Cutting your expenses is a great way to keep more of what you earn. Sure, some people might say that if you just earn more income, then it doesn’t matter as much. While that may be true for some people, I like to watch my expenses so they stay under control and I definitely don’t like paying more for something when it’s unnecessary. I’d rather use my almost $500 savings and put it to work to earn more money.
My Verizon Wireless contract ended a few days ago, so I decided to make some changes to the plan to reduce the cost. Here’s how I saved money on my Verizon Wireless service.
My Original Plan:
I had Verizon’s More Everything plan with one phone and 3GB data.
Here’s how the costs broke down:
- $40 Line access charge
- $60 Data charge for 3GB
$100/mo total. That’s $1200 per year not including taxes and other fees!
What about Verizon’s Single Line Plan?
I looked into the single line plan that Verizon offers and even tried it briefly, but ultimately ended up not wanting it. The primary reason I didn’t go with the single line plan is that it doesn’t allow you to use the iPhone’s personal hotspot. I found this out after switching to the plan and my hotspot access went away. Sure, I could have jailbroken to get it back, but I just didn’t want to deal with that. I find that as I get older (and more busy) I just don’t want to mess with things like that as much.
The other part was that it still cost more than what I switched to. If I were in contract, I would be limited to this or the More Everything plan.
Here’s what the single line plan would have cost:
- $60 Line access charge
- $15 Data charge for 1GB overage (plan only includes 2 GB data)
$75/mo total so $900 per year. This would have saved me $300 per year.
I decided to go with Verizon Wireless Prepaid
Yeah, I know that sounds like I’m a loser who can’t pay their bills. Truth is occasionally I would miss the payment deadline and incur a late fee just because I was off traveling or something and not paying attention but I’m not factoring that into the math here because that was just my own stupid fault.
But guess what? Prepaid allows for tethering. It’s almost like they want you to use up your data so you can buy more. Wonder why they don’t have that on the single line plan? Probably because they want to force you into the more expensive, More Everything plan.
Here’s what the prepaid service costs:
- $45 Line access charge
- $15 Data charge
$60/mo total, so $720 per year for a total of $480 per year savings which is exactly 40% off what I was paying before. That’s huge!
Here’s how the data charge breaks down. With their prepaid service of $45/mo you get 500MB data which isn’t very much. However, if you sign up for autopay you get another 500MB for free, so you get a total of 1GB data. I then purchase 3GB extra data for $20 but the best part about that is the extra data doesn’t expire at the end of the month like it does with the other plans and is good for 90 days. So I get 4GB, out of which 3GB is available for nearly 3 months. My usage was just over 2GB so the extra GB will be split over 3 months. I did some fancy math and it comes out to about $15/mo of data, perhaps a little less even.
Not included in these calculations is the reduction in taxes. If the plan costs less, the taxes are also less which just helps to increase the savings. I’m guessing about $5/mo in tax savings also.
And if you want to save even a little bit more, one of those Capital One cash-back credit cards can save you another $7.20 per year.
Add up the tax savings and the cash-back rewards and I’m well over $500/year in total savings by switching to prepaid.
What Would You Do With $500 Year Extra Money?
I’d love to hear what you’d do with an extra $500/year.
Please leave me a comment below.