Can You Really Afford a Smartphone?

Can You Really Afford a Smartphone?Why in the world are smartphones so unbelievably expensive?  And it’s not only the phones themselves that are the problem, it’s the crazy monthly data fees that are creeping up every year.  I recently polled some friends and acquaintances to see how much they were paying, and what I uncovered is shocking.  Some of my friends are paying as much as $100 a month per phone for a family data plan.  I think that is bat shit crazy.  Unless my smartphone folds my laundry or babysits my kids, I would never pay that much for a phone or data.

 

High Prices Are the New Norm

If your cell phone bill seems like it is consuming more and more of your budget, you are definitely not alone. According to the Bureau of Labor Statistics, the average family is spending over 300% more on cell phones than they would’ve 10 years ago.  And while food, apparel, and entertainment spending have all decreased, cell phone spending has been increasing at an alarming rate.  What in the hell is going on here?

The answer is simple.  Cell phone companies have been able to continuously increase data fees because consumers are becoming hooked on their smartphones for Internet access, GPS functionality, work email, and entertainment.  We’re all a bunch of data addicts, and I am just as guilty as anyone reading this.  That’s why I was excited to find out about Republic Wireless.

 

Who Is Republic Wireless?

Republic Wireless is an internet based communications company that is based in Raleigh, North Carolina. I think they are going to put everyone else out of business….and fast. By using Wi-Fi hotspots as the primary method of smartphone talking, texting, and data functionality, they can drastically reduce their operating expenses and pass those savings right on to you.  The cool thing is that when you are not in a Wi-fi hotspot, Republic Wireless shifts your usage to the Sprint Network at no cost to you.

You’re probably wondering why I know all of these details.  The reason is because I am now the owner of a Republic Wireless phone.  The phone is great and I’m really happy with it. However, my favorite thing about it is the price.  This how it works:  For $19 a month, Republic provides unlimited everything and they never throttle your data connection. They do this by using Wi-Fi when possible for talking, texting and surfing. When you aren’t within access of a Wi-Fi hotspot, the phone works on the nation-wide network  just like any normal smartphone.

The only catch is that you have to buy a Republic Wireless smartphone to use the service.  There are currently two options:

  • You can buy a  mid-tier Motorola DEFY XT for $99 and pay $29 per month for unlimited data, text, and talk OR…
  • You can pay $249 for the same phone and pay $19 per month for unlimited data, text, and talk.

If you use your phone mainly to check email and occasionally surf the web like me, the Motorola DEFY XT would be perfect for you. Republic Wireless said that additional phones, including a high-end handset, will be coming later this year.

I personally think this is reasonable….especially if you are in the market for a new phone anyway.  I had (and still have) a dinosaur era antique Blackberry, and I was more than ready to upgrade my phone to reflect modern times.  But even if I wasn’t, the cost of the phone will easily be recouped after a few months of unbelievably low monthly bills. Since the plans are completely unlimited, I never have to do crazy things like manually count my text messages or refuse to call anyone for the last half of the month.  It’s awesome.

How much are you paying for your smartphone?  Do you know anyone who is paying a ton of cash for theirs?  How do you save on your smartphone plan?  Have you ever heard of Republic Wireless? Let us know in the comments below!  (If you want to sign up to try Republic Wireless for only $19 per month, you can do so here.)

 

 

 
About Holly

Holly Johnson is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly, Frugal Travel Guy, and U.S. News and World Report's "My Money Blog." Holly has been featured in the Wall Street Journal, Kiplinger Personal Finance, Fox Business, and Daily Finance.

Comments

  1. My family share plan (husband and I) is usually about $135 a month. I have a smart phone and my husband has a simple texting phone. My phone costs about $70 with “unlimited data.” -$30 for unlimited web/email access, $10 for 1000 text messages (never get that high), $7 for extended warranty, the rest in fees and taxes. I especially like the GPS function on my phone and the camera is better quality than my digital camera. My husband is the one that bought it for me…really for him because he is the only one that plays a ton of game apps. The battery sucks and we’re due for upgrades soon. I cringe at spending up to $200 for an upgraded phone with a better battery life to suit my husband’s needs.

  2. Currently my smart phone costs about $100 a month, which my company pays for so I went all out. I do have to say, after having a smart phone, it would be very hard to go back to a dumb phone. The added functionality is just so incredibly useful.

  3. I agree that family plans are crazy expensive. We actually use a family plan through my father in law’s work. There are five of us on the plan, everyone but my mother in law (because she rarely uses a cell phone). It works for us by reducing the costs by quite a bit and we’re still able to have a smart phone.

