Monthly Archives: January 2014

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The latest on my quest to reduce my cell phone bill

I’ve been working hard to reduce my cell phone bill. Here’s the latest

reduce my cell phone bill

My continued quest to reduce my cell phone bill — you can never have too many smartphones around.

It was way back in July when I last talked about my attempts to reduce my cell phone bill. If you’re looking for ways to bring down your monthly costs and are still dealing with an overpriced monthly contract plan, it may be an interesting read for you.

Back then I had begun testing a VERY low-cost cell phone structure, combining a Freedom Spot Photon 4G Mobile Hotspot with very low-cost prepaid (but auto-renewing) cell service from AirVoice. Total cost: $10/month. The trick is to move your main number to Google Voice and use the AirVoice number only for emergencies.

I’ve done quite a bit research since then on possible low-cost cell phone options and tried to keep track along the way. The results of my search for ways to reduce my cell phone bill are below, if you want to just jump ahead.

But first the update on my FreedomPop+AirVoice super cheap solution. The positives were that I could keep my same phone, which I was happy with, the low cost and the fact that I had no contract. Not being under a contract left me free to easily test without being committed to two years stuck with one carrier.

The negatives were that I had to pack a separate piece of electronics around all the time (not that big of a deal), and that the FreedomPop’s coverage was extremely limited (much bigger deal). Basically it gets a nice, strong signal in the main city, but anytime you leave the heavily populated areas, say 15 miles from downtown in any direction, it completely loses its signal. That actually became something a big pain any time we took a road trip. (One additional pain was that I got a lot of spam calls via the AirVoice number, which I found odd.)

So while I got used to the hassles of this set up  and didn’t even think much about it after a while, I began to consider my next test. There is a bit of a price war going on right now so real prices for cell phone service have been dropping rapidly, just as I predicted they would. So it’s pretty easy to find a solution for around $30 these days. But I wanted to save even more!

Giving Ting a try

My latest attempt at reducing my cell phone bill was to sign up with Ting. I canceled my AirVoice plan (I still use the FreedomPop from time-to-time as it has more utility for me than just supporting my cell phone.)

Ting has one of the most interesting models for reducing cell phone costs that I’ve so far found. I highly recommend trying it to just about anyone because it’s very likely they could save you a lot of money right away.

The way Ting works is they bucket your actual usage and charge you for what you actually used. Duh! Why has no one done this before? If you check out their Rates page, you can click the various boxes in their grid and the page will compute what your bill would be.

I’ve been using them for two billing cycles now and both bills were less than $12! That’s pretty sweet, given that I’m willing to pay up to $30/month if needed. And, remember, this is a no-contract carrier, so anytime I decide I’m unhappy, I can walk.

I did have to buy another phone because Ting uses Sprint’s network and my old phone was an AT&T phone. I picked up a used one for $120 — about what I can get for my old phone. I haven’t sold my AT&T phone yet, just in case I decide to try something else. So right now I own a Sprint phone and an AT&T phone.

Google Voice is still the backbone

It’s important to keep in mind that keeping my cell phone costs so low is only possible because I use Google Voice as the carrier for my main phone number. All my texting and most of my calls are done via Google Voice. The only data I use via Ting is when I can’t reach my home or other WiFi, which given that I’m home most of the time is rare.

Google Voice works pretty well for the most part. I love the transcribed voice mails and it’s very handy to “move your phone” by simply logging on elsewhere.

Phone conversations are sometimes choppy and there is that annoying slight delay that causes the two people to occasionally talk over each other. But, hey, it’s free, right?

You can read up more on how Google Voice works in my last post.

You get what you pay for

So this solution is not without its hassles. I’ve experienced delays in sending and receiving text messages, calls via Google Voice where the other party is very frustrated they can’t hear me (they say I’m “breaking up”). Calls were much more reliable before I got this Sprint-based phone to use with Ting. With everything else being the same — same WiFi, same App, same location — the call quality was much worse with my Samsung Galaxy SII than my HTC Vivid. I believe that this is because the WiFi receiver is not as powerful in the Galaxy.

Frustratingly when on a recent call with a consulting client, I had to give up on Google Voice and call her via my Ting line. She said it sounded MUCH better — and then that call dropped. Embarrassing! (Note that I’m not necessarily saying Ting is lacking because of this. We live on the back of a hill and always have weak cell phone signals here.)

So I’m still testing. I can deal with a little bit lower quality, but I do need reliability. I don’t talk on the phone very much but when I need to, it had better be there.

