Now that you know what you're up against, here are ways to save:

Ask yourself whether you really need a smartphone. If you use your phone mostly for talking and texting, you may not want or need to move up to a smartphone. The National Endowment for Financial Education warns that "tech gadgets can overload a tight budget," so you shouldn't jump on the trend if you don't have money to spare.

Consider an older or less powerful version. Today's dazzling new device is tomorrow's bargain. Consider the iPhone 3GS that so many people stood in line to get three short years ago. Today, you can get it for free with a two-year AT&T contract. You also might consider the "entry-level" smartphones, but realize that they typically come with slower processors, fuzzier cameras and lower-resolution displays.

Or consider paying full price. It's counterintuitive, but many users could be better off paying the full price for a smartphone and opting for a pay-as-you-go plan from a provider, such as Cricket or Virgin Mobile, rather than tying themselves to a two-year contract.

Get the right data plan. Here's what you need to remember: You can change your plan any time you find yourself using less or more data than you expect.

If you're new to smartphones, consider opting for a smaller data plan and carefully monitoring how much you're actually using each month. (Your phone usually keeps track of this information; any wireless rep should be able to tell or show you where to look.)

If that's too much effort, you should at least review your bill to see if your data usage is what you expected it to be and if you need to dial your plan up or down. A service like BillShrink can help you analyze your usage and find the best plan.

Stick to hot spots. Here's your new mantra: "No Wi-Fi? Don't stream." Streaming movies, television shows and music eats up a lot of data. So can email programs or apps that are set to update automatically. To keep a lid on costs, use data-intensive programs only when in a Wi-Fi hot spot, and disable automatic updates for other programs.

Skip the insurance. Since you're unlikely to get a new phone, you likely would be better off saving the premiums and buying a used phone if yours breaks or disappears. Or you could do what Consumer Reports recommends: Keep your old phone, so you can reactivate it if necessary, and use it until you qualify for another free or subsidized phone.

My take: Insurance is best reserved for catastrophic expenses you can't afford to pay out of pocket. If you really couldn't afford to replace your current phone, then you've bought too much phone.

Accessorize carefully. It's convenient to buy your case, headset and other accessories where you buy your phone. It also can be really expensive. You'll almost certainly get a better deal on Amazon.com, eBay or another online outlet. If you want to buy local, you can check out what's available at your neighborhood mall kiosk or swap meet. Be absolutely sure the device is compatible with your unit; a charger or case that works with one version of a smartphone may not fit with another.

Look for free and discounted apps. Deal sites such as DealNews and tech sites such as Lifehacker regularly alert their readers to temporary sales on apps. Always read reviews before you buy, and consider listening to the experts on which apps are worth the money (Lifehacker curates a list here. Another tip from Lifehacker: If an app is temporarily free and you think you might want it someday (but perhaps not right away), download it and then delete it from your device. You can later download it again for free, even if it's gone back up to its regular price.

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Resist the upgrade urge as long as you can. Smartphones are awesome. That's why so many of us have them. Once you have one, though, virtually every new version will offer some compelling new feature to entice you to upgrade. But every upgrade means you'll spend more money, use more data and (probably) have to buy new accessories. Remember, once again, that the latest and greatest will soon be upstaged by something even better. Waiting out the upgrade cycle a time or two can really pay off in less interim spending -- and ultimately a cooler phone, when you finally do give in to the gotta-have-it urge.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.