That the world is rapidly changing is a cliché, and nowhere is it more true than in the area of telephone service. It was not so long ago that we had to watch the clock when we made long distance calls. People would stay up till just after 11 p.m. to take advantage of the lower rates, and families easily spent over $100 a month on long distance calls within the U.S. alone, while the charges to call Israel were so high that it was not even contemplated! Remember?
Thinking further back, to my childhood, I remember phones were black, clunky things, and it was illegal to buy your own phone or even purchase a longer cord. All the hardware was rented to you by “Ma Bell.” Well, long distance is now free. Phone calls to Israel cost a nominal amount, if that. And, of course, we all have cell phones. (Ever try to find a pay phone these days?) Cell phone companies even give you a phone for free. I got my smart phone (Samsung Galaxy 2) for only $10, delivered right from AT&T. (For the “senior” readers among us, a “smart” phone is a telephone, camera, phonograph, tape recorder, telephone book, alarm clock, stop watch, typewriter, flashlight, diary, pen, photo album, bank, encyclopedia, and map rolled into one – plus lots more! It is essentially a hand-held computer that is also a phone.)
Despite all this free stuff, I have noticed something interesting: We are all spending lots of money on telephone service, more then ever!
Let’s add it up. My cell phone with five lines costs $185 per month. That “low” price is due to the fact that our plan contains only one smart phone, and even that phone comes with a tiny data (internet service) plan. Then there is the family line, my work line, and the fax line. Assume $45 per month for each. Add to that internet service, through Comcast cable, at another $45 per month. (We switched to Comcast after I could not get decent service from Verizon. In Baltimore City, the super-fast Verizon FIOS is simply unavailable.) When you add it all up, we are spending $365 per month, or about $4,400 per year. Yep folks, it is pushing $5,000, and if everyone in the family had a smart phone, it would be over $5,000.
So, it seems that saving money on telephone service is very expensive. Truth be told, we are getting a lot for our money. I have eight lines and unlimited long distance. Still, the cost is adding up. The good news is that a lot can be done.
Goodbye Fax Machine
One of my computer-savvy clients saw my fax machine and showed me something interesting: efaxing. He explained that an internet company gives you a “phone number,” and when someone sends you a fax, it comes to you as an attachment to an email message. Each fax is a pdf file, which can be named and saved on your computer according to the date it arrived. No more lost faxes or misfiled papers. The service is amazing, and my cost is $6 per month. (I use MyFax, a competitor of eFax.) I cannot adequately sing its praises. It has not only solved my fax confusion but also served as the impetus for my entire paperless approach. When you need to send a fax, it can be done on your regular home line that can easily be wired through a four-in-one (copy/print/scan/fax) machine.
Goodbye Landline
Well, once I eliminated one expense, a light bulb went off in my head, and I looked for what else I could do to lower my telephone costs. Let’s start with your home line. I know people who have eliminated their landline altogether and just use their cell phone. I have kept my landline; I find the quality of cells not quite good enough. But I have also adopted a new concept called VoIP, meaning voiceover-the-internet-protocol. This is free or nominal-cost phone service from one of several companies that offer it over the internet.
Here’s how it works: You buy an electrical device that connects to your internet modem. You then plug the phone into the device. The software setup is not hard, and voila, you have free phone service for the rest of your life. I bought the Ooma machine. It is not completely free, as you pay some taxes and a small monthly fee for the premium add-ons. The quality of the call depends on your internet connection, but it is pretty good. Usually you cannot detect that it is not a landline. Whenever someone leaves you a message, you can get both an email and text message informing you to retrieve your voice message. That allows you to see who called and to return calls instantly. Very slick.
My recommendation: You can’t go wrong trying it out. The Ooma comes with a satisfaction-or-your-money-back offer. They assign you a new phone number, and if you like the quality of the call, you can transfer your home number and eliminate the landline.
If you really like it, you can eliminate a second line as well, as the Ooma can handle two lines. Now, since the Ooma machine works on electricity, if there is a blackout, you will only have your cells to use. However you can use your smart phone to go online to Ooma’s website and call-forward all home calls to your cell phone.
