This is for the people who, like me, turned on two factor authentication on your account and are wondering why the Watch is sending messages as a text message instead of an iMessage. Turns out that you have to generate an App-sepecific password for your iMessages account. Here is what you need to do: 1. Go to appleid.apple.com 2. Select "Password and Security" 3. Click on Generate App Specific Password 4. Enter "iPhone Messages" or something similar in the "App Name". 5. Click "Generate". 6. Keep this window open. And now on the iPhone: 1. Go to Settings -> Messages. 2. Turn off iMessage. 3. Turn on iMessage. 4. In the password field, instead of your normal apple id, enter the app-specific password generated above. 6. That's it! Apple Watch will now use iMessages instead of text messages. It's pretty weird that there's no information on this and Apple even recommends people turn on 2FA. If you don't generate an app-specific password and enter in your normal password for iMessages, the messages get sent as a text message instead, burning through your SMS total.