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Save on Your Monthly Internet Bill by Using Your Smart Phone as a Router

I am happy to report today that I have officially axed my internet service at home and have no more monthly internet bills to pay. I still have ‘high speed” internet though.

My wife and I are on a joint cell phone plan (family plan).  My wife was itching to upgrade to the new Apple I-phone 4 for a while, but didn’t want to switch away from T-Mobile because every soul she knows on this earth is on it.

Early in February, my wife and I were shopping for some Asian groceries and the store happened to have a Wireless booth.  I stopped by just to check out what’s new out there since I too wanted to upgrade at some point to a “pocket laptop”.

It was then when I was introduced to the T Mobile My Touch smart phone. I was impressed by it more and more the more the store rep told me about it.  That same night upon returning home, I spent a couple hours online doing a side by side comparison of all the new gadgets. I even watched YouTube videos showing performance tests, such as a browser speed test between the I-phone 4 and the My Touch.  The My Touch blew everything out it seemed.

A bit more reading and research later, I was convinced that this was the best phone / pocket laptop out there at the time and we returned the next day to upgrade her device. I managed to convince her to forget the over-hyped Apple dream and stick to T-Mob.  Couple months later I followed through as well when I was due for an upgrade and got myself the Black version of the My Touch.

T Mobile My Touch

How Did the Financials Play Out?

The My Touch was a $500 device at the time we bought the phone.

However, because it was a qualified upgrade, and T-Mobile was running a Valentines Day special, my wife was able to get hers for $199 if I remember correct with a $200 rebate in form of VISA debit cards.

That comes out to . . .  Free.

When I bought mine, the deal was no longer there. I had to pay $149 and apply for a $50 rebate, making the net cost $99.  Still a no brainer for me and I did it.

What did we do with our old phones? Same thing I like to do with any valuable sitting around at home not being used.

I immediately put it on Ebay with a glorified ad and managed to rake in $185 for both combined net of Ebay fees and PayPal commissions.  It helped that we had both the phones unlocked.

This put us at a net income of $87 from the transactions so far, not including the negligible tax effect at this point.

  • Paid $199 + 149 = $348 total cost
  • Rebates of $200 + 50 = $250
  • Net proceeds from Ebay = $185

Net Income = 87

The Bigger Residual Benefit

Sure, getting paid $87 to upgrade from older cell phones to new high power pocket laptops is good, but the long term residual benefits we were able to generate are far greater.  Check this out.

We paid $45 monthly for our high speed internet service at home.  I cancelled the service because the My Touch can be used as a WiFi Hot Spot for up to two connected devices.  That is incredible.  At first I didn’t think the internet was going to be fast enough, but after testing it out a couple months it is.  It’s so fast that I cancelled our fiber optics Verizon FIOS connection.

Between my wife and I, we can have up to 4 devices connected online at any time.  We seldom use more than 2 at a time anyway, but it’s good to know that we can accommodate for guests, friends and family that visit by.

Because these smart phones also have smart applications that we could use to send and receive text messages through, we cancelled our text bundle package, which we were paying extra for to the tune of $10 per phone per month.  We now send and receive text messages (SMS) through our smart phones since we are always online.

The downside of getting the smart phones was that we had to upgrade our old data plan from $25 per month to $30 per month for unlimited data transfer capability, still a great deal considering the residual savings that resulted from this switch.

We also had Vonage (VOIP) that we used at home mainly because of their international package.  But because of the various innovative applications, we are now able to talk overseas for free using a combination of services like Skype, Tango, Google Talk, etc.  In fact we love Tango because it lets us video chat real time for free across countries and continents. So good bye Vonage as well!

So aside from the $87 that we already made, here is how we benefited in the long haul.

  • Dropping Home Internet: $45 x 12 months = $540 per year savings
  • Dropping Text Messaging: $10 X 2 phones = $20 X 12 months = $240 savings
  • Increasing Data Plan: $5 increase X 2 phones = $10 X 12 months = $120 expense
  • Dropping Vonage: $25 X 12months = $300 per year savings

 

Net Effect$960 in annual savings, or $2,880 over a three year horizon.  A good chunk change without having to sacrifice anything from a user experience perspective. We still are able to do today what we were able to do back in February.

Upgrades Can Be Worth It

I am normally not a sucker for high priced cell phones, or any technology for that matter. I do enjoy my larger than life flat screen, laptop, video games and my new smart phone, but I pride myself on being a smart shopper.

In this case, the upgrade just made sense. In fact, even if you don’t care for the device, sometimes upgrading makes sense if you plan on staying with your cell phone provider for a while.  Why?

Well the retail value of our smart phones when acquired was $500. T-Mobile also allows one free unlock which we always take advantage of because we travel internationally frequently. Say we didn’t want to keep the smart phones, we could have turned around and sold them on Ebay.

I checked the going rates under completed auction listings and these were being sold north of $400, and even higher for unlocked devices. Paying nothing, or even $50 to make $400 for not doing much is not too shabby.

And get this, since I use my phone for business, part of my purchase price is also tax deductible because I will obviously be using the phone partially for business.  The minutes plan, and the data plan are also partially tax deductible.  Read more about the tax benefits of running your own full time or part time business here.

The more I think about this today the more it just makes sense having done it.  What am I missing? Any “gotchas” to look out for in the near future?

What do you think about what we pulled off?  What other creative and win-win ways have you utilized to benefit both your life and finances? Let’s hear them.  Please share your ideas!

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4 Responses to “Save on Your Monthly Internet Bill by Using Your Smart Phone as a Router”

  1. Very cool! I would miss working off of my computer/laptop though.

    When cell phones came out, people finally dropped their landlines (I did about 9 years ago), and now the next logical step is to drop your internet service!

  2. very true.. Business VoIP is very cost-effective. One can save up to 80% on their regular phone bills. Moreover, there is not any type of wiring and hardware issues. So it’s safe and you can call anytime anywhere in the world.

    • Sunil says:

      Welcome. VOIP of any sort is more cost effective if you are already paying for the internet which in most cases is the case. Quality is where you have to choose which service to go with.

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