Depends.
I had my old iPhone 5 for about three years, then bought an LG G3 because I really wanted a bigger screen. Then the stupid LG died after 14 months (a month after I sold my iPhone). Eventually I realised that the budget smartphones had progressed to a point where I probably didn't need a flagship model anymore. I've got a Moto G (original) that I used for a while, but realised that it wasn't quite good enough for what I want in a couple of areas (no SD card is a big deal when you've only got 8GB of space, and the camera is woeful).
I'm now using a cheap Huawei Y6 Elite that I bought from the supermarket for $99 (it came with a $40 prepaid starter kit). It could use more RAM and more internal storage, but I can't complain for $99, it does what I need (and has really good battery life, given the lower-end parts). Hopefully I'll get 2 years or so from it. Naturally a phone with the extra RAM and storage (for $149) was released a few days after I bought the Huawei.
I don't need a $1000+ smartphone to use Spotify or Facebook, or to use mobile banking apps (although no NFC means no Android Pay, but whatever, both of my cards have Visa PayWave). The cameras on the high end phones are better but I can take decent enough shots with the Huawei.
Prepaid is awesome.