Millennials on family phone plans: It鈥檚 not mooching, it鈥檚 saving money.
Some millennials are听slow to fully leave the nest, but there鈥檚 at least one instance in which that can work in their parents鈥� favor: the听.
Nearly half of smartphone or mobile phone owners with children 18 or older (49%) have kept their adult kids on the family cell phone plan. And 53% of those parents say that the child pays some or all of their bill, according to an online survey commissioned by NerdWallet and conducted by Harris Poll.
Key takeaways
- 51%听of parents who have an adult child on their plan say that they鈥檝e chosen the arrangement because it saves both parties money.
- 21%听of parents who have or had an adult child on their family cell phone plan and pay/paid the entire bill say they offer no other financial support.
- 65%听of parents who previously had an adult child on their family plan said that the child chose to leave the plan.
Family plans save everyone money
Heather Morgan doesn鈥檛 think her daughter, Vicki, 30, will ever leave the family cell phone plan 鈥� but she鈥檚 OK with that.
鈥淚t鈥檚 such a good plan, and it鈥檚 very price effective,鈥� says the 64-year-old accountant from San Mateo, California.
Splitting the cost of a cell phone plan among family members can save everyone money 鈥� a lot of money.
Just look at the monthly cost difference between a family plan and a solo plan from each of the four major wireless providers.
Each carrier鈥檚 data packages differ, so we analyzed plans that provide around听2 gigabytes per person, per month. The costs include charges for the data package, line fees and device installment plan (assuming an iPhone 6S 16GB on each line, financed over 24 months). Taxes, fees and add-ons, such as insurance, aren鈥檛 reflected in these costs.
Cost of a family plan
| 听 | ||||
|---|---|---|---|---|
| Monthly data allowance | 15GB shared | 12GB shared | 2GB per line | 12GB shared |
| Monthly cost: family of four | $268.36 | $248.36 | $208.26 | $268.32 |
| Monthly cost: per person | $67.09 | $62.09 | $52.09 | $67.09 |
Cost to go solo
| 听 | ||||
|---|---|---|---|---|
| Monthly data allowance | 2GB | 3GB | 2GB | 3GB |
| Monthly cost | $82.09 | $77.09 | $77.09 | $92.08 |
Depending on the plan and the carrier, a family of four can save $15 to $25 per person, per month, on a shared plan versus an individual plan. That adds up to between $180 and $300 per year for each family member.
Keeping that money in their bank accounts can help some young adults get on their feet after college. That was the case with Brandon Schroth, 27, a digital analyst in San Diego who recently got his own cell phone plan after more than a decade on his parents鈥�. His 31-year-old brother was also on their plan.
鈥淚 was allowed to stay because I wasn鈥檛 making a lot of money at my entry-level job after I graduated from college,鈥� Schroth says. 鈥淢y parents felt better about asking me to get my own plan once I started making a decent amount of money and could support myself comfortably.鈥�
Finding financial independence
This isn鈥檛 a case of millennials mooching off their parents. More than half of parents who have or had an adult child on their plan (53%) said their child helps pay the bill.
Morgan, her husband and her daughter divide the family鈥檚 roughly $200 monthly bill in thirds. Her daughter pays her share each month.
鈥淪he鈥檚 independent; she doesn鈥檛 live with us or anything,鈥� Morgan says of her daughter, who works in sales.
Schroth says that part of the reason his parents let him stay on their plan was that he paid his portion of the bill each month and never went over their plan allowance.
When parents and their progeny do go separate cellular ways, it鈥檚 typically initiated by the child. Among parents who previously had a child age 18 or older on their family plan, 65% said the child chose to leave the plan. Reasons for leaving included wanting to pay for their own plan (24%), changing to a different mobile service provider (19%) and starting a plan with someone else, such as a significant other (17%).
Sometimes parents have to nudge their kids off the family plan, though. That鈥檚 what happened to Schroth and his brother, after his听brother racked up hundreds of dollars in data overages.
鈥淢y parents used him as a scapegoat as to why we should be on our own individual plans,鈥� Schroth says. 鈥淚 secretly think they were trying to find a reason for a long time but just didn鈥檛 want to approach the subject.鈥�
Of the parents who previously had an adult child on their family plan, 17% said they removed their child from the plan to lower their cell phone bill, and 15% said it was because they wanted their adult child to be financially independent.
Other takeaways
- The average age of adult children currently on a听parent鈥檚 plan is 28.
- Among parents with an adult child currently on their plan, 33% say that child is age 30 or older.
- Midwestern parents let kids stay on their plans longer. The average adult child currently on a parent鈥檚 plan in the Midwest is 30. In the Northeast, the average age is 26.
- Parents who are unemployed are听twice as likely to have a child over 30 on their cell phone plan than those who are employed 鈥� 48%, compared with 24%.
- Of the parents who pay or paid the entire bill, roughly 1 in 5 (21%) said they offered no other financial support to their adult child.
Note:听Parents surveyed were asked to think of their youngest child when responding, if they had more than one child on their plan. So the average reported age is likely on the low side.
Tips for saving on your cell phone bill
Parents and their adult kids can save hundreds of dollars each year by joining forces on a family plan 鈥� but there are听.
Check your usage:听Figure out听how much data you鈥檝e used during听the past three months by checking your bill or your carrier鈥檚 app. Once you know听, you might be able to save money by switching听to a听plan with lower monthly data limits.
Find data-saving features:听If you use the bulk of your data for streaming music or video, consider a carrier like听, which offers plans with unlimited streaming from sites such as Netflix, Hulu, Spotify and Google Music.
Not sure where your data is going? It鈥檚 easy to find out. On an Android, this information is in 鈥淪ettings鈥� under 鈥淒ata usage.鈥� On an iPhone, it鈥檚 in 鈥淪ettings鈥� under 鈥淐ellular.鈥�
Adjust your settings:听You can also lower your overall usage by making tweaks to your behavior and your apps鈥� behavior. 听For example:
- Connect to Wi-Fi when possible.
- Download playlists to listen to offline.
- Switch to a lower streaming quality on music and video apps.
- Turn off autoplay for videos on Facebook and other apps.
Go prepaid:听,听听and听听all offer family plans for a fraction of the cost of traditional plans.
For example, Boost Mobile offers听four lines with 2GB per line, per month, plus unlimited talk and text, for $100. That鈥檚 just $25 per line. Cricket offers 2.5GB per line for the same price.
Just keep in mind that prepaid carriers often require you to pay full price for your phone, rather than spreading the cost out over two years. Some carriers let you bring your own phone, if it鈥檚 compatible. You can also save money by听.
Methodology
This survey was conducted online within the United States by听Harris听Poll听on behalf of听NerdWallet May 19-23, 2016, among 3,010 U.S. adults 18 and older, among whom 1,619 are parents of children ages 18+ and own a smartphone/mobile phone,听and听of those 730 have or previously had an adult child on their family shared cell phone plan. This online survey was not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please听contact听Maitri Jani.
Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email:听ksheehy@nerdwallet.com. Twitter:听.
This story originally appeared on .
