Dave's Being Frugal thread #1 - Trimming your phone cost

[DaveInAZ]

Every so often in posting on MyFico I get sidetracked by discussions on how much money some folks waste on things. So I decided to try a "Being Frugal" thread.

I’m a fan of being frugal. Being “frugal” to me is questioning if the cost of something is worth what it will do for me. Let’s start with the easy thing to trim – your monthly phone service:

While I love technology and staying on top of tech is a hobby of mine, I didn’t get a smart phone until the fall of 2014. The reason? I just don’t talk that much by phone, even less by cell phone - I just don’t feel the need to being in touch 24/7. I got rid of my landline 10 years ago. I’ve had VOIP line since then (VOIP = Voice Over Internet Protocol, aka internet phone service.). An adaptor connects to my router and then to my cordless multi handset home phone system so I can use it anywhere in the house. My cost? $7/month for 200 minutes incoming/outgoing calls anywhere in the U.S.. It’s just $.01 cent per minute over that, but I’ve never gone over the included minutes. So if you have landline, more expensive unlimited VOIP service, or even unlimited talk time cell service you might consider if you really get your money’s worth from that. Goggle “VOIP service” to see many options. You might also consider Google Voice, which gives you a phone # for VOIP serice. if you really want to know which specific service I use PM me.

When I finally decided to trade my basic clam shell cell phone for a smart phone I chose Android and Tracfone pre-paid service. Tracfone’s basic pre-paid service is a $20 card that keeps your service active for 90 days and gives you 60 minutes talk time, 60 text messages, and 60 mb of data. But for smart phones Tracfone triples that to 180 minutes/text/mb of data. I figured that would work for me, and it has – I’ve never gone over included talk time, but I do occasionally need more data when I’m away from my home network or WiFi hotspot; $10 for 1 Gigabyte of extra data is easy on my budget. Another consideration in choosing my mobile carrier is which network it uses. I live in a rural area where Verizon has the best coverage, AT&T is good, Sprint is very spotty and isn’t available in many areas, and others are non existent. In my area Tracfone gives me Verizon service, at a fraction what Verizon would charge me. If you live in an urban area, most “most major carrier” networks – Verizon, AT&T, Sprint, T-Mobile and US Cellular – offer comparable quality service in most urban areas.

If you’re a busy executive or affluent and just can’t live without someone not being able to call you anywhere anytime, then perhaps the major carrier unlimited plans work for you. But if you can get by with less talk time or less data, than perhaps service from a MVNO might work for you – Mobile Virtual Network Operator. MVNOs don’t have their own cellular network, they use the networks of the major carriers to provide your connection, usually at a much lower cost.

All the major carriers have low-cost spinoffs, and their deals are worth checking first. AT&T runs Cricket Wireless. Sprint has Boost and Virgin. T-Mobile owns GoSmart and MetroPCS. Verizon has only lower cost prepaid plans. If you're looking for a wide range of stores and solid customer service, these brands have excellent prices & service. There are also many MVNO services not associated with a major carrier, like Tracfone or Google FI (which only works on certain Google phones). But first you must consider if your mobile phone is “locked”. While you can easily find and buy unlocked phones, if you bought your phone through a carrier contract, that phone is locked to that carrier until you have fulfilled that contract. All mobile phone services check the “serial number” of a phone you want to bring to their service to see if it is available to switch carrier. This is usually IMEI - International Mobile Equipment Identity. You can find your IMEI in your phone’s settings.

A second major consideration is which cellular network your phone uses. There are two types of cellular networks: CDMA and GSM. Sprint, Verizon, Boost Mobile, U.S. Cellular, and MVNOs which use their networks use CDMA. AT&T, T-Mobile, Metro PCS, Cellular One and MVNOs which use their networks use GSM. While many phones, especially those originally sold & marketed as “unlocked” are dual band and work on either CDMA or GSM, most phones sold by carriers and MVNOs will only work on either CDMA or GSM. Many carriers & MVNO’s offer BYOD service – Bring Your Own Device. You enter your phone’s IMEI and they will tell you if it will work on their service.

