Like you, I don’t have $649 lying around to get the new iPhone - but if you don’t mind an older (and smaller) iPhone, you can pick up an affordable Tracfone’s iPhone 5s for $199 at Target (I looked around, I believe this may be a Target exclusive as they are not available at other retailers like Best Buy or Walmart). Since Tracfone is a budget pay-as-you-go service, you do not actually need to pay every month or actually need to activate the phone to use all of its features.
I’m not actually sure if you can use other SIM chips in this iPhone, but if it is locked to that carrier... the iPhone, even without phone service, is still a valuable WiFi device (web, email), music, video, gaming, reminder, checklist, voice memos, book reader, pocket camera, health device (it has a built-in steps tracking), etc.
However, personally speaking, I feel that TracFone is the best budget cell carrier. It costs about $20 for three months (180 mins, 180 text, 180 mb data). Normal users will burn through the 180 mins in no time, that's why alternatively, when you're at home, you will want to use WiFi phone alternatives like Skype ($30 a year for unlimited calling to North America and Canada).
Additional costs: 1,000 text for $5 and 1GB for $10. Since the minutes and text and data carry over, you can actually stretch out your usage until you run out of service time.
PS, if you were looking to get an iPod, why not consider getting the iPhone 5s for the same price ($199) instead? If you decide to not use Tracfone, you can still use it as an emergency phone (by law you are allowed to call 911).