Phone Bill Calculator: Compare your options
This phone bill calculator compares buying a phone upfront and using it with a phone plan of your choice versus the cost of financing a phone through a carrier. As you enter purchase prices and financing details on the left, relative costs will display on the right under "Results," to show how much money you could save. It also calculates how your cash could grow if you put the money you save into an interest-bearing account.
Buying Phone Directly
Total Price $0
Financing Phone With Carrier
Total Price $0
Difference between buying outright and financing
Savings with outright purchase $0
Results
Total cost of buying phone $0
Total cost of financing phone $0
You would save $0 by buying your phone outright.
With TextNow's free nationwide phone service, you could save
$0
Buying a new phone and selecting a phone plan involves lots of comparisons. We believe that phone service should not only be accessible (and free!) but also easy. So we put together this phone bill calculator to help you see how much you can save by either buying a phone directly or financing it via a monthly payment. It’s not always simple to figure out, and the results may surprise you.
Here's how to use the calculator:
Buying a phone directly
This section looks at the cost of buying a phone and using it with your current phone plan or a plan of your choice over the same time period as a financing contract. Fill in:
Full price of the phone: Enter the overall cost of the phone you want, including any taxes and applicable fees. If you qualify for discounts or trade-in offers, reduce the price to reflect them.
Cost of your phone service: Enter the monthly cost (with any taxes and fees) of the phone plan you’d use — whether you're shopping for a more affordable phone plan or keeping your current one.
Total price: This is how much you’d spend on the purchased phone and service over the same time as the financing contract you're considering.
Financing a phone
In this section, enter the details of the phone financing option you’re considering. (If you find a deal where the monthly phone payment is discounted*, read on to see how to account for that.) If you have a few options for financing, you can simply re-enter different amounts to reflect different financing options, and the calculator will recalculate as you go.
Full price of the phone: Enter the full retail price of the phone as listed by the carrier (you can usually find it by clicking through to the details of the phone on the website).
Price of (required) monthly service plan: Fill in the price of the monthly phone/service plan you'd have to use with this device. Most phone offers say something like “requires ‘x’ plan/service” — to be eligible for the phone offer, you must sign up for a certain monthly service plan as well. The required plan may make your overall contract more expensive in the long run, which is exactly why this calculator is so important!
Interest rate for phone financing: Fill in the interest rate you qualify for. The advertised monthly payments for a financed phone all assume that you qualify for 0% APR (zero interest on the financing). However, that won't be the case for everyone. If you start the qualification process and are given an interest rate greater than 0, fill it in. If you do qualify for 0%, type in “0.”
Length of contract: Enter the length of the phone financing contract. Most will range between 24 and 36 months.
Monthly phone payment amount: This number can’t be edited manually. After you fill in all the fields above, the calculator will automatically do the math to show what your monthly phone payment would be. Note: This is your monthly phone payment for the phone only and doesn't include the monthly phone plan cost.
The total price that is calculated at the bottom of this section combines the monthly payment for the phone and the monthly payment for the service over the period of the contract (24, 36, or 48 months.)
*If you qualify for a discounted monthly payment for device financing, then you will need to do some manual calculation on your end to see the discounted total price.
Let's say you’re considering an $800 phone and can get 0% financing over the 24-month contract. It requires a $75/month service plan. The monthly payment for the phone comes to $33 and your savings come to $2,600 by the end of the contract period.
But if the carrier is also offering a discounted payment of only $10/month, you’d need to subtract that discounted price from the monthly phone payment: $30 - $10 = $20 savings per month. Over the 24 months of the contract, that's $480 more savings ($20 x 24 = $480).
Subtract the overall discount savings from the original total: $2,600 - $480 = $2,120. Then compare that to what you’d pay when buying a phone outright.
Understanding your savings
Savings with outright purchase or phone financing: Once you have the totals for both options, you can see which option saves you money over the same length of time.
