you use Google Voice for talk and text over WiFi, then congratulations! You don’t need to pay for a cell phone plan. But if you do need to use a MB here and there, you can simply pay per MB of data (or per minute or per text if you need that, although if you’re using Google Voice you can just call/text over data which is cheaper). This is precisely the plan described by Frugal Professor. After doing some pretty extensive research, the best provider of these plans is Tello (trusting the link I just linked would’ve saved some time), which charges 2 cents per MB of data as shown below. Tello uses Sprint towers, so your coverage should be identical to Sprint coverage. In our interview, Frugal Professor told me he spends about $1 per month using this plan.

The one downside to Tello is that you need a CDMA or Sprint compatible phone. You can check your current phone’s compatibility here. If you don’t have a compatible phone, you can sell yours and buy a new one (more on that below), or go with option 2 until your current phone doesn’t work anymore then switch to option 1.

Option #2: $5 a month

If you know you’re going to want to use some data, the next best option is a pre-paid plan with a fixed amount of data each month through Red Pocket. Interestingly enough, Frugal Professor is the one who told me about this plan as well, so he’s really the mastermind behind both options. This plan takes into account premises 2 and 3–it’s a comfortable plan that’s still efficient. Red Pocket uses towers from any of the four major carriers: Sprint, Verizon, AT&T and T Mobile. They actually send you multiple SIM cards so you can literally pick whose coverage you’d like to have, provided it’s compatible with your phone. Their basic plan, sold on ebay, is $60 for 360 days and includes 500MB of data every 30 days. This in my experience has been more than enough. And you get to keep your phone, so it’s a win-win-win.

Red Pocket sends you multiple SIM cards so you can choose the coverage you want.

Getting Started

The beauty of this setup is that you can test it out before actually jumping in. Here’s how. First, check if you can port your number to Google Voice. If you can, great! Pick a random new Google Voice number that you won’t end up using and play around with it with a few friends/family members. If you like it, then you can eventually port your number to Google Voice and toss your original Google Voice number. If you can’t port your number to Google Voice, the process is generally the same but choose your “test” Google number carefully, because this will eventually become your actual phone number unless you pay to change it.

To use Google Voice, you’ve got to adjust the settings for your needs. Specifically, we want to use Google Voice over WiFi and mobile data. You can tweak Google Voice settings on the app and on your computer. I found this article pretty useful, although it is slightly outdated. You’ll also need to download the Google Hangouts and Hangouts Dialer apps if you have an Android phone or just the Hangouts app if you have an iPhone. The Hangouts app is what you will use to text and make phone calls over Google Voice4You might be able to use the Google Voice app for this, but I think Hangouts is better.. You can also have calls forwarded to your “actual” phone number–the number linked to your SIM card on your phone. Then you can choose to answer the call on Hangouts or just take it like a regular phone call. You’d potentially want to do the later if you don’t have good WiFi where you are and/or if you’re moving in and out of WiFi and you don’t want to worry about the sometimes poor phone call quality that results from this. This is how I have it set up, and when I receive a call I typically answer on Hangouts and ignore or reject the forwarded call. Or you can just not forward your calls and they’ll just ring on Hangouts.

Once you’re all set up and have tried and liked Google Voice, you’re ready to proceed. Choose option 1 or option 2 based on your needs. Port your number to Google Voice if you can. If you can’t, you’ll have to tell people you got a new number. In reality, you can still keep your old number and port it to Tello or Red Pocket. But calls and texts to that number will be charged either per use or count against your Red Pocket balance. If you’re really worried about this, Red Pocket has a plan with 500 min/text/MB for $99 a year, which is actually what I have, although I kind of regret not getting the $60 plan now that everyone knows my “new number”. Then, cancel your current phone plan and join Tello or Red Pocket. Follow their setup instructions. Stop leaking money for no reason. DONE!

The Upside

  • Price, obviously. Both plans are quite cheap.
  • You can test this out for free before committing to anything.
  • Google Voice has some nice features. Like voicemail transcripts. Always either accurate or funny.
  • Easy texting and even calling from a computer.
  • Syncing across all your devices.
  • Linking your number to multiple phones.
  • And more fancy features

The Downside

  • Sometimes call quality isn’t great. This is rarely an issue with good WiFi, although it does happen. Switching WiFi networks or going in and out of WiFi won’t drop calls, but it may break up for a minute. To avoid this sometimes I’ll turn off WiFi when driving.
  • If, like me, you can’t port your number to Google Voice, you’ll have to tell everyone you got a new number. Kind of a pain, but you can do it gradually and start while in the “test” phase. And it gives you a chance to tell your friends about your new awesome phone plan!
  • If you can port your number to Google Voice, you’ll have a new number with Tello or Red Pocket that you’ll create when you set up the plan. You don’t ever have to use this number unless you want to make an outgoing non-Google Voice call, in which case you might want to tell your closest people about your “other” number.

