Should I get a ipod touch or an iphone?

I really need to upgrade my ipod classic - its hardware/battery is really starting to fail. I also have one of those phones free with my verizon plan… Its really crappy and simple. Should I keep my regular phone and just get Ipod touch to replace or get the iphone?
I'm looking into what's coming out in september…

Added (1). I also don't have a lot of money and am saving for college - is and iphone and the plan going to break the bank?

Get the iPhone

Well if you get an iPhone you'll have to upgrade to a data plan which costs more. If you don't mind paying more then it'd be worth it to just get the iPhone. Otherwise, go with the iPod Touch. I'd hold off though because it's rumored an iPod Touch 5 may be coming out soon.

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