How To Save Money on Telephone Service

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Technology changes everything. Ten years ago, almost everyone had a traditional landline telephone. 20 years ago I lived in a town where you only had to dial the last 4 digits to make a local call. Before that it wasn’t uncommon to have a party line, where people shared a phone line and if you…

Technology changes everything. Ten years ago, almost everyone had a traditional landline telephone. 20 years ago I lived in a town where you only had to dial the last 4 digits to make a local call. Before that it wasn’t uncommon to have a party line, where people shared a phone line and if you weren’t careful, they could listen in on your calls. Now you can get call waiting, caller ID, and a host of other features via a traditional landline, cable connection, or the internet. Or you can skip the landline altogether and just use a cell phone, which is what I have done for the last 7 years. Make sure to shop around for the best deals on cell phone providers and learn what cell phone company will pay the early termination fee for you if you choose to change carriers!

But I recently found myself making and receiving more phone calls and I need to add a landline. But I don’t want to pay $20 a month just to have a local number. So I looked into my options, and I realized there are a lot of ways you can save money on telephone service.

How to Save Money on Phone Calls

Here are some ways you can save money on phone calls from home:

Do you need a landline?

The first step is to determine if you need a land line, and if so, how many lines you need. When I was in high school, my parents had two telephone lines. It was only a couple dollars extra per month, and the convenience was a nice luxury. Soon after we left home, they realized they could save a few dollars per month by dropping the extra line. Shortly after that, they realized they could join the growing number of people who dropped their land lines altogether. Now I call their call phones.

Which options do you need?

Technology has grown by leaps and bounds over the last few years. It’s not uncommon to find features such as call waiting, caller ID, and the half dozen other add ons. You may be able to save a lot of money if you drop those features. But many of the features are worth paying for. For example, new features include voice to text services, in which automated technology transcribes your voicemail and sends it to your inbox. This can be a great time saver, and easy way to get messages more quickly (or screen calls).

Save money by bundling your service

If you watch cable TV, you can often save a substantial amount of money by bundling cable and telephone service, or even go with a triple play package and bundle cable, telephone and internet service. Many bundled options often come with discounted extras or even free additions like caller ID, call waiting, etc.

This wasn’t an option for me, since we don’t watch much TV and we cancelled our cable service. Instead, we have high speed Internet and we use a VoIP telephone system, as described in the next section.

Switch to internet based phones – VoIP

Voice over Internet Protocol (VoIP) technology is a great way to save money on your cell phone bill. There are varying plans and companies that provide VoIP service, so you will need to shop around a bit. Here are some VoIP options:

  • Skype – offers free video calls and online free instant chat and free video calls to other Skype members. Long distance calls to a landline or mobile number ring in at at $3 per month or 2.1 cents a minute.
  • magicJack uses the same VoIP technology and costs $45 for the hardware and $19.99 a year for unlimited long distance calls. There are some limitations to some of their older systems, which require the computer to be turned on for the system to work. However, the newer version doesn’t require this.
  • Ooma has a higher up front cost ($200), but doesn’t have monthly charges other than your local taxes. Ooma is very easy to set up.
  • Google Voice – you can send and receive phone calls through your Gmail account by downloading a plugin and linking your Gmail account and Google Voice account. This is a great option for free calls (I used it extensively this week and like the results). You can also use Google Voice with your cell phone, which is a great way to protect your regular cell phone number when selling things through Craigslist or Ebay.

Verdict: I have been an Ooma customer for over five years now, and love their service. I highly recommend looking into their offerings in more depth.

Look into calling cards for international calls

If you make a lot of international calls and don’t care to use VoIP or other technology, then look into calling cards, which can often be much cheaper than your long distance plan. Try to avoid using an operator to connect you to an international call, as those calls typically have a surcharge added.

There is no one size fits all phone plan

Telephone service can be as personalized as you want it to be, so play around with the available options to find the one that best meets your needs and budget. My guess is you can knock several bucks off your bill each month.

Google Voice is a free solution for local calls, and will work for many people. However, I wanted something more robust, so I chose to go with Ooma because it more user friendly than some of the other options (i.e. you don’t have to have your computer on at all times to use it). I’ve been happy using Ooma for the last five years and have no plans to move elsewhere at this time.