  4. Thanks for the alternative, but that phone… gah! I recommend the iPad Mini phone! I’m a couple of months in with my iPad Mini phone project and it is working like a charm!

  5. Sounds like you’re doing well! I’m on a family plan and pay $45 a month for my smartphone. If I didn’t have a business it’d be tougher for me to justify it but since I use it so much for business every day I have no problem paying for it.

  6. “Cell phone companies have been able to continuously increase data fees because consumers are becoming hooked on their smartphones for Internet access, GPS functionality, work email, and entertainment. ” You’re right on Holly! It used to be that you’d get charged for the calls & texts and data was unlimited. Now that they’ve hooked us, they turn it around and charge you an arm and a leg for the data. We know people who have one for all their kids plus a few iPads to boot…no thank you!

  7. This is an awesome suggestion! My wife and I are currently with Verizon, but I’ve been looking for an alternative. Until now, I’d been look at Straight Talk as the best option, but this honestly sounds even better. Have you guys had any issues with service? Thanks for the tip!

    • No, it works great. It mostly works on Wifi then switches back and forth onto the Sprint Network when you aren’t in a Wifi hotspot. It works great and the phone itself is great. Check it out!!! You won’t be disappointed. I have a link in the text that goes to their website =)

    • I was in the waiting line for a Republic phone for a long time. They eventually scrapped the waiting line and opened it to everyone but I developed concerns about service in that time. Obviously, you need to be in an area where you have a lot of wifi access – smaller towns or people who use phones mainly in the car are at risk of being kicked off (it currently is unlimited with no penalties for not offloading the majority of use to wifi, but that could change if people abuse the system). Also at the time (I haven’t checked recently) it wasn’t able to handle texting and photos. Republic opined that you should just use a texting app, which is fine if the person you are trying to contact has the same app but I’m not going to browbeat friends into downloading an app so they can text me. Has that changed? I think if you are in a metro area and not on the road much, it’s great but I use my phone mainly in the car picking up kids (who use phones mainly at school or on a bus) so I was worried we’d get flagged as naughty users.

      • Also, I forgot the biggest negative for us – they don’t have local numbers in all areas. I had to take a long distance number for a town an hour away. I was concerned some businesses and my kids’ school might not return calls if they had to call long distance. Huge bummer.

      • The way I understand it is that people can only get kicked off the plan if they use extremely excessive data outside of wifi, not just for regular use. I mean like downloading books every single day, etc.

        Texting works great without an app. You cannot text pictures though, which isn’t a deal breaker for me since that isn’t something that I do on a regular basis.

        Overall, I’m super happy with the phone and service. I haven’t had any problems with anything at all. I got a local number for my phone without a problem, but that could depend on your area so I could see where that would be a deal breaker.

  8. Ok, I guess we really are doing well with our whole pioneer living thing: I’ve got an old pay-as-you-go phone with no Internet access (and I’m perfectly happy with it), and Rick’s got a Nextel that his wonderfully frugal large employer provides him with for free. I’m a total cheapskate when it comes to smartphones and the like, and so is Rick. Spending $100 + a month on a cell phone seems outrageous to us! We spend about $100 a year total for text and talk capabilities. Then again, with your new info here, Holly, you’re making me think about a smartphone, if only for a moment. :-)

    • I am too cheap too, really. However, I can definitely swing $19 per month! And the other low cost providers are not unlimited data, text, and internet. That is a must for me.

  9. We pay about $120/month for our two smart phones with unlimited data. We get a pretty good discount based on my employer. Overall I like the idea of Republic wireless, but I am not sure how sustainable their business model is. If you aren’t around wi-fi all that much, you are costing them money because they have to lease their airwaves from Sprint. If enough people do this, they are going to have to raise their rates. There is a reason Boost, and Virgin Mobile cost about the same, and it is because they both lease their airwaves from Sprint and there is a similar cost for that. Not to be a Negative Nancy, but I wouldn’t be surprises if they end up just as bad as the other guys and slowly start raising their rates when they realize they can’t maintain profitability for $19/month. Now I hope I am wrong, but in the end, they are in the business to make money.

