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How to Avoid Overpaying for Cellphone Data

Geoff Williams

You can love your smartphone, but not love your expensive data plan. That's why wireless carriers often advertise unlimited data plans. But how do you know how much data you've used and how much you need? If you constantly listen to music on Spotify, Google Play or Pandora and watch videos on YouTube and movies on Netflix, you could easily exhaust enough gigabytes to justify springing for an unlimited plan. However, investing in unlimited data can also be exorbitant, often costing $40, $50, $60 and more a month per phone line. To determine your data usage and pick a plan that matches your needs, read on for pro pointers and tips for lowering your bill.

Here's how to avoid overpaying for cellphone data:

-- Understand how much data you use.

-- Track your data usage.

-- Adjust your data usage.

-- Select a new cellphone data plan that meets your needs.

[See: 10 Big Ways to Boost Your Budget -- Without Skimping on Your Daily Latte.]

Understand How Much Data You Use

It's easy to track your data consumption in a few quick swipes on your smartphone. If you have an Android device, go to "Settings;" then, select "Data usage," where you'll see how much data you've used for a certain period of time. If you have an iPhone, go to "Settings" and select "Cellular." While your iPhone may display how much data you've used since you purchased your phone, if you click "Reset Statistics," you can start tracking how much data you use going forward.

It also helps to familiarize yourself with what's considered standard usage for a cellphone data plan. According to Rob Webber, CEO and founder of MoneySavingPro.com, a cellphone price-comparison site, "The average person in the U.S. uses three to five gigabytes of cellular data a month. Therefore, if a person decides to commit to an unlimited data plan provided by one of the big four -- Verizon, AT&T, T-Mobile and Sprint -- they will end up losing a significant amount of money on data they don't use."

So what is considered a high usage of gigabytes? David Steele, director of business development at EverydayPhone.co, a retailer of new and refurbished phones, says that 8 to 15 gigabytes is what a typical user consumes. "If you find yourself scrolling through social media or streaming videos and music often, you may want to consider a plan with more data coverage," he says.

Steele recommends perusing online data usage calculators. For instance, AT&T and Verizon Wireless offer data usage calculators.

[See: Cord-Cutters, Consider These Video-Streaming Services]

Track Your Data Usage

If you're looking for a new data plan, the key is monitoring your data consumption, so you can determine how much you typically use, and finding areas to scale back and reduce your monthly bill. One way to keep tabs on your usage is downloading a tracking app to your smartphone.

For instance, My Data Manager, a free, Android-compatible app, tracks data for anyone on a shared or family plan. With the app, you can receive notifications to alert you if your data is running low. Plus, the app can help you pinpoint the apps that are draining your data. Meanwhile, DataManPro, an iPhone-compatible app, helps you track your data in real time and MobiStats enables you to track your data usage and keep tabs on your habits to avoid exceeding your monthly limit.

Adjust Your Data Usage

As for managing your total data usage, the best approach is tinkering with your smartphone settings to make modifications that won't detract from overall enjoyment, but will reduce costs. For instance, you can go to the "Settings" menu of each individual app in your phone and switch to a lower streaming quality to lower your monthly bill.

You should also consider your social media apps. For example, with the Facebook app, videos in your feed will automatically play, whether you want to watch them or not. That can translate to unintentionally using up a lot of data. If you go to "App Settings" in the Facebook app and click on "Autoplay," you can choose "Never Autoplay Videos" or decide to play them only when you're connected to Wi-Fi.

[See: 10 Steps to Cut the Cable Cord]

Select a New Cellphone Data Plan That Meets Your Needs

If you think you're paying too much for your cellphone data plan, you'll want to shop around. There are many low-cost carriers known as mobile virtual network operators, or MVNOs, that offer customized plans, so you only pay for what you actually use, Webber explains. "For example, you can get an 8 GB data plan from Mint Mobile for only $20, which in comparison to T-Mobile's unlimited plans, could save you $50 a month or $600 a year. An important thing to note is that Mint Mobile is a T-Mobile MVNO, meaning they use T-Mobile's 4G LTE network, so these savings come with no compromise in network coverage."

What's more, if you decide to switch network provider from one of the big four phone carriers to an MVNO, you can keep your current device and number. But if you do go with the four big carriers, make sure to do your homework. The amount you pay hinges on whether you opt for a limited or unlimited package and how many gigabytes are offered in the plan you select. It's also important to take into account whether data rolls over each month.

With AT&T, you can expect to pay $30 to $45 per month, per phone line. With Sprint, you'll pay between $60 and $80 per month, but have the benefit of features such as streaming service to Hulu. If you opt for a T-Mobile plan, you'll pay between $30 and $47, depending on the features you select. And with Verizon, you can expect to pay between $40 and $60.

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