Your Cellphone Bill Can Cost You Over $1,000 a Year—Here Are 5 Ways to Get It Under Control
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"An added benefit of paying off your phone or buying an unlocked phone at full price is, you are now a smartphone 'free agent.' When you are eligible for so-called bring-your-own-device plans, many new, inexpensive options become available."

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AT A GLANCE

Welcome to Day 22 of our 30-Day Easy Money Makeover! Every day in April, we’re bringing you strategies to help you improve, and feel more confident about, your money situation. Follow along and see the rest of the calendar here.

You may be paying more for your cellphone service than you realize.

When you are looking to save money, it’s a good habit to consider the annual cost of recurring expenses. Why? It’s easy to focus on the price tag of that monthly rate and miss the overall impact of hidden costs, occasional variations, and bill creep. Maybe you think you are paying $70 a month, but after fees, taxes, and the occasional data-heavy vacation, you are really paying a few hundred dollars extra—with an annual bill of more than $1,000 a year.

So trimming this bill offers fertile ground. That's especially true now, as creative discounts and alternative plans abound. Here are five ways to save cash, starting from simple things you can do today to more complex tasks that may take a bit longer.

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1. Ask about discounts

Many cellphone carriers have deals with large employers to offer their workers better pricing. Some of these discounts are significant—as high as 22%. Ask your HR department if this is among your work perks. Check with your carrier to see if you’re eligible for other potential discounts, too, such as military veteran status.

2. Scrutinize your taxes

Local and federal taxes make up, on average, 19% of your bill. That figure can vary wildly, however. (See map below.) Make sure your service address matches up with your billing address, so you aren't overpaying. In some cases—say, you move from Washington (where taxes are about 19%) to Idaho (about 3%)—the difference could be hundreds of dollars annually.

3. Slim down your data plan

If you watch YouTube videos on your phone while commuting, you probably need an unlimited plan. But if you’re most often using your phone at home or work, getting in the habit of switching to Wi-Fi can save you a lot of money.

Verizon's cheapest unlimited plan for a single smartphone starts at $75 plus fees; a slimmed-down 2 GB per month plan is less than half that—a potential savings of almost $500 annually. Checking past bills to learn your usage pattern can prove a helpful guide to see if you are a candidate for a low-data plan.

Of course, limited plans come with risks. What if you go on a big trip and need your phone's GPS, for example? Learn if your carrier will let you change plans midmonth, just in case.

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4. Change billing habits

Carriers really like when you pay on time, and they like not having to mail you a bill. Sign up for automatic payments and paperless billing, and you can often get discounts that amount to about $100 a year. But stay alert: It’s easy to stop checking your bills when they’re electronic, however errors and new charges can still creep in.

5. Consider switching carriers

An added benefit of paying off your phone or buying an unlocked phone at full price is, you are now a smartphone "free agent." When you are eligible for so-called bring-your-own-device plans, many new, inexpensive options become available.

Look beyond the big four of Verizon, Sprint, T-Mobile, and AT&T, and you’ll find an array of mobile virtual network operators (aka MVNOs) including Cricket, Boost, and Virgin. Their prices can be half that of the big four—even as they use those carriers’ networks. For example, Total Wireless, which uses Verizon's network and is sold at Walmart, has a 30-day, 6 GB plan for $35.

MVNOs also tend to offer prepaid plans. You’re less likely to run into bill shock, as the service will slow down or stop working until you "top up" your plan. That can be annoying—or it can be a great budget controller.

Check out 4 questions to ask to get the best deals on health care and prescriptions via Invest in You with CNBC + Acorns.

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