    • Negative Nancy! =)

      The cool thing about it, though, is that there are no contracts. If they were to raise their rates, which I actually doubt would happen for a long time, you could just switch to a different carrier and plan. And Wi-fi is EVERYWHERE these days. Aside from my car, I can’t think of anywhere that I go on a regular basis that doesn’t have Wifi. And I shouldn’t be on my phone while I’m driving anyway =)

      You should check it out, Brian! It sounds like you could save some money =)

  10. We have a family share plan, and the bill is around $160. It’s $10 more than originally intended since we had to buy Mr. PoP a texting plan because his coworkers are addicted to group texts. Ridiculous! Anyhow…
    We’re up for contract at the end of the year, and are definitely exploring options. But the only thing is, my office doesn’t have WIFI and won’t ever get it. Also our data connection is slow at home (as we’ve written about before), so we’d probably have to bump up the speed there which would be a $40 or so bite into the savings… So I’m not sure that a plan that relies super heavily on WIFI is going to work really well for us.

  11. I have a dumb phone and when I pay for my internet USB modem, that is also a SIM card, they give me free minutes so I use that to call, total cost $20 for the phone and $0/month for the minutes. Then an Ipod touch to do all the smart things from wifi hotspots. Those costs are crazy high, and the APR on the “free” phone as well.

  12. BF and I helped his parents with changing cell phone plans. They were spending way over $100 a month, but now they´re down to $35.
    I personally can afford my smarthphone as my monthly cell phone plan cost $17,50! :-D

  13. I’m just waiting for my Verizon contract to end. Hopefully Republic’s phone offerings improve in the meantime. :)

    • They are coming out with some new phones soon. Make sure to check with them before you sign up with anyone else! I personally love the phone I have with them, but I’m not super picky.

  14. This is awesome. Thank you for sharing. I have an iphone through work so I could careless how much they are paying for it but my wife just has a basic cell phone and pays $51 for just talk and text which I think is ridiculous. Anyways, I will definitely be looking into this for her.

    • Wow, really! It sounds like Republic Wireless could be a MUCH better solution for you! And she would have a lot more options on her phone, including internet access! Unlimited to boot!

  15. LeRainDrop says:

    I’ve got the iPhone5 with AT&T and pay $73.25 per month for Nation 450 with Rollover, Unlimited Data, and 1,000 text messages. My employer reimburses me for my data plan, so I end up paying $43.25 per month. It’s totally worth it to me, but I’d possibly reconsider if I were working for an employer who did not reimburse a portion. (Yes, Unlimited Data is for $30 per month, as I’ve been grandfathered in from the days of yore!) I do not know much about Republic Wireless, but I would swear I’ve seen something positive about it on another PF blog somewhat recently. My mom is actually in the market for a new phone/plan, as I’ve been telling her for months she is WAY overpaying (something like $80 per month for just talk and text), and Republic Wireless sounds like it would be a wonderful fit for her!

  16. I pay about 95 a month for my iPhone and plan with at&t. I have the lowest rate so I can’t go much further, but I have my own business so part of it is a write-off. I think my accountant will kill me if I cut more expenses out of my life…part of the reason I owed money this year. :( If my rates went up for some reason I’d consider getting something else, but overall I’m pretty happy with my ithings. :)

  17. Hmmm I wonder why I haven’t heard of Republic Wireless before? I figured it was just a matter of time before some companies start challenging the high prices of the major wireless carriers.

  18. Competition does wonderful things such as lowering prices for all of us. I hope they grow fast and change the industry.

  19. We’re working on an app, so we’re going to have to get a smartphone for the first time for business reasons! We won’t be able to get just any smartphone, but at least it will be tax deductible….

  20. When it was time to switch my phone, I actually only paid a penny for it on Amazon – I got an older model Droid, so the battery life isn’t that long (I have to charge it every day), but it serves its purpose and I pay a reasonable data rate. That’s great to know about Republic Wireless, though – if Verizon every jacks up their prices, definitely something to consider!

  21. My contract is up in January. Can’t wait. Still deciding between Republic and AirVoice, however. I’d really like to keep my current phone, but that won’t work with RW. Plus AirVoice is cheaper (at least in theory).

  22. That is incredible Holly, I have never heard of Republic Wireless, but if that are able to bring the price down for all other carriers that would be ideal. I think though that so many people love their iPhones and Androids and would even pay a premium to keep them. Maybe though Republic can lower the prices of Verizon and AT&T.

  23. I’ve never heard about Republic Wireless but it looks like a pretty good deal. Right now I get pretty lucky since my company pays for my smart phone, otherwise I would be looking into Republic.