On buying a new phone

The current best phone in the world is $1000 or maybe more. The best phone in the world from a couple years ago is less than half that price. And the not-the-best but still relatively amazing phone from two years ago is less than half of that. Take, for example, the highly rated but still affordable Moto G5 Plus ($129 at the time of writing). Of course, the cheapest phone is the one you already own.

The Point

Your $50/month cell phone habit will cost you nearly $59,000 over a 30 year period. Don’t throw away 59 grand. Think about what you need and, really, what you wantYou can live a life of luxury, like me, and use data whenever the mood strikes you and even some cell phone minutes just to be wasteful for $5 a month. Or you can actually be frugal for next to nothing a month with option 1. Or you can upgrade your phone every two years to the latest and greatest and pay for some sort of unlimited plan like your friends and co-workers. But let me tell you, the latest and greatest from two years ago is still pretty great. And so are the tens of thousands of extra dollars you’ll have.

10 response to "The Intelligent Person’s Guide to Cell Phone Plans"

  1. By: Frugal Professor Posted: September 18, 2018

    Super happy to see this post! It’s remarkable how many people I’ve tried to help “see the light” of prepaid + GV. My success rate is probably on the order of 2%. For some reason, people can’t get it through their thick skulls that cell phones work 99% as well with data turned off and wifi turned on. Especially when utilizing “offline” versions of google maps + auto-downloading podcasts in wifi areas.

    I’ve found that if someone won’t give me the time of day to trust me enough to decrease their cell phone bill by 99%, then they will ignore every other life hack I throw their way (tax optimization, index funds, etc). It’s a remarkable litmus test.

    BTW, I’ve successfully converted almost all of my department to GV + Tello. It’s hilarious.

    • By: Joey Posted: September 18, 2018

      Almost all your department?! That’s awesome! I’m at zero so far, but I’m working on a couple people :). Hopefully this post will help. And yes, it is crazy how people can be so set in their ways. It also makes it tricky to really make your point without people feeling like you’re insulting their way of life. Anyway, I guess all you can do is throw the idea out there and let people take it or leave it. Thanks for the comment :).

      • By: Frugal Professor Posted: September 18, 2018

        I’m not sure what to think of the “insulting their way of life” thought. I mean, if I were senselessly throwing away $100/month per cell phone (or some other aspect of life), I’d be grateful for them doing so.

        I think the main hang-up is that they think it’s technologically difficult. Or that they won’t continue to be able to enjoy their cell phones. Both excuses, of course, are nonsense. I guess the other excuse is that they just upgraded phone and are locked into another 24 month contract. But with great android phones costing less than $150, it boggles my mind how this stupidity persists. Inertia and marketing are extremely powerful forces I suppose.

        • By: Joey Posted: September 18, 2018

          Agreed, most people probably do think it’s too difficult. Maybe inertia is a better way to describe the unwillingness to change, because I think the same thing is at play when people don’t take the advice to invest in index funds, live frugally, etc.

  2. By: Maryrose Posted: October 6, 2018

    Very inspiring & quite a challenge to switch from a habit/ addiction to a new system requiring a number of (trials/errors) …probably patience to experiment & getting it right!!!???

    • By: Joey Posted: October 7, 2018

      Yeah, it does take a little bit of activation energy, but that’s a one time thing and you get used to it quickly. I think it’s way easier for people who can port their current number to Google Voice. Unfortunately that doesn’t work for our area code :/. Still, I thought the whole process was very manageable.

  3. By: DAVID T Posted: October 17, 2018

    Thanks for the idea! I moved from Republic to Red Pocket! It was a wrench to let go of my 20 year old mobile number but worth it to save $15/monthly!

    • By: Joey Posted: October 18, 2018

      Awesome, glad you could make the switch! Were you at least able to transfer your old number to Red Pocket? I couldn’t transfer my number to Google Voice, but I was able to transfer to Red Pocket. I still had to tell everyone I got a new number (the GV number) but this way I won’t miss anything important. Hope you enjoy the new setup!

  4. By: JD Posted: October 3, 2019

    If I transfer my cell number to google voice can I keep using it on my cell while I figure out if I want to try and make this change and get my wife on board?!

    • By: Joey Posted: October 3, 2019

      Thanks for the question JD! If you transfer your number to Google Voice you can use it on the Hangouts/Google Voice apps. But I think porting your number to Google Voice will invalidate your current plan.

      The best way to “test” the system is with a throw-away Google Voice number that you use with family and/or a few friends. Then, if you’re satisfied, you can get rid of the throw-away number, port your actual number to Google Voice, and then cancel your plan and start a Red Pocket or Tello plan (with a new cell phone number that you won’t ever have to use or tell people about).

      Hope that helps! Let me know if you have other questions.

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