Summarize:

There are many different types of smartphones available with all sorts of different features. They come in a wide range of different costs too. Decide what features you will actually use to determine what types of features you don't need. For instance, while two different phones may both have a camera, the quality of the camera lenses (especially in terms of megapixels) may differ substantially. Another important specification is storage. If you want to store photos, music, and more on your phone, you'll need a phone with more storage, which will increase its cost. Many retailers will offer financial incentive to trade-in your old phone. You can also sell your old phone to a third party to offset the purchase of your new phone. You can usually get the most money for an old phone from websites that will quote you a price, send you a postage-paid box, and send you money when they receive your phone. Specific online programs include Gazelle, Amazon, NextWorth, uSell, and EcoATM. Stores that will buy back your phone include Best Buy and Radioshack. Be sure to check multiple stores/websites and get the most money for your old phone. Refurbished smartphones are often indistinguishable from new ones, and can costs hundreds of dollars less. You can get refurbished phones from carriers or retailers. Note that some refurbished phones are labeled "certified like-new." If you know you want to purchase your phone through a carrier, compare the overall cost of the phone and service from several different carriers. Often, carriers will try to lure you into a contract by making the phone seem inexpensive. It's important to understand that the cost of the phone is often built into the contract. For instance, one carrier may offer the phone for "free" with a two year service contract, but charge $80/month for service. Meanwhile, another may charge you $300 for the phone if you sign a two year contract that costs $40/month. In the long run, the second option costs less ($300+$960 over two years = $1,260, compared to $1,920 over two years), though you have to pay more up front.
Determine what specific features you'll actually need. Trade in your old phone. Buy a refurbished phone. Compare options from multiple carriers.