When I graduated college three years ago it was time to upgrade from the trusty flip phone that barely survived my four years of school. I was a Verizon customer, but I really wanted an iPhone through AT&T. I weighed the two choices for a long time, considering all the pros and cons (specifically the pro of being cool and the con of having less money). The finance nerd in me did some quick calculations.
- Individual line with 450 minutes ($40/month)
- Data Plan ($25/month)
- Unlimited Texting ($20/month)
- Fees ($10/month)
Was $95 a month really worth it to me? $1,140 a year for a phone that people went without for hundreds of thousands of years and got along just fine? Was there a way I could get the features of the iPhone, but for way less money?
The Frugal Man’s iPhone
I finally decided after much deliberation to get a cheap phone with a cheap Verizon plan and an iPod Touch. Since May 2008, I have carried both my LG enV2 and my Apple iPod Touch around with me wherever I go.
Annoying? Yes, but I have saved a lot of money by not jumping for an iPhone after college. The purchase price of the iPod Touch and how much it would have cost for an iPhone cancel each other out.
In December 2009, I also merged my line onto a family sharing plan with my sister. This dropped my monthly price from $54 to $30 a month (and would be only $10 if I didn’t text).
Looking back 37 months later, here are the savings I’ve had from choosing to carry two devices and have “a poor man’s iPhone”.
Actual spending on cell phone for the past 3 years:
Average = $40.94 per month Total = $1,514.69
What I would have spent on an iPhone with a data plan:
Average = $95.00 per month Total = $3,515.00
Total Amount Saved = $2000.31
Two Easy Steps to Be More Frugal
There were two simple steps I had to take to achieve this amount of savings.
1. Resist the urge to upgrade. 2. Find a way to pay less for essentially the same thing.
That’s all it takes. Remind yourself that you aren’t entitled to have the latest gadget, television subscription, or trip to Tahiti. To be financially independent, you need to make conscious decisions every time you spend your money.
Do I still feel inadequate when people pull out their smart phones and look up a restaurant or directions? A bit.
Is not having an iPhone worth the money I have saved the past three years? Absolutely.
Where do you make sacrifices or life hacks to save large amounts of money over time? I’d love to hear in the comments below.