When you're deciding how much to spend on a smartphone you have two costs to consider: the price of the phone and the price of the plan. The price of the phone is a one-time expense. Cell phone companies also tend to offer lots of promotions and discounts, so the phone you want may be cheaper than you think. In some cases, if you sign up for a certain plan, the phone is free. Before setting your heart on a certain phone, make sure its price is in-line with your budget.
In most cases, your smartphone plan will be a bigger expense than your phone. Let's say you had to have a certain phone and you were OK with paying $600 for it with no discounts. The plan for that phone could run for two years, at over $100 a month. You could end up paying four times as much for the plan than the phone.
Before shelling out all that cash each month, think about how you want to use your phone. If you plan using mainly it for talking and texting, with only a little bit of e-mail or web surfing, see if you can find a plan with less data. If you're constantly online and want to download apps, games and movies, you'll want to spring for more data. Other parts of the plan to consider include if unused data, text and talking minutes roll over from month to month, or what the penalty for breaking the contract is. If, for example, you move out of the cell phone carrier's coverage area, you don't want to have to pay hundreds of dollars just to get out of your contract.