When the iPhone first came out several years ago, my husband decided that he needed a single device to streamline his life. Since we are dyed-in-the-wool Apple users, we looked into what it would take to get him set up with an iPhone. After one horrified look at the price of changing service (we were not with AT&T), plus the price of the phone, plus the price of the data plan, we backed away slowly and figured out how to make do with a Blackberry even though it was still ridiculously more expensive than the previous phone and plan that my husband had.
Smart Phones are incredibly convenient, a lot of fun, and a great way to stay connected. What they are not is cheap. However, since you end up paying for them in bits and pieces, it can be hard to know exactly how tough your constant connectivity is on your budget. Here is a breakdown of what you can expect to pay for your Smart Phone:
Back in the bad old days, when cell phones supplemented home phones, I made a decision that I would never personally pay for a cell phone. At the time, every single provider would give you a decent free phone as long as you signed up for a two-year plan. In recent years, it’s been harder and harder for me to stick by my decision.
While all four of the major services providers (AT&T, Sprint, T-Mobile and Verizon) have Smart Phones available for basically free with a contract, many of the more desirable phone types will cost you in addition to the contract—anywhere from $19.99 to over $500. Most Smart Phone users think of this purchase cost as the “only” cost for their phone, so there aren’t as many surprises here.
For all four of the major providers, it makes the most sense financially to sign up for a two-year plan. Unfortunately, that means you will be hit with a steep fee if you choose to end your association with the provider. Each provider offers its own version of unlimited talking, texting, surfing, etc. For T-Mobile and Sprint, there are plans that cover unlimited everything including data, while Verizon and AT&T offer talk plans with data plans on top. The least you can expect to pay per month for all of the data you need will be $80/month (and that is the T-Mobile price). Remember, too, that on top of your monthly plan you will pay surcharges, taxes and fees.
Data Specific Charges
For AT&T and Verizon, data charges are levied on top of the plan you sign up for. While each of them offer unlimited data plans, AT&T also offers pay-as-you-go data options, and Verizon will discontinue their unlimited plan later this year in favor of pay-as-you-go. These plans (unlimited and à la carte) will add an additional $15-$80 per month to your cellular bill.
The bottom line is that your connectivity can cost you an additional $20-$500 initially, and an additional $15-$80 per month. For me, it’s not worth it to always be able to stay online anywhere—but then my career doesn’t depend on it. Even if yours does, make sure you’re absolutely clear on how much your Smart Phone will cost you. Because spending this kind of money so that you’re always able to update your Facebook status just might not be worth it.
David’s Note: I have an iPhone, and though I managed to come up with a few good reasons (excuses!) on why I need one, the fact of the matter is that the $100 dollar monthly cell phone bill that my family pays for is a lifestyle choice that is coming out from other parts of our budget.
Don’t get me wrong. The connectivity of my phone enables me to essentially take care of my business wherever I am, but don’t make a mistake thinking that all this convenience comes free. You are paying for a smart phone one way or another.
You never needed the smart phone before, so if you want one now, simply pay for it.