10 Ways to Save Money on Your Phone Bill

I work in group that is essentially the telecom industry and for some years I had overseen the phone equipment and usage of a manufacturing complex. I have seen money fly away on phone bills that were not getting the person the best bang for the buck. This isn’t exhaustive, that document would rival “War and Peace” and would be out of date the day it was published. There is one item in this document that I was unaware of just one week ago. Let me try you with the basics, Phone Bills 101. I will start with the obvious.

Do you really need this phone?

The process of answering this question is basic to all that follows. The questions simply come back to this one, do I need this phone? Let’s ask them this way.

Do I need a cell phone? For most of us safety and the access are important. If they are not and the only reason for the cell is to talk to people for diversion while driving think that one again. You may be better off without the cell. No matter whether you need or like the cell for mobile use, if you are going to use the cell while driving, get one that works hands free. A speaker phone with car background noise is sometimes not good. A headset is generally much better. I personally like wired headsets better than the wireless Bluetooth ones. I buy them from a discounter so they are disposable. They also seem to have better voice quality. Until you find a style that you like, buy cheap. That way you can throw it away if you don’t like it or better, put it in the glove compartment for the day the one you like breaks. Remember that the life of a cell phone is about two years and any attachment you buy probably will not work on the next one.

The second question is pretty much the same; “Do I need a land line?” If you don’t have a cell, this is almost a given, “yes.” But if you have a cell you may not need a land line. Reasons for land lines include FAX and TIVO or some other item that needs the cord. There are Internet FAX solutions and network solutions for TIVO so even these are not deal breakers. I will deal with some of these later.

But if you chose to drop the land line you now must consider your cell you emergency contact phone from home. It must work. It must work every time. You have to keep it where you can find it. It must work if you have a protracted power outage. I know quite a few people who do not have a land line. Most of them are under twenty five years old and to them cellular is it. But I have at least one friend who is sixty five who has only a cellular. If you chose this option set up the AC charger on your night stand and put it there when you retire. The phone will be handy, where you can find it if you need it at night and it will be charged the next morning. It is discipline. If the battery starts to go bad, go on line, search for a replacement and get it. Without an offline charger that will charge the battery outside the phone a spare battery is not worth much. It will not be kept charged and if it isn’t charged it will not be of any value. Cellular batteries are too hard to change. One more thing, have an emergency plan for power failure. If you have a car charger an hour on it will charge it and this is not a risk on taking the car battery down. I would expect a car battery to run a cell for over a month if it were not used for anything else. I have a working solution that costs less than $10 that will give you several days with 8 AA alkaline batteries. I use it for cell, portable DVD player, etc. It is light enough to carry on trips in the event you need a cell to work in the woods for a couple days. Write me if you are interested in the plans.

What other deals are available?

Listen to the offerings or read them. I prefer to go on line and look for myself, make comparisons, see what I need in the plan and buy. Never buy unless you understand what you are buying. Make the person sell you. Never buy something you don’t need unless it is a package that saves money. I personally don’t use caller ID for screening calls so if it costs extra I don’t get it. Several years ago I needed two features on my land line. They wanted over twenty dollars for them. When I asked if they were in a package the person told me they were in with one that had several other features including caller ID. The package with my two features, caller ID and a couple others was fifteen dollars. Trust me, phone features and airline prices make no sense. There is even a case where they charge you more for a “feature” that saves the phone company money!

