A Breakdown of Your Cellphone Bill
The price of cell phone plans is dropping due to competition between carriers. If you haven’t changed your plan in a while you’re likely paying too much for your cell phone bill. Today’s podcast episode focuses on saving money on your cell phone bill.
You’ll Learn
- What exactly are you paying for in your cell phone bill
- How much do cellphones cost to make
- A breakdown of your cell phone bill
- How to save money on your cell phone bill
The Average Cell Phone Bill
For our cellphones to do what we want them to do our wireless carriers charge us on average $80 a month. If you’re paying for a phone on installments your bill is likely to be higher.
If you’re paying a cell phone bill with a phone attached to it you’re paying two different companies. You’re paying for the phone itself and for the service on that phone.
The way your bill is set up varies between carriers but in general, if you have a single line plan you’ll pay for the service which is talk text and data bundled with the price of a cellphone line on your bill. They may be on two separate rows with separate prices but they are essentially the same thing.
If you have a family plan you may see every phone number having a line-by-line breakdown of the costs associated with the line and device payment plan.
The only other things you may see on your bill include features like mobile insurance, international plans, roadside assistance and of course taxes.
Taxes on postpaid plans aren’t simply state plus federal taxes. The average tax rate on cell phone bills is 18.5% which is way higher than just paying federal & state. If you live in states like Washington, New York, and Nebraska your taxes could be as much as 25% of your total cell phone bill.
Where you live plays a huge part in how much you pay in taxes. I’ll include a chart that breaks down how much you should expect to pay in taxes on your cell phone bill state by state in the show notes.
Prepaid vs Postpaid
There are two types of billing cell phone carriers provide: prepaid and postpaid.
Prepaid is like the name suggests you pay in advance for monthly service.
Prepaid plans usually include talk and text and charge depending on how much data usage you need in a month.
The bills are straightforward. You pay a flat fee plus state and federal taxes.
Postpaid plans include talk, text, and data plus the price of the phone and other features you may have on your account.
To help me deliver the best show possible
•Leave an honest review on iTunes, I read every one.
Here is a list of resources mentioned in this episode:
Right-click here and choose “save as” to download this episode to your computer