Interest rate of savings or investment account: This section is optional, but we highly recommend you try it out to see how much more your savings could grow if you sock away the price difference in an interest-bearing account.
Enter the interest rate of your savings account or the average return of your investment account. The calculator will add the accumulated growth over time, thanks to interest, into how much money you’ll save overall.
If you don't want to see your potential money growth included in savings, enter 0 in this field.
Example of cell phone plan comparison
To put this all together for you, we’re going to use a real life example of how you would use this calculator to compare your options.
Find the phone you want to buy.
Now, shop around for the carrier you would want to be with if you were to finance the phone – maybe one of them has a deal you're interested in.
Find out which phone service plan you want to use. It could be the same one for both options (buying outright or financing), or you can give yourself two options – one for buying the phone outright, and one that is (most likely) required if you were to take the carrier deal.
This step is optional – but we highly recommend it – figure out the best interest rate you can get on a savings account. If you'd prefer to put money into an investment account instead, look up what your average return rate would be, if you don't already know it.
Using a $999 iPhone 16 Pro as an example, say you're considering two phone service options: Unlimited Data Pass from TextNow for $39.99/month and the Unlimited Extra EL plan from AT&T, at $76/month the lowest-priced plan you can get when financing the iPhone 16 Pro for 36 months.
In this scenario, assuming you qualify for 0% financing, you'd ultimately save $1,418 by the end of the 3-year term if you bought the phone directly and used it with the cheaper phone plan while stashing the difference in a savings account at 3% interest.
You could save more, too: You'd save $1,575 over that time if you used your purchased phone with TextNow's free nationwide service, Essential Data.
Other considerations play a role: You may decide to finance if you can’t spend $999 all at once to buy a phone. Or, if you can get a good discount on the phone with a trade-in, adjust the phone price accordingly in the “Financing a phone” section to see if that saves you more. Keep in mind, though, that financing will lock you into a contract for many months, whereas using a prepaid plan with a purchased phone gives you flexibility to change your plan at any time.
TextNow Tip: Take the work out of shopping for the best phone deal and check out our list of the best phone deals, updated monthly, so you never miss out on a deal.
How much should a phone bill cost per month?
According to JD Power, as reported by CNBC, the current average cell phone bill is $141/month. That adds up to almost $1,700 per year – money that can most definitely be better spent elsewhere.
The cost will ultimately depend on the type of phone plan you select, and for how many lines. Limited data plans are cheaper on average, with the cheapest for a single line starting at $10 for 2GB, ranging all the way up to $40 for 10GB. Unlimited data plans can range from $25/month for a single line all the way up to $100/month or more.
What should I consider when choosing a phone plan?
When picking out a cell phone plan, you should consider 4 things:
An honorable mention would be looking into postpaid vs. prepaid plans. If you can handle network depriortization during times of congestion in order to have the flexibility to move between different plans and carriers to get a cheaper monthly bill, then prepaid would be for you. If you rely on network speed and don’t mind signing into a contract, then look for postpaid plans (offered by the “big 3” carriers– AT&T, T-Mobile, and Verizon).
How can I lower my phone bill?
If you’re determined to make this year the year that you save money, and your monthly phone bill is a drain on your budget, there are ways for you to lower it.
Shop around for more affordable phone plans. You’d be surprised to find out how much value you’re still able to get from smaller carriers that offer similar services for much less.
Look into any further discounts you can qualify for. Anything from government programs like Lifeline to student or other specialized discounts certain carriers offer.
Add more lines. Oftentimes, adding more lines greatly discounts the monthly price per line of a plan. If you’re able to combine your service with a partner or choose a family plan, you can all enjoy discounted service.
This calculator does not constitute financial, legal, or professional advice. The results are estimates and may not reflect actual costs, terms, or offers available from service providers. Please consult directly with your chosen provider to confirm the details of any plan, promotion, or service. TextNow, Inc. is not responsible for errors, omissions, or any outcomes resulting from the use of this calculator. Use of this tool is at your own discretion and risk.