In addition to the company you are getting land line service from and have been for years there are other companies who provide land lines in some areas. You can in most cases keep your phone number if you like. The old timers are called ILEC’s, Incumbent Local Exchange Carriers. They are the incumbents, generally set in their ways, inflexible, believe they have divine right to provide phone service, which is much of the problem. There are others out there, CLEC’s, Competitive Local Exchange Carriers who are the new kids on the block. Many of these will not do residential but some will, particularly in large cities. They generally offer better pricing and feature rich services. Often the base rate is lower than the CLEC’s and includes most of the features anyone would want. The service is the same as Ma Bell and her accomplices although they will warn you these people haven’t been in business long. I will mention that some of the ILECs’ business plans show something called bankruptcy on the horizon. They are supporting an infrastructure that isn’t supportable with their current cash flow which is decreasing. Check for layoffs in this industry. They built out for two or three phone lines in a home in the nineties and it just isn’t happening. Now they have the debt load of that infrastructure. Like the financial community and the auto industry they blame regulation, most of which the ILEC’s lobbied and paid for with campaign money to keep the CLECS out.

Look also at VOIP (Voice Over IP) and a new offering called MagicJack. Vonage is one of the leaders in VOIP but there are other good ones. I have had Vonage with two lines in my home for over four years and recommended it to friends. None of them who have gone to it have gone back to Babylon, I mean Verizon. I picked Vonage over the AT&T offering for only one reason. They could give me the second line for ten dollars a month. The first one with unlimited calls to US, Canada, Mexico and Puerto Rico was twenty five. The second was tuned for a FAX and had only 250 free minutes which I never got near. My bill was just over thirty eight with tax compared to over fifty five with Verizon and the FAX and phone could work at the same time with Vonage. Verizon gave me two lines with one number. Recently I realized that with changes in my lifestyle I wasn’t using the Vonage phone more than about a hundred minutes a month. Watch if you do this. On most VOIP and cell minutes are combined inbound and outbound. I changed to a fifteen dollar plan for the first line. It cost me a ten dollar fee to change but in a month that was paid. Upgrades are generally free so if I were to go back in a month I would be ahead. I figured it this way. I was using 100 minutes. At 3 cents a minute 333 minutes are ten dollars. I would have had to use the unused 150 minutes and the 333 which is 483 minutes, six hours, or 16 minutes a day MORE to spend as much. If I start using it more I will go back to the unlimited plan. Till then I save over $120 a year. The ILECs want you to believe that 911 may not be there if you dial it from VOIP. This is half correct. If you don’t register it, yes. When you buy a land line nanny ILEC handles the registration. On VOIP you have to do that. It is a screen you complete when you buy and you have to supply a 911 address, one that the emergency services can find. You don’t want a fire truck driving up and down the road looking for smoke. If can’t be Rural Route 1. It has to be 643 Smith Road and it has to be right. If you don’t know your address, don’t get VOIP. But then, if you don’t know your address you probably can’t spell VOIP.

Don’t try to keep the phone company in business. Do what is best for you.

Phone companies seem to think you are there to keep them in business. They are there to provide you with service. Remember that in all dealings with them. I guarantee they are not interested in your welfare. I have been told that if I go to someone else when I need them they will not be there. Gee. And let me assure you, someone will be. There is money in this business.

Careful what you believe, phone companies will not lie but they will hide the truth

Phone company pitches are not much better than the ones in the used car dealers’ TV advertisements. “Get this fine phone service. It is the lowest price in town. We have the best service. Don’t go to our competitors. They will rob you blind.” One company charged my mom rent on a phone so they were responsible for fixing it. I believe it was a dollar a month, from before 1960 till after 1990. It was a darned good phone. It worked for over thirty years without any problems. Then one day it broke. She liked that phone. It was easy for her to use. When you get to about eighty you will understand that a phone you like is important. The repairman came out. He couldn’t fix it. But then, phone men don’t fix anything any more. They replace it. But they would sell her a replacement for $30. Heck, they should have replaced it, she had repair on it but they don’t do that any more, even thought they were charging for it. She paid more than $360 for service on a phone that wasn’t any good when it broke. I know the accountants will tell me it was closer to $400 with the time value of money but I think you get the point. She also paid for inside wire over these years, again at a dollar a month and NEVER used it, a tribute to the guy who wired the lines in 1956 when phone companies tried to provide service. And she had some piece of mind with that. When she wanted to change to another long distance carrier the person scared her by telling her that if she did that 911 may not work! There has to be a nice warm place in the regions of the damned for people who mistreat the elderly like this! She kept the service and continued to pay the loan shark price of $.38 a minute for long distance!