A new concept is Google Telephone, which gives you a virtual phone number. You can arrange for any call you receive on that number to be forwarded to wherever you are. This service works in conjunction with other lines, and allows for a lot of flexibility.
Cell Phones
Now let’s talk cell phones. We have had AT&T for several years and like it. The service and quality seem stellar to me. We pay for 1,400 shared minutes, but we never run out. Here’s why: We pay an additional $30 per month for free unlimited texting and free calls to any other cell phone. In addition, any leftover minutes from the 1,400 are carried to next month. I have a few thousand minutes in my “bank account.”
But here’s the change option: TMobile recently came out with reduced pricing. The plan comes with no contract. The first line is $50, the second line $30, and all additional lines are $10. You get unlimited calls and texts, as well as 500 mb of shared data. Under this deal, my monthly cost should drop from $185 to about $125, saving me over $700 per year. Furthermore, T-mobile recently announced that their superior LTE service was coming to only seven cities, at first, and Baltimore is among them.
All told, I should be able to shave over $170 from my starting point of $365 per month. That is a saving of over $2,000 per year, with improved service. Who can argue?
Here’s the catch, however: You do not get free phones. But even with the additional cost of buying your phones, you should come out way ahead. (You can buy your phone greatly reduced on eBay. Look for my eBay article coming up.)
By the way, get a plan that is based outside Baltimore City, which will eliminate the pesky Baltimore City telephone tax of $42 per line per year.
Here’s another cell phone option that is really, really cheap: For those who want a cell phone just for road trips, important calls, or emergencies but are willing to take an old-fashioned list to Seven Mile Market rather than calling home from the middle of the aisle to discuss what brand sprinkles to get, T-Mobile has a pay-as-yougo plan. You buy a phone for as little as $20, and then you buy minutes. A friend of mine buys 1,000 minutes for $100, which lasts him almost a year.
Share and Share Alike
Let’s take this a step further: Say two families have cell plans with two lines each. They could join together on one plan, thereby benefiting from the favorable rate of $10 per additional line. Remember, you pay only $10 for each additional line. Returning to the TMobile pricing, the first line costs $50 and the second line $30. A couple will therefore pay $80. Two couples would pay $160. However if they join on one plan, the cost is only $100. Each family saves $30 a month forever. (Taxes are additional.) Another couple added to the mix will bring each couple’s monthly cost to $40. Each couple will save close to $500 per year.
Speaking of sharing lines, has anybody toyed with the idea of two families sharing one internet connection? Will you folks in semi-detached housing please try it and let me know if it works?
Calling Overseas
If you are calling Israel, you have a fewoptions. Many Israelis now have an “American line.” This is a VoIP solution. Ooma might work here, or you can try the simple Magic Jack device. You plug a very small device into your computer, which gives you an American line. The Israel family plugs a similar device into their computer, which gives them a American line forever, with miniscule fees. Wow.
Another option for Israel is the popular Skype internet site, which allows free calls with video. Yes, you call Israel and see the person on the computer monitor – all for free. In addition, there is Google Hangout, which is like Skype but allows multiple people to be talking in one conversation via video. Of course, all these ideas require that the person has an internet connection.
If you are making regular calls to Israel to people who do not have internet, like yeshiva and seminary students, there are companies that provide it for as little as one cent per minute to landlines and 3.7 cents per minute to cell phones. I use CEB Communications out of Lakewood (call Chaim at 1-800-713-1223). It costs one cent per minute to landlines and 3.7 cents per minute to cell phones. I do not even have to enter a pin number. I simply call the Baltimore access number, which recognizes me, and I am able to call Israel directly. It recognizes my cell as well. On my cell phone I hit the contact named access, and then I can dial Israel directly. Calling Israel from your cell without first calling this service can run you well over a dollar per minute!
Putting all these savings into play can drastically cut your costs and potentially increase the quality of your phone quality. So give them a try and let me know how it works out.â—†
Eli Pollock is a CPA in Baltimore and can be reached at elipollock2@yahoo.com