My first smart phone was a  Tracfone very basic LG model. While I waited forever to get a smart phone I was quickly smitten with the “it’s effing amazing what all these things can do!”, even though talking remains the least thing I use my smart phone for. My first phone lacked NFC – Near Field Communication – for contactless payment, and more importantly didn’t have a high definition display. While my TV is a “smart TV” with internet connection and streaming apps, I more often stream via my phone, sending the video to my TV via Google Chromecast, so without a HD phone display I couldn’t stream in HD. I checked new Android prices, and again this is where my frugalness comes in. My 6 year old Vizio HDTV was starting to go, you had to power up & off a couple times to get a picture. So on Slickdeals I found a Cyber Monday deal – a 50” Hisense 4k UltraHD smart TV for only $300. So, am I going to spend more than twice that amount for a new smart phone that I would use far less often then my TV? No, that would offend my frugal sensibilities. So I bought a used LG G2 off eBay for $50. The seller had listed it as a Verizon branded phone with contract fulfilled and now unlocked. And she included the IMEI in a pic. So, I entered the IMEI on Tracfone’s BYOD page and saw it was good to go. I just had to buy a SIM card from Tracfone for a buck, to enable the phone to use their service.

And one last thing: Remember my VOIP internet phone service? My service and many other VOIP services now offer a mobile app, including Google Voice. Download the app, connect it to your VOIP service, and you now have a 2nd option for talk time on your cell phone. And it uses data instead of your talk time, at much less expense. Only close friends & family get my cell phone #, everyone else gets my VOIP # which I can answer at home or anywhere else on my cell phone, without using the cellular talk time. And when I call on my cell phone I consider who I’m calling. If I’m calling customer service where I’ll spend a long time on hold, I call using my VOIP app and save my cellular talk time for more important things.

Are you frugal? Frugal, as in questioning if the cost of something is worth what it will do for you? Examining what you pay for what your get vs. what you really need can save you some major bucks.

Next Frugal Thread, if this one is well received, is one of my favorite topics: Cutting the cord. I haven’t had cable/satellite TV service for almost as long as I’ve gone without a landline, and I get all the TV I want or need by antenna and internet streaming.  

[Gunnar419]

DaveinAZ, thank you for this. It's very good information.

I'm also a practicing frugalista. I use TracFones (and like you give them very little use). I never had to "cut the cable" for TV service because I never had it in the first place. My rock bottom $40/month internet contract takes care of everything I need from email to streaming video. I bought an old house with no mortgage. I have no car payment. I shop at thrift stores and garage sales, etc.

So I'll be looking forward to anything you have to write on the frugality topic.

[DaveInAZ]

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@Gunnar419 wrote:

DaveinAZ, thank you for this. It's very good information.

I'm also a practicing frugalista. I use TracFones (and like you give them very little use). I never had to "cut the cable" for TV service because I never had it in the first place. My rock bottom $40/month internet contract takes care of everything I need from email to streaming video. I bought an old house with no mortgage. I have no car payment. I shop at thrift stores and garage sales, etc.

So I'll be looking forward to anything you have to write on the frugality topic.

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Thanks, fellow frugalista.

My ex-wife cured me of garage/yard sales, she couldn't pass one without having to stop & check them out, and we ended up with a bunch of other people's junk. I'd never shopped at a dollar store until I bought my place in a rural area outside of Tucson, but the nearby small town has a Family Dollar and I shop there now regularly, great prices on household supplies & dog food & treat. And my Barclays Rwards MC even codes any purchase there as 'groceries' for 2% rewards, even though I don't consider their selection of Chef BoyRdee as "food", lol.

I didn't have a car payment for years, I bought my 2003 Kia Sorento SUV new, with cash. But by 2015 it was getting up there in age & miles and didn't get very good gas mileage. So I bought a 2nd car, a 2013 Mazda 2 Hatchback from Hertz, a used rental car. Best car buying experience ever. Great "no haggle" price, price posted is what your pay. And you reserve it for a 3 day rental, 3 days to check it all out. If you just don't like it for any reason just take it back & pay the rental fee, but if you buy they waive the rental fee. A small local credit union gave me a 60 month loan for 1.99%; I always hated car payments but don't mind this one with only a few dollars intererest each month, and preserve my rainy day savings. I still have the Kia for when I need to haul something big or a lot of people, but when you live in the boonies you drive alot, I get around 40mpg on the Mazda.