The app world is still pretty shaky

I have found a lot of difference between the various apps that exist to support Google Voice. There are three that I’ve tried: TalkaTone, GrooveIP and Spare Phone. TalkaTone was godawful. I suppose I should try it again, but my experience was so bad I cringe thinking about it. For quite a while GooveIP was great, although I was hoping for some software updates to correct some problems in maintaining a connection to Google Voice. They actually did improve that massively in a few later updates, but unfortunately they also seem to have screwed up the call quality. Just a few days I dropped that to try Spare Phone. Spare Phone is a much simpler app and has been working pretty well lately. It’s still too early to make a final judgment, but I like it so far. My only complaint is some scratchy call quality on my end. People I’ve talked to haven’t complained yet, so time will tell.

Other ways to reduce my cell phone bill

While it has some great benefits, using Google Voice is a fairly extreme way to drop your cell phone costs. By channeling the majority of your calls and texts through Google, you can greatly bring your costs down if you choose a low-cost cell phone.

There are some other ways to go, though. A few honorable mentions from my research.

  • Red Pocket Mobile 
    Red Pocket Mobile offers coverage on both GSM and CDMA networks so this could save you from having to buy a new phone if you want to test out a low-cost cell phone carrier.
  • Republic Wireless
    While I’m a huge fan of the Ting business model, the Republic Wireless model is probably my second favorite. Republic works by utilizing WiFi for its calling the majority of the time and then uses a cellular network when WiFi is unavailable. They cleverly switch seamlessly (UPDATE: Maybe not seamlessly — see comments) back and forth between the two networks so you don’t notice the switch. Thus they’re able to keep their monthly prices low — $25 for a standard plan. The big negative, of course, is that you have to use their proprietary phones to make this work. That means buying another phone for as much as $300. Assume you’ll keep your phone for two years and convert that to a monthly price and that’s another $12.50/month. So you’d basically be back to $37.50/month, which is no longer one of the cheaper options. If you can be disciplined and keep your phone for four years, that’d effectively put you at $31.25, but, again, that’s basically the same as many of the carriers below. If I could get a Republic Wireless phone cheaper, I’d be all over this. But if you need to buy a new smartphone anyway, this could be a good option for you. 
  • FreedomPop
    FreedomPop is really shaking things up in the industry by taking the price right to zero. Free data, Free texts and free voice — all of which are very limited — could be just the ticket for a light user. Based on my mobile internet experience, however, I’d be very worried about the coverage map. Hopefully this spreads and helps bring down the cost for the entire industry. 

These days there are many ways to reduce my cell phone bill so I don’t think I’ll ever need to pay more than around $30/month. I’ve been lower than $12 for around six months or so and while I can’t say it’s completely bulletproof, at this price I can handle some hiccups.

Here is a table I put together based on my research of low-cost providers. Take a look, explore. Your mileage may vary, but as long as you stay away from any long-term contracts, you can test a few different options until you find a good fit for your situation:

Lowering my cell phone bill: No-contract cell phone options

CarrierTalkTextDataPricingNotes
TingVariesVariesVariesVariesI love the Ting model -- a true pay for what you use structure.
FreedomPop200 minutes500500MBFree! (If you stay under their usage limits)Check the FreedomPop web site for details on their free phone plan. The Freedom Spot Mobile Hotspot is available at Amazon.
Republic WirelessUnlimitedUnlimitedUnlimited$25/month (3G)Republic Wireless has a unique offering heavily utilizing WiFi to enable calling. Based on the network speed desired, Republic has plans higher and lower than shown here.
AirVoice WirelessUnlimitedUnlimited100MB$30/monthAlso check out their other plans. There are quite a few viable options available for low cost.
ChitChat Mobile250 minutesUnlimited250MB$20/monthChitChat offers mix-and-match style pricing. Take a look at what you need and see if one of their plans would work for you.
Simple MobileUnlimitedUnlimitedUnlimited$25/month
Consumer Cellular200 minutes1000100MB$25/monthConsumer Cellular is oriented toward the senior market. Many mix and match options to choose from.
I-Wireless200 minutesUnlimited200MB$25/monthOwned by grocery chain Kroger.
T-Mobile Prepaid100 minutesUnlimitedUnlimited$30/month
TracFone Wireless200 minutesIncludedIncluded$30/monthSeveral plans offer triple minutes with phone purchase. They also offer some pay as you go plans. Many of their offerings include bonuses in minutes and texts. It may be worth investigating their options if you think they might work for you.
Straight Talk Wireless1000 minutes1000Unlimited$30/month
H2O WirelessUnlimitedUnlimited500MB$30/month
Virgin Mobile300 minutesUnlimitedUnlimited$35/month
Go Smart MobileUnlimitedUnlimitedUnlimited$35/month
Net 10 WirelessUnlimitedUnlimitedUp to 500MB$40/month
MetroPCSUnlimitedUnlimitedUnlimited$40/monthOwned by T-Mobile
GoPhone500 minutesUnlimited200 MB$40/monthAdditional data can be added to this plan for $5/MB. They also have other plans available.
PTEL MobileUnlimitedUnlimitedUnlimited$40/monthA $35 plan is also available without high speed internet.
CricketUnlimitedUnlimitedUnlimited$50/month
Boost MobileUnlimitedUnlimitedUnlimited$55/monthBoost also offers a gimmick where you can drop your bill by paying on time.
AIO WirelessUnlimitedUnlimitedUnlimited$55/monthOwned by AT&T
Verizon Wireless PrepaidUnlimitedUnlimited2GB$60/month
Red Pocket MobileUnlimitedUnlimited100MB$30/monthAlso has a basic $10/month plan. Red Pocket offers both CDMA and GSM so you may be able to bring your existing phone regardless of your current carrier.
Prices and details shown here are subject to change. Some links include affiliate links so I may get a few cents if you make a purchase.

