Buy Like Buffett: Save Money on Cell Phone Plans

Most of us could not make it through our daily lives without a cell phone. Making calls, texting, and surfing the web are so much more convenient with a cell phone. All of that convenience does come at a price. Cell phone companies are increasing the prices on a number of different services including data plans, premium content and early termination fees. These fees can take your cell phone bill from a small expense to a major headache.

Here are three ways that you can save money on your cell phone plan.

1. Find a carrier that offers an unlimited plan.
   
   There are still millions of people that are not signed up for an unlimited calling plan. If you don't have an unlimited calling plan by now, you are probably paying too much. Every major carrier offers an unlimited plan and most charge between $49.99 and $69.99 for the service. Unlimited calling packages save you from having to pay overage fees and roaming fees. Cell phone companies make a lot of money off of callers that go over their allotted minutes. An unlimited plan protects you in case you, your son or daughter goes over their minutes. Having an unlimited plan just makes good financial sense. Why pay extra money just because you stayed on the phone a little longer last month?


2. Skip the cell phone insurance coverage.
   
   Cell phone insurance coverage used to be a good thing. For a few bucks a month, you could buy coverage that would protect you in case of theft, damage, or loss. This was a good deal because you could protect your $300 phone for $50 or $60 bucks a year. Well, not anymore! Cellular phone service providers have come up with a way to trim their costs on customers filing insurance claims. Say hello to insurance deductibles. Now if you want to protect your phone, you have to pay a monthly fee and a deductible. Monthly fees typically range from $4.99 to $5.99 and deductibles can cost anywhere from $90 to $130. You could end up paying over $200 a year to insure a $200 phone. This is pointless. There is no need to buy insurance if your carrier has a high deductible plan. Save yourself some money and skip the insurance option.


3. Watch out for termination fee increases.
   
   Most cell phone carriers have early termination fees for customers looking to break their contracts. Fees used to range from $175 to $200 bucks. Some of these carriers have fees so egregious that they will make you stay through the life of your contract. For example, the new iPhone 4 has a $325 early termination fee. Verizon's early termination fee is even worse. Verizon charges a $350 early termination fee on its smart phones. That's a serious hit to your wallet. Customers should think twice before agreeing to pay these fees. You may love your carrier at the moment, but you may not feel the same way six months from now.

Are you shopping for a new cell phone plan?  Will cost factor into your decision-making process? 

Mark Riddix is the founder and president of New Horizons Financial Management, an independent investment advisory firm that provides personalized investing and asset management consulting. Mark is a regular contributor to Seeking Alpha and has written financial columns for Baltimore and Washington, D.C. area newspapers. Mark publishes his own financial blog, BuylikeBuffett.com and has written the book Your Financial Playbook.