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.
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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 or on the Pocket Changed Facebook page.
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{ 16 comments… read them below or add one }
Great idea. As I started to read your post I was thinking you should get an iPod Touch but then read you did.
I love my iPhone as do millions of people judging by Apple stock and going into an Apple store. I’m lucky cause the family plan we’re on is covered through my mom’s restaurant.
Otherwise if it was out my own pocket, I may have to go the iPod touch route as well.
Great idea on saving money Caleb!
Thanks Benny. I would love one, just still holding out!
HAHA I love this extreme frugalness. Saving $2000 is actually a lot of money.
Can’t believe you used the same phone for 3 years though. I’ve had my DROID for about a year and I already want to upgrade to the new iphone.
It’s not that I don’t want an iPhone, as I might finally break down as the next version comes out if I’m in the country.
To me its really about making sacrifices to save some money over the long term.
Man, I had an iPhone and I dumped it for similar reasons. . . this is what I did. I cancelled my service to the iPhone (all services talk, text, and data). I was close to the end of my contract anyway, so the cancellation penalty was not much. Now I still carry the iPhone as essentially an iPod touch (just like you but the camera is a little better on the iPhone). I got a prepaid cell phone that I keep in my car for emergencies only. And now I use Google voice for nearly all texting and phone calls. And when I’m within wi-fi service (nearly all coffee shops and bars now) I can still text through the Google Voice app on the old iPhone.
That’s awesome Vic. I know that nowadays convenience for people is worth almost any price.
Its great to hear that someone else doesn’t mind wandering a bit for free wi-fi when they are lost too…
Interesting post! The $2000 saved is great, but I went another way - I’m with Verizon and have a Droid X, and pay about $70/month for it with the data plan. However, I’ve disconnected internet from my apartment - I was being charged close to $65/month for it, and I simply don’t need high speed internet when I live alone, when there are 5 coffee shops with free, fast wi-fi within a 2 minute walk (literally)!
That’s an idea I was thinking of doing, but for a long time my main computer was a desktop so that option wouldn’t really have worked.
I’m thinking once I splurge for a smart phone that could be an option. Thanks for sharing!
I’ve got a Blackberry Curve still, and it’s starting to die on me. The little trackball is sticking, and I’m getting frustrated with the interface. Finally my contract is up - so I’m thinking and battling in my mind at which route I would like to go.
I have an iPod Touch, but don’t know how I’d feel about carrying it with me everywhere - along with a phone. I like to be as minimal as possible. But, for that amount of savings - we’re usually likely to do a whole lot, aren’t we!
Haha, yeah. The convenience of having just one device when I finally get on the smart phone train will be nice, but for now? I don’t mind it.
Ha, good point. I recently went to an SEO conference and I was the only one without a smartphone. In fact I’ve been resisting buying one, but seeing as how I optimize websites for a living I need to start checking my e-mail all the time and maybe talk to American and other foreign clients through a Skype application, so today I have finally ordered a smartphone.
I found a good offer from my operator for a contract including internet traffic and the simplest, cheapest, most primitive smartphone that will serve me. It would be nice to have one with a better keyboard or a really large screen, but also much more expensive. So I’m replacing my current Nokia brick (one of those old phones that are just that, phones) with a more evolved Nokia and a different contract. Who needs games or watching video on the mobile phone? Not me! I think a lot of people (in my country anyway) buy iPhones mostly to show off. I’d rather save money and buy a beautiful evening dress.
That’s great Ioana. People get features they don’t really need or ever use. That’s why I carry two devices. I’d rather save money than have a bunch of “that would be nice’s” on my phone.
I’ve had the exact same flip phone as you, and it’s been 2+ years now (I actually like this phone a lot). I’m also an iTouch owner for just as long. I’ve got to admit that I’ve recently considered switching to the iPhone and I’ve found ways to have one for closer to $50 a month rather than $95 (I detailed this on my blog). I’m still on the fence as to if it’s really worth it to me to make the switch, but I think the positive impacts on productivity and conduction business using it will make it worth the cost.
I think the costs could always be justified for a purchase like an iPhone, but I think it really comes down to paying for convenience. Much like I want an iPad, but I have an iPod Touch and a Macbook Pro, so why do I really want an iPad?
I’m trying not to just pay for things out of convenience anymore these days.
Ugh…as much as I love my iPhone, this post makes me regret getting it even MORE! I used to have a $35-$40 Tmobile bill for several years, but nnoooooo I wanted to “get with the trend.” It has been a bittersweet purchase since my iPhone has helped me in MANY ways, but it just cost so doggone much to keep! Grr.
It might be intangible as to how much your iPhone has helped you, but if your life is better because of it, I wouldn’t “regret” getting it. If it is really out of your price range, just minimize your data plan coverage to 0 and you’ll be back down closer to $35 or $40 a month.