'Real Money': Shrink Your Cellphone Bill by $1,000 and End 'Wireless Waste'
ABC News' Paula Faris reports:
To stay in touch with his daughters, 11-year-old Reagan 5-year-old Ava, Phil Barry, a divorced father in Marshfield, Mass., got his eldest an iPhone so they could videochat.
"When they're with their mom, I try to respect that time, but I still have to talk to them every day," he said. "I have to see their faces."
Barry pays for three phones - his iPhone, Reagan's iPhone and a basic phone for his mother, Susan. He said his most recent AT&T bill, weighed down by extras like texting and data, had been $311.
"It could go a couple of dollars either way," he told ABC News recently. "It's rough. I mean, I think about what most people pay for their cars and that's what I pay for my cell phone bill. … A lot of it is probably my fault, where I should pay more attention."
J.D. Power and Associates says that U.S. families spend an average of $139 a month on cell phones - $1,668 a year - up from $127 a month in 2009. And the Bureau of Labor Statistics says that household spending on cellphone services rose by more than 4.5 percent in 2011 and has gone up more than 20 percent since 2006.
ABC News' "Real Money" team joined forces with Todd Dunphy, a former Verizon employee who co-founded the mobile phone analytics company Validas, which seeks to eliminate what it calls "wireless waste" - unused data, minutes and texts.
Validas, which performs analysis of cellphone usage for large corporations, recently launched Savelovegive.com to provide the same service for free to consumers.
The service is completely free, but its creators hope the site will turn that "wireless waste" into something good, inviting users to pledge some of their savings to charity. The company doesn't take a cut from users' donations.
"We built in microphilanthropy in the app, so you have your savings connected with a foundation for women's empowerment," Dunphy said. "You can take some of that savings and redirect it. Or you can keep it all for yourself, it's no big deal. But we created a vehicle."
According to Validas, 80 percent of Americans overspend on their monthly cell phone bill by an average of $200 a year. When Dunphy analyzed Barry's bill at Savelovegive.com, he immediately found ways to save far more than that.
Although Savelovegive.com automatically prepares an email that users can send to their carriers to switch plans, Barry went into an AT&T store to change his plan in person. By switching to a MobileShare plan with 6GB of data a month and adding a corporate discount, Barry will save nearly $1,400 over the course of the year.
Below are Dunphy's tips for making sure your cellphone plan is a perfect fit and possibly shrinking your bill.
1. Let free websites figure it out for you. Just plug in your phone number.
At Savelovegive.com, you log in with your carrier account information, giving the site access to your previous bills. The site analyzes the bills, looking at usage and charges. It then compares your plan to other available plans, offering you ways to adjust your current plan and save.
Savelovegive.com currently works for AT&T and Verizon customers, but the site plans to expand to other carriers. Another analysis site is Billshrink.com.
In Barry's case, he was buying 8 gigabytes of data monthly but only using 2.5. By bundling talking and texting into one new plan, he could save nearly $1,200 a year.
2. Look for sneaky charges such as horoscope texts, roadside assistance and 411.
Tiny charges can be added to your bill without your knowledge. On average, it's more than $5 a month, according to a study by the Citizens Utility Board and Validas. If you see a charge you're not familiar with, contact your carrier to have it removed.
3. Get your discount.
Tens of thousands of companies work with cellphone carriers to get their employees discounts. It's not just for corporate workers - teachers, government workers and even students can qualify. But the key is that you have to ask for it, entering your organizational email address on the carrier's discount web site. Check the discount pages at AT&T, Verizon and Sprint.
Barry's employer was recently purchased by IBM, so he'll qualify for a discount of up to 25 percent. The discount could save him another $200 a year.
Dunphy told ABC News that Barry's situation was typical.
"A lot of it is awareness," he said. "Awareness of what's out there and then also trying to figure out what you use and what's available. … It's like going and getting a suit or a dress, getting it perfectly tailored to you."