  24. Great deal here, Holly. We’re paying $80 for two phones with data, unlimited text and never go over our minutes. It would cost us more, but we split a family plan and have a discount through my employer. I don’t pay for data on my phone because my employer provides it. But heck, $20 is a STEAL! Plus, I am always near WiFi, so this would be a sweet deal. Let us know how it goes!

  25. I pay a lot, too much, for my cell phone, but since I also use it in my business, I can at least deduct a portion as a business expense, thankfully! I have never heard of Republic Wireless, but can definitely see them catching on. Are they nationwide? Cell phone companies need more competitors because we are getting robbed!

  26. I actually do not even own a cell phone right now and the one I had last year was a Nokia that was 5 years old. The expense to carry one is very high and it is so much easier to live with out it. I can talk to and email people when I get home.

  27. That’s awesome. Ours are about $65/mo, but we have our data set really low. We use Wi-Fi to connect wherever we can, and we never go over. You might not get a free phone with these guys, but the one time investment sounds more than well worth it. You’d make up the difference in just a couple of months. Are you finding the coverage to be pretty good?

    • Yes. I used it all over the place today (places with and without wifi) and didn’t notice any change in coverage. So far, so good!

  28. I only pay $20/mo for my cell phone because im the 4th add on to a Verizon family plan. I would totally make the switch to RW if my current plan wasn’t so gosh darn cheap. Im also interested in FeeedomPop, that’s a cool solution as well.

  29. I am actually just about to try out their service. Their headquarters is right near me, so I figured I would give it a shot. I don’t like how you can’t send MMS texts, but since I don’t do that often, it should be ok. I have heard that they will be offering more phones come with summer, some with 4G capability. I might wait until then.

  30. I think we may be one of the few families left in America who hasn’t upgraded to a smartphone yet. I’m not sure why…I just can’t bring myself to pull the trigger. We have four phones on our plan and pay about $100 a month for that.

  31. I totally agree. The price to just have a smart phone these days is crazy. I have downgraded my plan from $95 a month to about $63. I’m still trying to find ways to lower that though. Great post!

  32. I don’t own a smart phone, never have and the wife has a cell phone but just a standard phone we pay around $30 a month for. It’s mainly for emergencies but she has no desire for a smart phone. A 3 year plan on an Iphone with a small data plan was $55 plus tax but she declined when I called last week to renegotiate our cable, phone, internet, cell bill. We are surrounded by the internet everywhere we would have no use for it. I bet it’s tough to turn back once you have one though.

  33. My smartphone costs me nothing as I need it for work, and I imagine I’ll probably always have work-provided phones as long as I’m in this kind of industry.

    My partner has to pay for his though, and the high costs really concern me, in particular the replacement costs. Phones just don’t last very long these days and usually need repairing re refurbishing at least once at some point. His iphone 4 is a couple of years old and it’s still going, but has quite a few problems (and that seems to be doing WELL by the usual standards).

    Is paying $800-1000 for a new smartphone every couple of years going to be the new norm?!

  34. I get good value from my phone because I get a big discount with my workplace. It helps a lot to keep the costs down. Smaller companies have been popping up and offering good deals, though, so if ever I lose my discount I’ll be looking into them.

  35. I purposely held out for a looong time before turning to the dark side and buying a smartphone. Now because of the nature of my work, I can’t imagine not having one but I also work hard to keep things to a “reasonable” $85/month…blech :)

  36. Ah, so this is not one of those bring-your-own-phone plans.

    This is probably a phone you’d get for free with a contract, so having to pay the $100 or $250 upfront isn’t that big a deal. If I were in the market, I’d be indifferent between one of those deals and a normal contract paying $40 or so a month — which is really only possible with a big family plan anymore.

    Good find.

  37. I think smartphones are a classic example of lifestyle inflation. That said, I’m totally addicted to mine!

  38. I still have a dumb phone, but my contract is up in July and I am looking for alternatives. I will check this out and hope it is available in the boonies.

  39. might go with the unlocked smartphone route: $300 Nexus 4 with the $30 prepaid monthly T-Mobile 100 talk minutes, unlimited texts, data capped at 5 GB, per month. Also, look for a used Nexus in eBay.

  40. Yes, I had heard of Republic Wireless and am on their mailing list, but I did not want a limited choice in equipment, and I pay less than $19/mo for service. We use prepaid phones in our household, which I buy new on eBay, and use PagePlus Cellular for service. We previously also had STi Mobile and PlatinumTel phones, but the latter switched to the T-Mobile network (useless to us – that phone was a total waste of money) and STi – which was great and served us for around 5 years – is likely coming to an end. Those were on the Sprint network, which I liked having as backup.