How much are you guys paying for cell phone service these day? What service are you using to keep cell phone costs low? 

One year with a baby — how am I holding up?

Pretired Baby had a good Christmas

Pretired Baby had a good Christmas

Today marks the one-year mark from the day Pretired Mama went back to work after her maternity leave. Closing the door and turning around to care for a baby all by myself is an overwhelming feeling.

In the early days, it actually wasn’t that difficult. Milk-sleep-poop-repeat. Milk-sleep-poop-repeat. The weather was even nice enough that we were able to take walks together nearly every day. He slept often enough that I had no trouble getting all my chores done each day, even having food on the table most days when Mama came home from work.

As time went on, we got into a routine. Since he was immobile and very mellow, I found the time to do some part-time consulting and even started a blog! Pretired Baby did his part, being quiet when I needed to talk to a client and exceeding all his growth benchmarks. So one year with a baby so far, here we are: comfortable with each other, hopelessly attached and used to our little routine.

I had grandparents watching him one day a week, which was a great help in my sanity as well as giving me the precious block of hours I needed to do some work. My wife has had quite a bit of time off as well, a few weeks between jobs and quite a bit of free time around the holidays, as well as quite a bit of freedom to work from home. Just recently we added a nanny one day a week to give me a little more bandwidth, which is helping quite a bit, but is expensive.

But all-in-all I think we did pretty well. Although some people think men shouldn’t be the primary caregiver, no one died and I’d even say he’s thriving. His language skills are developing very rapidly, he’s running around like crazy and is a very happy little boy.

That said, things are getting harder now. No longer can I just park him next to me while I work. He is also sleeping much less, cutting greatly into my work and blog time. Plus I’m more worn out now after a day of chasing him around. While I wouldn’t trade my time with him for money, the unrelenting nature of this job is exhausting. Some days I crave a break from him and then I feel guilty for that craving.

He needs more attention now and we run out of things to do on rainy days. I picked up The Toddler’s Busy Book but most of the suggestions are good for kids that are 2+. Hopefully it’ll come in handy a little later.

We’ll try to do our first trip to Hawaii this winter and I’m already dreading how crazy he’s going to get on the plane with no nap. Hopefully it’ll be worth it.

He’ll be two this summer and after that milestone we may look at daycare for one or two days a week to start getting him used to being around other kids. Unless you guys start clicking my ads, I’ll have to take on more work to cover that additional cost, but that could be a nice transition toward the extra money I really need to bank to reach my full pretirement goal.

So it should be an interesting few years coming up. It’s been an honor to be able to stay home and take care of my baby. I wish my wife could be here with me, but we’re both so glad one of us could be here.

I have no idea what the next year will look like, but one thing is for sure: it’ll continue to be an adventure!

Another way to decrease your debt: Recast your mortgage

We lowered our mortgage payment by more than $1,000 without refinancing. Here’s how to recast your mortgage

recasting your mortgage

Image courtesy Sujin Jetkasettakorn via FreeDigitalPhotos.net

As I alluded to back in May in Save money with a tool library, there is some potential that we may decide to rent out our house for some period of time. We have a few different ideas in mind, some of which aren’t ready for public eyes. However, since we wisely chose a 10-year mortgage when we last refinanced our house, our payment has been large enough that we’d have negative cashflow at current market rates.

So we had a bit of a conundrum. We didn’t want to restart the clock on our mortgage term, but we wanted that payment to go down. Fortunately there’s an option that perfectly fit our needs and it could fit your needs as well.

Hold up! I suppose it’s time I explain myself. Since I’ve started this blog, I’ve simultaneously mentioned that I don’t have  a mortgage payment and have also said that we’re still working on paying off our mortgage. How can both be true?