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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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  1. John says

    My have times changed! I can remember back when my parents had a party line and I thought it was so cool to pick it up and here someones conversation.

    I would absolutely love to cancel either my cell phone or land-line. The problem that we have is that we need the land-line to use our fax machine and hook our Dish into (or we get charged an extra $5 per month). I would cut the cell phone, but I commute about 50 minutes to work and worry that I will break down somewhere and need it.

    Glad to hear that Google Voice is a nice option. I have been wanting to try it out and may give it a shot.

    • Ryan says

      John, you should still look into the Ooma and MagickJack, both of which offer fax services. That won’t solve the $5 surcharge from Dish, but it may offer a cheaper alternative in the long run.

      • John says

        Thanks for the information Ryan. The other knock that I have on cell phones is the coverage around our house is awful. We live in a fairly new development and the cell coverage of most providers is extremely weak.

  2. Abigail says

    I’m one of those rare people who’d rather have a landline than a cell phone. It probably doesn’t help that we’ve never had great reception in any of our apartments.

    Still, I work from home and so rarely find myself needing to use a phone when out and about. I know smartphones are fabulous and the lure of Internet anywhere — plus all those apps — make it hard to imagine a life without a cell phone. But most people really don’t need one. At work, there’s a phone. At home, there’s a phone. For emergencies? Have a prepaid.

    Despite the much larger savings, people won’t get rid of their cells though. So yes the more realistic approach is deciding whether you need a land line at all. Just don’t forget that a basic, no-frills line can run as low as $10-15 a month. So if doing away with your home phone means you have to increase your minutes too much, it might not be worth it.

    Our solution is bundling, which you mentioned. We get DirecTV, phone with unlimited long distance and DSL for just over $100 a month. Since our other utilities are included in our rent, that’s not a bad deal at all.

    • Ryan says

      It’s all about individual needs. I know plenty of people who only use a cell phone because they need the connection for work. But in your situation, it doesn’t make sense to have a cell phone as your primary phone. The key is understanding your needs and finding the best solution to fit those needs. 🙂

  3. Liane says

    This is a great topic – I can’t see canceling our land line in the foreseeable future, reason being is that there still is a lot of delays and confusion between police and fire departments in our area when a 911 call is placed on a cell phone. My husband has a medical condition and I’ve had to call 911 several times in the past. That being said, we recently canceled our Sprint plan for our cell phones and opted for a Tracphone. This saved us $80 a month, we get minutes when we need them, and we make sure we’re not using them unnecessarily. Also, as I’ve increased my use of Facebook to communicated with long-distance friends and relatives, I no longer need that service on the landline or cell phone.

  4. Jenny says

    We found Vonage the best deal for International calls. It depends on the country you plan to call, but with the plan we are on we have unlimited calls to Ireland. We pay about 1/4 of what we paid before we switched…and the Irishman can watch entire Liverpool game while on the phone with his family for no extra charge.

    • Ryan says

      I think there are better options for domestic calls than Vonage, which is why I didn’t include them in the list. But it’s good to hear that it works well for you with international calls. 🙂

  5. K.C. says

    We just dropped our landline (is it one or two words?) after AT&T increased our base rate by another $2.00. However, our DSL service was switched to DSL Direct and increased by $7.00 a month since we no longer had a landline, but we still realized a net savings of nearly $20.00 per month.

    We decided to try magicJack and are happy with it so far. It assigns us a phone number for incoming calls and LD is unlimited and free in the U.S. Last week we took it with us to the mountains and plugged it into the motel phone, connected our laptop to the motel WIFI, and made long distance calls free of charge. Worked like a charm.

    We dropped our subscription cell plan in favor of pre-paid. We use Skype for international calls, very cheap. All in all we’ve reduced our phone costs by 50%.

    Ryan, in doing my research, I understand that Ooma now charges a monthly fee for new subscribers. Does Google Voice assign a phone number for incoming calls? I understand there is a monthly fee for an assigned phone number to receive incoming calls with Skype.

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