    I’m on my second Android phone, and I don’t pay for data for internet because I use WiFi. The Android smartphones have cost $300ish, but since I personally spend about $11/mo for all cellular usage, I don’t care at all and enjoy “sticking it to the man” – which means every contract cellular company.

  41. Does that model of Motorola DEFY XT have a mini-Sim or Sim card by any chance? If it did at least then you could expand your options for devices.

  42. Hi Holly,
    Yes, Smartphones are indeed expensive but very functional. You’re most of the new models of mobile gadgets are quite pricey. You can get these for as long as you can afford the phones. The ordinary phones will do if you do not need all those high-tech functions.

  43. I’ve been with sprint for 13 years and a Rebuplic Wireless customer for 2 days and already I know that I will be leaving sprint next week. No more 2 year contracts! PBONE WORKS GREAT! I was a HTC EVO user and the defy is just smaller but works the same if not better. Twitter, YouTube, Facebook, instagram, Pandora, banking aps,etc. They all work the same!

  44. Alicia Chandler says:

    I’ve been watching Republic for a while, and am finally ready to take the plunge. Would you mind sending me a referral link? You can use the email addy I used to post… that would give us both a $19 credit, since they have that promotion going on now!

  45. Jim Connor says:

    I have been using Ting wirelss for the past 5 months and love it. I paid very little up-front for an Android smartphone and I pay only for the calls, texts, and data I use – in three seperate buckets, so you don’t pay for what you don’t use.

    My monthly bill went from $80 on Verizon to less than $20. And so far the customer service has been outstanding. I really love the company and the coverage – they are built on Sprint’s network primarily, but use Verizon for roaming, so I have coverage everywhere. Here’s a link if you want to check it out.. https://z7rdoo6l51.ting.com/ (Full disclosure – this is a link with my referral code in it, which will save you $25, if you don’t want to do that, just search for Ting.)

  46. Actually, I read this on a Republic phone. I’ve gone from $61.18 on Cricket—which is antiquated—to about $34. That’s an extra half week of groceries.

  47. Hey Holly, I’m guessing your still loving this service?

    I think this will be excellent for when I go to Guatemala this summer for 6-8 weeks — since it works through WiFi I guess it will be like I’m taking incoming calls from the U.S. (as long as I can find wireless there).

    I’m paying $50/mo. through a company called Solavei, but there is something in me that LOVES having a deal that’s cheaper than all my friends and just as good or better!

    I’m assuming that the phone is decent as well? I mean, it’s not like it’s an old model or anything…

  48. I was always reluctant to get a cell phone to begin with, and extremely reluctant to get a smart phone but now I don’t think I could ever go back. The navigation gets used the most…I don’t know how I ever got around using printed mapquest directions back in the day! My husband and I have Verizon and we pay about $175 for a share everything plan including 6 GB data because my husband plays a stupid game that uses up so much data. Even when he quits the game, we’ll be paying $155 for 2 GB.

  49. Still no “smart” phone for me. A cell phone with a slide out keyboard for texting is all I need. I’ve been using computers and technology for 20+ years, and am continually amazed that people are so infatuated with their cell phones. I spend 10+ hours in front a screen each day, the last thing I need is a portable screen to spend even more time staring at pixels.

    The worst, however, is parents at restaurants with kids staring at a tablet or phone the whole time, completely disengaged from their children (and often each other).

    And if you lose one of these phones, you’ll quickly learn it costs $600 to replace. My phone costs $30 to replace.

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Trackbacks

  1. [...] at Club Thrifty asks a legitimate question: Can you really afford a smartphone? If you have a traditional smartphone plan you definitely know why she asks the question. [...]

  2. [...] cell phone shopping and looked around online to see what was available first.  Although I love my Republic Wireless cell phone, Greg decided that he wanted a phone on the Verizon network.  He also wanted a different phone [...]

  3. […] you’re interested in getting an inexpensive smartphone, read my review of Republic Wireless here.  Better yet, use my referral link and sign up for Republic Wireless […]

  4. […] 401K match, profit-sharing, paid vacation, employer-sponsored income insurance protection, and company issued smartphone are a thing of the past.  Luckily, I have thought out all of those things and I will be writing […]

  5. […] what’s great about getting the Moto X through Republic Wireless is that they’re so much cheaper than they’re competitors.  With Republic Wireless, […]

  6. […] limited on phone choice up here, but Club Thrifty raises a good point – smart phones are expensive. I wish we had some of the cheaper options they lay out in the […]

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