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How We Shaved 75% Off Our Cell Phone Expenses by Ditching Service Contracts

It’s been almost a year since my wife and I started our phone experiment, and I’ve told enough people about it to warrant a proper description for how we dumped our service contracts and are now paying about $10 a month for our iPhones. Before I jump into it, though, a little background. We were on Verizon paying upwards of $85 per person for our Blackberry data service. We realized that we rarely used the phones for calls, only texted minimally, and primarily used the phones’ internet service to settle arguments of fact at the bar and other non-essential activities. That, combined with the fact that were in range (or in close proximity to) of wireless networks for about 18+ hours a day, made the iPhone seem like an interesting alternative to our expensive Blackberries. Megan started doing some research to come up with a game plan to set us free. Here’s what we did:

1. Cancel/Suspend Current Service: We had about six months left on our Verizon contract, but we didn’t want to wait. We put our contracts on “Vacation Hold” (easy to do if you call Verizon customer service and tell them you’re leaving the country) for a couple months while we experimented. The hold doesn’t count in your contract months, so we still had to pay the full contract termination fee when we ultimately closed out our accounts — which we estimated we would recover in less than six months on the new plan.
2. Get a Google Voice Number: Google Voice allows you to set a permanent number that you can forward to any land or cell line. I won’t go into all of the features here, but Google Voice seems to be one of the most stable of these kinds of services, and it’s been a game-changer in the communications industry. With Google Voice, you can receive phone calls, voicemails, and texts at that number you choose — all of which can be accessed and managed online. Google Voice is not a VOIP service like Skype - yet. There is a fee for international calls using GV. Think of it as a portal between you and your phone devices. One number for everything. Plus, most of the texting I do with friends is via the Google Voice online site (for free!), saving money on texting by allowing us to communicate via the web instead of the phone. 
3. Purchase an Unlocked iPhone or Unlock it Yourself: Seems risky, right? It’s not that difficult to unlock yourself, but we didn’t feel secure in our hacking chops to do it on our own. We bought a couple unlocked 2nd generation iPhones from reputable eBay sellers for about $225 a piece. But isn’t t it illegal? Nope.
4. Sell Your Smartphone: We just about covered our expenses on the new phones by selling our Blackberries on Craigslist and eBay.
5. Drop a T-Mobile SIM Card in Your iPhone: You can buy a SIM card from T-Mobile that you can refill as needed. We purchased $10 sim cards and added $100 worth of credit valid for one year. When you do that, you get a number on the T-Mobile network and basically pay T-Mobile’s standard per-minute/per-text rates for calls you make and texts you send and receive.  You’ll want to make sure you have reasonably good T-Mobile coverage in your area, but we have had no problems in NYC and other places we’ve visited.
6. Forward Google Voice to Your T-Mobes Number: As I mentioned, Google Voice allows you to ring a particular phone, so set your T-Mobile number as the primary phone to ring. You can also set Google Voice to ring different numbers at different times or multiple phones at the same time. For example, you could set your Google Voice number to ring your office phone during times when you’re at work if you want.
7. Distribute Your New Google Voice Number: This is an optional step, but if you send out an email to close friends asking them to text/call you at your new number, each person will be automatically assigned a 406 area-code number that you can add to their contact information in your phone. Texting or calling people at that unique 406 number will make it so your Google Voice number shows up instead of the T-Mobile number. Of course you can always call or text directly from your phone to any number and your T-Mobile number will show up. The easiest way to get everyone’s 406 number is to send out texts to everyone via the Google Voice site (because it’s free) asking your friends to confirm that they have your new number. You don’t need to tell them why.
8. Embrace Wireless Networks: Between the 8 hours we’re at work, and the time at home, we have wireless signals almost 24/7. Plus, in NYC we have access to a lot of open signals around the city. The WiFi Tracker iphone app helps find open and closed signals wherever you are, and we use it regularly instead of the iPhone “Settings” feature to find an open signal. 
9. Install Google Voice and Skype Apps on iPhone: When you don’t have a 406 number for a contact, the Google Voice app will allow you to make calls to friends using your GV number. We also pay the minimal monthly cost to Skype ($3 or something like that) to make unlimited Skype calls using our account. This allows you to call someone’s cell or landline using Skype via the iPhone when you have wifi. Easy peasy, though they might not recognize your Skype number when it comes up. You can also purchase yet another number from Skype if you really want your friends and family to know it’s you calling.

That’s all there is to it. Granted, this isn’t an option if you’re someone who feels like you need to be tethered to the internet 24/7. We’ve had a number of times when we’ve wished we had access to Google Maps walking around the city, but there are also offline maps applications you can download and access whether you have a wireless signal or not.  The bottom line is that we realized we didn’t need the 24/7 access to the internet we had previously assumed was a necessity, and 18+/7 seemed like a worthwhile sacrifice to save thousands of dollars per year. Bottom line - our bill went from costing us over $2000/year to less than $500/year.