Pop quiz: How many megabytes do you think it takes to stream an episode of Cobra Kai to your phone?

How about uploading a TikTok?

Listening to a podcast?

If you’re like most people, you have no idea.

And yet, when you go to buy a cell phone, the sales rep will present a bunch of different data plans to you, as if you know how many gigs you're going to use over the next 30 days.

That’s why most people end up going with what seems like the safest option: unlimited data.

Sounds good, right?

I mean, I use my phone a lot, and I don’t want to count megabytes.

Sure, it’s more expensive than the capped plans, but at least I’ll know that I won’t run out of data in the middle of a road trip or an important video conference.

Before you make that call, there’s a few things you should know about “unlimited” plans.

It's data.

Data.

First, unlimited plans are not exactly unlimited.

They usually still have a data cap and once you go over that, your speeds will slow down, depending on how busy the network is.

Secondly, many carriers will sometimes give capped accounts higher speeds than unlimited ones.

The reason is that when capped customers go over their limit, they can be charged extra, so there’s incentive for the carrier to let them rip through their data as quickly as possible.

Unlimited customers have already paid everything they’re gonna pay, so why make it easy for them to use data?

It’s kind of like an all-you-can-eat buffet that deliberately uses small plates to keep the diners from eating too fast.

Third, and this is the big one: you probably don’t need that much data anyway.

According to a 2018 study, the average usage by unlimited data customers was only 6.1 GB per month.

That may seem strangely low, but it’s because you only use your mobile data when you’re not connected to a WiFi network... and WiFi is everywhere.

At home, at work, on campus, at the gym and the coffee shop.

Sure, there’s a small number of people who might rely on mobile data, like if you do a lot of business on the road, or don’t have broadband at home and use your phone to stream movies.

But for most of us, “mobile data” represents a small percentage of our overall usage.

So then why are most of us subscribed to unlimited plans?

Mainly, because that’s what the service providers want us to do.

Unlimited plans are heavily promoted by the big carriers, often bundled with phone discounts and free subscriptions to streaming platforms.

In fact, you have to dig pretty deep into their websites to find any alternatives.

And most of the big wireless companies have started making their capped data plans “pre-paid” only, which means you have to pay for a whole year of service up front.

They really want you to choose unlimited.

And why wouldn’t they?

With the cheapest “Premium Network Access” plan offering 50GB a month, that means the average customer is using less than a quarter of the data they’re paying for!

That would be like paying for 100 gallons of gas every month, even though you only use 20.

And you don’t get credit for the gas you didn’t use--it goes right back to the oil company.

Now, if you happen to be one of these people who actually uses 50 to 100 gigabytes of mobile data a month--you might want to cut down on your screen time--but, you are getting a really good deal.

That’s way less per megabyte than the average rate, but only because all those other customers are paying for megabytes they’re not using--essentially subsidizing your low price.

This is similar to the business model of many gyms and fitness clubs.

Most of their members barely use the services they pay for, which keeps the price low for those who work out regularly.

So how much money can you actually save by forgoing unlimited data plans?

I think it’s time to… RUN THE NUMBERS!

One year ago, Kevin got a new phone from one of the major wireless carriers, and the sales rep strongly encouraged him to go with an unlimited plan.

Kevin travels a lot for work, and relies on his phone when on the road, so he figures he’s probably a slightly above average data user.

He opts for the mid-tier option: 50GB of data without slow-down for $75 dollars a month (plus fees and taxes).

A year later, Kevin happens to check his data usage and finds that he used on average about 7.5 GB a month--only 15% of the total he’s paying for!

At first, he thinks that can’t be right, but then he starts remembering all the places he typically uses his phone: airports, cafes, hotels, convention centers--all with WiFi.

Not wanting to spend money on something he doesn’t use, he digs through the carrier’s website and finds that they have an 8GB pre-paid plan for only $25 a month--if you pay for the whole year up front.

That’s $300 now versus $900 over the course of the year--an easy decision for Kevin, who happens to have enough cash on hand.

There is one drawback to Kevin’s plan: at only 8 GB a month, he will have to be a bit more careful about how he uses his data.

Fortunately, there are some simple options in your phone’s settings to minimize usage outside of WiFi, like turning off push notifications, automatic app updates and GPS when you’re not using them.

Kevin also decides to bring a book with him when he travels so he’ll have something else to do with his downtime than doomscrolling through Twitter.

And that brings us to another major way your cell phone is ripping you off: not by stealing your money, but your time.

Almost every app and social platform on your phone is explicitly designed to keep you engaged well past the point of any benefit.

Let’s be honest: just staring at the clouds is probably a better use of your time than arguing with your cousin on Facebook or fueling your FOMO on Instagram.

If switching from unlimited to pre-paid will save you money and motivate you to cut down on unproductive distractions, I’d call that a win win.

Over the last 20 years, cell phones have gone from a luxury to a necessity.

But unlike most other utilities, the way we’re charged for wireless service is inherently vague.

As someone who likes to keep track of what I’m getting for what I’m paying, I hate that.

Fortunately, you don’t have to stumble around in the dark.

Check your data usage, look into alternate companies and plans.

It may take a bit of digging and a fair share of discipline, but when it comes to your cell phone, you--not your carrier--should be the one making the calls.

And that’s our two cents!

Data.

It's data.

Okay.