The answer is really pretty simple. Being several years older than my wife and because I had a chunk of change from selling some real estate a few years ago, we decided it made sense for me to pay off my half of our mortgage earlier so that I could move toward pretirement (although I still pay my share of the escrow costs). Pretired Mama had quite a bit more saving to go (although she’s far ahead of where I was at her age). But that’s why I had the freedom to quit my job and stay home with the baby (even though I’m still shy of being fully pretired). (I also have two more mortgage payments related to some property I own with my brother, but that’s a story for another day.)

Anyway, here was the situation on our house as 2013 was winding down:

  • Mortgage (1st): $186,000 (10 year loan paid down from $251,000 — all of this is Pretired Mama’s debt)
  • Mortgage (Home Equity Line of Credit): $10,000 (leftover from a deck we recently had built and some other stuff – half of this was my share)

The payment on the first was around $3,000 including escrow. The payment on the second is just $100 (the minimum it can drop to under the terms of this loan.) We could probably rent our house for somewhere around $2,500/month so we’d need to drop it a fair amount to get into positive cashflow territory.

Pretired Mama has been faithfully following my patented template for rapidly paying off a mortgage (seriously — check it out if you’re working on paying off your mortgage. I have yet to see anyone produce a more efficient way to get there quickly.) She had some $40,000 in side savings built up so we had some options. Originally we had planned to do a refinance later this year, but we realized we could get to the same place easily without paying any expensive fees.

Recasting — the easy way to lower a mortgage payment

The method is called “recasting your mortgage” and it may just be the biggest secret in the mortgage industry. A recast of your mortgage simply means the bank will reset the amortization clock based on your current equity situation plus any funds you may wish to bring to the table. The timeframe of the loan remains the same, only the principal drops. She had been paying roughly three years on a 10-year loan so effectively the recast was equivalent to starting a seven-year loan at the new balance.

The bank’s rules (a local credit union) were that you had to be in good standing on the loan and you had to have a minimum of $10,000 to apply toward the recast (either that much equity or cash you brought forward). The processing fee was $150. No appraisal, no credit check, no income check. All we had to do was making a principal payment, call the person in the special products department and tell her the payment had been made, sign and notarize some documents (called “loan modification agreement” — probably the same documents people use when the bank agrees to lower the principal for people who are underwater) and wait. It really was that easy. There was one other question I asked the woman from the bank: “So does our other debt have any impact on this process? For example, if we withdrew some money from our HELOC would that impact our ability to complete the recast?” She said, “No, we don’t look at that at all. You bring the money and we recompute the amortization. That’s it.”

The biggest hassle was trying to get notarized. The bank’s paperwork was unclear about whether we had to have a witness to the notarization or not so we wasted an extra hour with a bored baby at the bank trying to figure that out. (People were scowling at us as we dealt with the signature issue and I’m pretty sure they were assuming we were deadbeats trying to get a loan modification. Heh!)

So here’s how we ended up structuring things. I paid off my half of the existing HELOC ($5,000) as originally planned. Then, we actually pulled some additional funds out of the HELOC to combine with Pretired Mama’s side savings. So effectively, we brought $86,000 to the table from the bank’s perspective (even though half of it was their own money). The remainder on the first mortgage would be $100,000 and the HELOC would now have around $51,000.

When we were done, the loans looked like this:

  • Mortgage (1st): $100,000 (still officially a 10 year loan, but with just seven years left — still all Pretired Mama’s debt)
  • Mortgage (HELOC): $51,000 (this is now all Pretired Mama’s debt as well)

The new payment is $1,800 on the first (including escrow) and it’s still $100 on the second. Monthly savings of more than $1,000/month! So now we’re well below what we could get in rent and Pretired Mama should have the HELOC paid off in a year or less. From there she can either stay on the accelerated plan to pay off the first mortgage or she can shift over to rapidly building up her pretirement fund. Another interesting fact is that the bank said there is no limit to how many times you can recast. So it’s possible we could do one more of these before our loan term is done.

Will your bank allow you to recast your mortgage?

Since I was dreading the high costs and hassle of a refinance, I’m now in love with the recasting concept.

Unfortunately, not every bank is on board with letting you recast your mortgage. My brother and I tried it with another piece of property we own together and they told us they don’t offer this service. And why would they, really? They lose thousands in interest. The only advantage I can see from their perspective is that they retain your business vs. letting you refinance away to another company. But since we use a credit union that offers good service, it’s still an available product (although one they don’t advertise at all).

But if you’re in anything close to my situation, it’s worth a phone call to find out. With a sky-high stock market it can be tough to find a good place to put money. If you’re sitting on cash and are worried about buying at the top of an overpriced market, a recast could be a good solution. You could recast your mortgage, lower your payment significantly then invest the savings on monthly basis, thus dollar-cost-averaging your way into the market — all with less debt hanging over your head.

It made sense for us right now, but every situation is different. Be sure to do your homework. For me, though, I’ll be confirming any bank I take a mortgage from in the future offers a recast. I like having options.

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