Your Apple Watch will work with your iPhone. You do not need a data plan to enjoy all of the functions of the Apple Watch. The data plan is really helpful if you have your Apple Watch on and you do not have your iPhone with you.
Most Apple Watch models come with an option of Wi-Fi Only or Wi-Fi+Cellular (Data Plan). If you get the one with Wi-Fi Only, then you do not have to worry about a data plan because the Apple Watch will not be capable. If you get the one with Wi-Fi+Cellular capability, then you can simply not add the data plan and use the Apple Watch with your iPhone and Wi-Fi.
Axel F.