Pay the Cancellation Fee and Start Saving

Almost as soon as we signed our last Verizon contract, we started to regret it. Our service was modest by modern standards; we had 700 minutes to share (plus free nights and weekends), which we never even got close to using up, and no texting plan. We had basic phones, not smart phones, so we didn’t need data. Yet with the few texts we did send and receive, our bill hovered around $90 a month. We realized that we could have gotten something cheaper through a prepaid plan with one of the other major carriers.

But we felt stuck. After all, we had a contract! It was too expensive to get out of! And we needed good service because, like a lot of people these days, we don’t have a landline. So we kept plugging along, paying out the nose.

Then we found out about super-cheap cell phone plans (thank you, Mr. Money Mustache) from upstart competitors. If we could pay THAT much less for service, then the cancellation fee would be worthwhile. Mr. FP, our cell phone decision maker, spent hours and hours researching Republic Wireless, Ting, Airvoice, and more.

Unfortunately, there were no really good options that worked with our Verizon phones. We were going to be paying a $200 cancellation fee (ouch! That’s $150 flat plus $5 per month remaining on the contract), so we needed to keep down upfront costs and decided to hold up on upgrading to smartphones.

Samsung phone Amazon link

Isn’t it quaint?

So we bought even dumber phones! Our little Samsungs–no camera, and you have to set the time manually, but they have FM radio tuners–cost about $20 each. Now we could get Airvoice plans for $10 a month each.

Yes, you read that right. Our total cell phone bill is now exactly $20 a month for two lines. With savings of $70 per month, the cancellation fee plus new phones pays for itself in just over three months. Over six months, we’ll save $180. Over the ten months remaining in our Verizon contract, we’ll save $460. That $10 per line can buy you 500 texts messages or 25o minutes of talking, or some combination thereof.

How is that enough, since we don’t have a landline? Well, for calling and texting from home, we now use Google Voice (free calls and texts!). Especially because, I must admit, our new phones are terrible. The coverage seems to be acceptable, but texting is unspeakably tedious and we get terrible static on the lines. (We suspect this is a problem with the phones themselves rather than the service.)

Sure, our old Verizon plan was “better”: more convenient, more comprehensive. But it was absolutely not “better” to the tune of $70 a month, $840 per year, in perpetuity. Over 10 years of compound interest, that $70 a month adds up to over twelve grand. If you’re still regularly shelling out three figures or close to it for your family phone bill, it’s time to stop indenturing yourself to the phone company and start feeling the freedom.


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About frugalparagon

I'm a part-time librarian and mom to two small boys. I blog about striving for the long-term goal of financial independence while running a tight ship at home.

5 responses to “Pay the Cancellation Fee and Start Saving”

  1. Mel says :

    Honestly, I can’t imagine paying that much for my phone. I pay $10 for my smartphone on my parents family plan. I don’t even know how people manage to have smartphones unless they’ve got a bunch of people bundled together on a family plan.

    • frugalparagon says :

      Well, ultimately we couldn’t imagine paying as much as we were paying either! And smartphones would have been a lot more. I have heard good things about Ting as a low-cost alternative and some people like Republic Wireless. But some people are just prepared to shell out boatloads of money not to be left out.

  2. Insourcelife says :

    I’m also using Airvoice with Google Voice with Obi and like the results. Unfortunately Google Voice gravy train is soon to be over. On May 15 Obi will no longer work. Oh well there are other options although I have not found anything as good as this combo… yet.

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