Buy “Inside Wire” only if you need it

This is not expensive but if you know how to troubleshoot at the DEMARC you probably don’t need it. This involves going outside or to the basement and plugging into the line with a phone and check. If you get dial tone there, the problem is inside. If not, call the phone company. If you don’t take inside wire service, check where this is and how it works before there is a problem. If the problem is inside it is your problem to fix. If you don’t know how it may cost you more to have someone do than have the service. If you know basic electricity you can probably fix it yourself. It is low voltage, not a shock or fire hazard. All you need is to find where it is broke or shorted and fix it. The first step is to unplug all phones INCLUDING FAX machines and modems from the phone line. Then check if it works. If it does, re-plug them one at a time. Plugging a phone line into an Ethernet port on a PC (it will fit!) will take the phone line down. If it isn’t one of the phones, work with the wire.

Buy a plan that meets your needs, not one that exceeds it. This applies to land line and cellular.

Look at what features you need, which ones you really want, how much they cost. Also look at the number of minutes. As an aside, most cell companies will allow you to change plans at any time, effective on the beginning of the next month if you need to push up or reduce the number of minutes and generally without any penalty.

Watch for life style changes that will impact usage and adjust the plan accordingly

My wife passed away in the summer of 2007. I had a cell plan with other phones. I couldn’t take hers off without paying over $150. It cost me $10 a month till the plan ended less than a year later. I missed it for a while but the land line usage had dropped and in fact had dropped a lot in the previous year. I cut it from an unlimited Vonage plan to 250 minutes a month. If something changes I can adjust it. Business and personal changes and family situations are reasons to look. I have seen guys blow a cell plan through the roof on a girl. A half hour a day is nearly a thousand minutes a month. If you have a small plan let’s say 500 minutes a month and do that your bill will be for 500 minutes, generally at about $0.35 a minute. That is $175. Double the calls to an hour a day and your bill is over $500. A plan for the extra minutes will probably increase your bill by $50 – $75.

Check usage periodically and adjust the plan accordingly

I have stated this before obliquely but it is so important that it needs to be repeated clearly. I discussed an example in the previous item. Look at your plan minutes and the current amount you are using. On Vonage the additional minutes are three cents each, even having a 1000 minute overage (a half hour a day – 1000/31 is about a half hour) is only $30. But the same 1000 minute overage on cell is $350 at the normal $0.35 rate. One is a bump in the budget. For most of us the other is a real ouch. I know one guy who got a new girlfriend about the time he got a cell. His bill was over $1,000 the first month and he was half way there on the second month when the bill came and brought reality. We had a situation with a modem in a business setting that cost over $2700 one month and the business unit ignored our warnings – we had an indication of the problem from the PBX warnings of a hung call the second day and told them. By the time they believed it we were nearly four weeks into the second month. They wasted over two weeks trying to figure out why their bill was up when a simple call to us would have answered it.

If a person has two numbers, call the number that costs you less

My sisters and children all have Verizon Cellular. If I am on the cell and want to call one of them I call their cell. If I call from my home phone I call their home phone. On the cell to cell it doesn’t even cost me or them minutes. On the landline it is limited by my 250 free minutes. If I call from my cell to a land line it costs me cell minutes. Your situation may be different, check your plan.

Watch your bill

If you don’t know what a charge is, question it. I’ve covered this more in a document on how to save money.

http://www.gomestic.com/Personal-Finance/Financial-Help-in-These-Trying-Times.369037

You may also enjoy and benefit from these two.

http://www.socyberty.com/Activism/10-Ways-to-Save-Electricity.150175

http://www.quazen.com/Recreation/Autos/10-Ways-to-Save-Gasoline.148181