Internet video streaming is great, but I think a lot of folks overlook how great free broadcast TV by antenna is. The digital signal is much better than the old analog, no more fuzzy picture, you either get a great picture or none at all. I get  dozen channels by antenna from Tucson, the 4 major networks + independent channels. I like PBS, I watch the PBS Newshour plus BBC World News right before newshour for good international news coverage. The only sport I like is football.. Free network broadcast TV is good for NFL & college games during the season, but $#@! ESPN has bought up rights for most college bowl games. So mid December-January I pay for a month of Sling stream service with ESPN for $25, and than cancel, no contract - every other channel in Sling's basic lineup are channels I never watched when I had satellite. It includes CNN and I could have watched 24/7 non stop coverage on that missing Malaysia airlines plane, but I passed . . . .

[Gunnar419]

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@DaveInAZ wrote:

And one last thing: Remember my VOIP internet phone service? My service and many other VOIP services now offer a mobile app, including Google Voice. Download the app, connect it to your VOIP service, and you now have a 2nd option for talk time on your cell phone. And it uses data instead of your talk time, at much less expense. Only close friends & family get my cell phone #, everyone else gets my VOIP # which I can answer at home or anywhere else on my cell phone, without using the cellular talk time. And when I call on my cell phone I consider who I’m calling. If I’m calling customer service where I’ll spend a long time on hold, I call using my VOIP app and save my cellular talk time for more important things.

 

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BTW, that's a great lifehack and one I never would have thought of.

I'm also with you in noticing how freely so many other people spend money. I try not to be judgmental because when I was younger and better paid I blew every cent I earned on things that seemed important at the time and now seem superficial and transient.

OTOH, even in those days, I perceived the problem of making big monthly payments on things, like cars, that were constantly dropping in value, or on gambling, or on spending big money partying.

The main thing I've discovered over time is that it's not about whether you're cheap or a flamboyant spender. It's about whether you get VALUE for your hard earned money. A penny pinching person who constantly schemes about how to save a dollar is just a mirror image of the person who never thinks about the value of money at all. The real trick, and the real joy, comes from having what you need and enjoying the life your money buys you, whether you're a millionaire or a thousandaire.

[Gunnar419]

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@DaveInAZ wrote:

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I didn't have a car payment for years, I bought my 2003 Kia Sorento SUV new, with cash. But by 2015 it was getting up there in age & miles and didn't get very good gas mileage. So I bought a 2nd car, a 2013 Mazda 2 Hatchback from Hertz, a used rental car. Best car buying experience ever. Great "no haggle" price, price posted is what your pay. And you reserve it for a 3 day rental, 3 days to check it all out. If you just don't like it for any reason just take it back & pay the rental fee, but if you buy they waive the rental fee. A small local credit union gave me a 60 month loan for 1.99%. I still have the Kia for when I need to haul something big or a lot of people, but when you live in the boonies you drive alot, I get around 40mpg on the Mazda.

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That sounds great!  I haven't had a car payment in two decades, but I've also owned some crappy cars. I'm now considering a newer used car, something small but reliable (a Yaris or a Fit, maybe). Having a monthly car payment would be a shock, though, after so many years without one!

I didn't know that about Hertz and will look into it.

[Anonymous]

Fun post.  We live in  small town also population under 4,000.  It has an Ace Hadware and over priced grocery along several good eating places.  County Seat is 15 miles away and has all major stores. We have become masters of free 2 day on line shipping. We found by buying on line we can get it cheaper and with the free 2 day shipping its as fast as going to the store. Also many times no sales tax. 

[DaveInAZ]

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@Gunnar419 wrote:

That sounds great!  I haven't had a car payment in two decades, but I've also owned some crappy cars. I'm now considering a newer used car, something small but reliable (a Yaris or a Fit, maybe). Having a monthly car payment would be a shock, though, after so many years without one!

I didn't know that about Hertz and will look into it.

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Hertzcarsales dot com. Other rental companies have car sales sites and I looked around and prefered the selection & prices from Hertz. One to 2 model years old, 10k - 40k miles, well maintained, and 30% -40% discount over buying new. Check their prices on KBB.com, Kelly Blue Book.

