3 good ideas to trim down your phone expenditures

22 Nov

These days consumers are clearly feeling the pinch of increasing prices. From the gas station to the grocery market, costs are leaping higher. Yet the telephone bill is an area where savvy folks can still save. For most people, phone expenses are a not insubstantial line-item in the family budget. Notwithstanding the fact that telecom costs have fallen considerably in recent years, this remains a cost that can be reduced through prudent planning. The following three strategies will help you accomplish this goal.

Tip 1: Change to a shared-use plan for your cell phone bill

According to data published by the Kiplinger Letter, the typical cell phone bill in the United States runs approximately $55 per month. You might ask how the average could be $55 with so many ads for cellular companies promoting $29 or $35 plans. This is partly because a few power users spend $79, $89 or more monthly. Part of the reason is taxes and miscellaneous charges such as directory assistance. But a major reason is the fact that cell phone companies hit you on “overage”. Let’s say you have 1,000 peak minutes in your plan and this month you reach 1,099. At twenty five or forty cents per minute in overage, your cell bill suddenly rockets up twenty dollars. Seem familiar? The next month you get to 900 minutes but there is no corresponding drop in your bill. Some companies say they solve this problem for you by allowing you to rollover minutes. And the rollover does increase your peak minutes quota for the next month. Yet even then, you still get hit with overage if you exceed the increased peak minutes quota.

Shared use plans are the best solution for this problem. Also known as “family-plans”, these plans allow you to aggregate all of the minutes of two or more users into a collective bucket. Since variability is usually a function of individual usage patterns, these variability quotients tend to cancel out. Think of it this way: if you and your spouse both have individual plans for 1,000 minutes and in one month you get to 1,100 minutes and your spouse hits 900 minutes, you’re in for overage surcharges to the tune of 100 minutes. If you have a shared-use plan, your total comes in at 2,000 minutes and there would be no overage!

Tip 2: Do not use your regular long distance landline provider to dial international calls

Most long distance phone companies offer excellent rates for domestic long distance. If you are a reasonably frequent user on a good plan you are most likely paying less than 5 cents on a per minute basis. The difficulty is that international rates are still relatively high. For instance, fifty cents a minute to India is typical, even if you pay the four or five dollars a month many companies charge for the privilege of getting lower rates.

In recent years, there has been an explosion of superior options. Sometimes known as “PINLESS” dialing plans, these offerings allow you to call most anywhere in the world at rates 40% to 70% less from your landline or cell phone without needing to remember a pin code. If you type the phrase “cheap international calling” into a search engine you’ll see a plethora of options. The basic way they work is that you register one or more phone numbers with the service and input a credit card number. They give you a toll-free number and when you call this number from a registered phone, you can call any country without needing a PIN code. Using the above example, one could cut the charge from 50 cents to 15 cents per minute.

Tip 3: Use a free conference calling service

For many families, phone charges escalate because of the need to have multiple conversations between family members on the same topics. It is not efficient but this is the way most people have learned to cope. In the last few years, there have been dozens of companies that have launched free teleconferencing services. All of them work on the same basic idea: they give you a PIN and a toll number to call. If all participants call the same number and enter the same Pin code, they are put into a group call. Apart from normal toll charges, there are no charges assessed by the companies. If you have a large extended family, one 30 minute call could most certainly substitute for 5 to 10 one-to-one discussions for planning a trip or family event.

Unfortunately, it is often somewhat of a chore to actually arrange these calls in the first place; consumers often are reluctant to familiarize themselves with the mechanics of setting up a conference call. Rondee is an example of a free conference calling service which is trying to address this challenge. It offers users a way to schedule the conference on the web, have the invitations emailed and show all the responses tracked on the website. As with many corporate grade conference call companies, Rondee allows calls to be recorded.

With consumer prices escalating, there’s not a lot most people can do to fight back. But telephone expense is an area where being smart can mean substantial savings. Applying these three ideas will save the typical consumer 30% to 50% monthly, or several hundred dollars yearly.

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Posted by on November 22, 2011 in Uncategorized


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