[DaveInAZ]

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@Gunnar419 wrote:

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@DaveInAZ wrote:

And one last thing: Remember my VOIP internet phone service? My service and many other VOIP services now offer a mobile app, including Google Voice. Download the app, connect it to your VOIP service, and you now have a 2nd option for talk time on your cell phone. And it uses data instead of your talk time, at much less expense. Only close friends & family get my cell phone #, everyone else gets my VOIP # which I can answer at home or anywhere else on my cell phone, without using the cellular talk time. And when I call on my cell phone I consider who I’m calling. If I’m calling customer service where I’ll spend a long time on hold, I call using my VOIP app and save my cellular talk time for more important things.

 

---

BTW, that's a great lifehack and one I never would have thought of.

I'm also with you in noticing how freely so many other people spend money. I try not to be judgmental because when I was younger and better paid I blew every cent I earned on things that seemed important at the time and now seem superficial and transient.

OTOH, even in those days, I perceived the problem of making big monthly payments on things, like cars, that were constantly dropping in value, or on gambling, or on spending big money partying.

The main thing I've discovered over time is that it's not about whether you're cheap or a flamboyant spender. It's about whether you get VALUE for your hard earned money. A penny pinching person who constantly schemes about how to save a dollar is just a mirror image of the person who never thinks about the value of money at all. The real trick, and the real joy, comes from having what you need and enjoying the life your money buys you, whether you're a millionaire or a thousandaire.

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When I looked over cellular plans to me talk time is the most over priced feature while data is often the most reasonably priced feature. And since I've had my VOIP service for 10 years and so many folks have the #, and $7/mo. is frugal enought for me that I haven't looked into Google Voice much. But I checked it out this afternoon and I think it's a good solution for most folks as it's free, while you have to buy a VOIP adapter for VOIP service. Google Voice gives you a phone # for free, it made sense to me to choose one in my area code, but you can choose any US area code. Then you download the Google Voice app for free on either Google Play for Android or iTunes for iPhones. Calls within the U.S, are free, so with Google Voice you can call on your cell phone for free while on home internet or WiFi hotspots, or minimal expense using your carrier's data while on the go.

Yes, I sure blew enough money on stupid things when I was younger. And very well put - It's about whether you get VALUE for your hard earned money.

[Revelate]

Interesting post, hadn't really considered MVNO's though I was going to simply be buying a new phone and likely switching to TMobile for their international support.  Wish Apple SIM existed in the iPhone line, huge missed opportunity for me unfortunately.

I don't mind a one time expense for a phone (which I buy roughly every 3 years on average amortized over 36 months or whatever), but I'm irritated of the money I've paid to Sprint and when I really needed a stepped up service it wasn't there.  Live and learn I guess.

Will be interesting seeing the rest of your posts, I don't consider myself frugal as when I do decide to buy something I usually buy on value, I just buy so little in comparison to the overwhelming majority of folks it doesn't register in the long run (amortization is fun!).  Would be interesting to see a budget post which I haven't seen here, that might drive the conversation faster in terms of seeing other people's lifestyle and realizing what can be changed / fixed.  Maybe I'll try that when I have more time if nobody beats me to it haha even if the next year isn't representative of a real budget for me (reimbursed expenses are playing havoc in YNAB given I can't carry over deficits month to month, oh well haha).

[UncleB]

I try to be frugal as well... "back in the day" I had the $200/month cell plan, but when things fell apart that was the first thing to go, and I picked up an AT&T GoPhone.  I admit at first it was a bumpy transition (years ago AT&T's coverage was markedly different from Verizon's in my area), but now it works out quite well.

I've now been with GoPhone for over a decade, and I have no plans of leaving them (although I can leave anytime since there's no contract).  I can put $100 on the account and it will last me for months, and I almost always get a 'deal' even on that (I used the Newegg Amex Offer for my last $100 load).  I use WiFi exclusively, and in the event I need "real" internet I can let them deduct $1 from my balance for a 100MB "day pass".  It's not extravagant, but WiFi is nearly everywhere I go, and it works well for my needs.  I kept using my flip/feature phone until I decided I really wanted to try banking apps... LOL.  FWIW, that old phone still works - I keep it now as a backup. 

I try to use at least one coupon on every grocery store/Walmart run, and I check out the clearance rack everytime I go by Belk or Macy's; this allows me to dress better than I would be able to otherwise.  I will be the first to say it's not for everybody (especially those who are extremely busy) but I actually find it to be enjoyable, and I tend to make a game out of it... I'm always trying to see how much I can save, or how good a deal I can find.