Steadfast FinancesKeeping In Touch is Expensive, but Getting Cheaper

Keeping In Touch is Expensive, but Getting Cheaper

Filed in Budgeting , Cutting Expenses , Saving Money 5 comments

iphoneg3dude (flickr CC - rudolph schuba)Have you ever stopped to consider how much money you’re paying to keep in touch? I’m betting that a good percentage of you haven’t.

Not yet anyway!

If you actually take the time to add up the amount of money you dish out every month to pay for the Holy Trinity of telecom cash cows — home telephone, high speed internet and cell phone — the total sum might surprise you.

It may even prompt you to make a few changes to your telecom services.

Just for fun, let’s take a look at what many households (like my parents) still dish out every month just to say wassup once a week and do the regular rounds with their other friends, relatives, etc. 

  1. Landline. A tradition landline from an old school provider like Verizon or a VoIP phone from Vonage will cost you anywhere from $25 to $100 per month depending on your monthly plan, bundles, and long distance plan.
  2. Cell Phone. Whether you have a bare bones cell phone plan or a smart phone with unlimited minutes, data, and texts, you can expect to pay anywhere from $40 to $110 per month.
  3. High Speed Internet Connection. The pricing of DSL internet compared to Cable internet doesn’t vary by much, but you’ll likely pay $35 to $50 per month to access to the world wide web. (This is a mandatory expense if you want a VoIP internet phone.)

Using these price estimates, you can pay anywhere from a $100 per month with several bare bones plans, or if you’re of the more spoiled and chatty variety, you’re looking at somewhere around $260 per month.

While you might say that $100 to $260 per month isn’t that big of a deal, try scaling up the numbers to what you’ll be paying annually.

Not to be overly antisocial, but do you really think all of your conversations are worth anywhere from $1200 to $3100 a year? Couldn’t this money be better put to work in other places?

When you think about it, the annual total in telecom costs you could be paying may be equivalent to one week, or maybe even several weeks, of your annual bring home pay. That’s a lot of hours at the grindstone just to say “Can You Hear Me Now?” or make a late night bootie call.

Cutting the Telecom Fat

Unless you’re running a small business, you probably don’t need all three of these services. They’re expensive, they’re redundant, and you probably use one or two much more than the remaining third.

So if you’re trying to cut costs, here are a few options:

  1. Kill the landline. Even the CEO of Verizon has publicly stated that landlines are a dying industry. If you have a cell phone, chances are your home phone is nothing but a backup.
  2. Switch to VoIP telephone services. I don’t mean switch to high priced services like Vonage or those offered by your cable provider, but a more cost effective option like Magic Jack or relying solely on free user-to-user calls using Skype. I made the switch to MagicJack in December 2009, and I’ll be saving $243 in the first year (81%) and $280 (93%) per year every year after.
  3. Go completely wireless. Up your wireless minutes or get an unlimited talk, text and data plan to cover all of your telecom needs. If you need to use a landline, you can always use your work telephone during your lunch break if you’re in a pinch.

Bottom line, a cell phone and a high speed internet connection is more than enough communication options for the average household. Considering the transportability of a mobile phone, and the Internet’s huge disintermediation effect, these two choices are the most cost effective means of keeping in touch.

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Posted by CJ   @   15 February 2010 5 comments
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Feb 15, 2010
10:45 pm

We spend about $1,500 a year for high speed internet, land line with all the bells and whistles, and two bare-bones cell phones.

We can’t cut our land line because we have spotty to nonexistent cell service at our house (cell phones are for travel/ in the car). We tried the MagicJack but are not overly impressed and it was too bulky/ finicky to replace our land line in the end.

My husband and I both work from home and $1,500 a year is a fraction of what this technology enables us to earn, so it;s money well spent.

Feb 15, 2010
11:10 pm
#2 Matt SF :

$1500 a year is respectable considering how much you’re using them. Plus they’re a justifiable business expense.

But you thought the MagicJack was finicky? I can’t say I’m in love with mine because it’s definitely a trade down in some respects (Comcast repeatedly craps out on me so no telephone), but the sound quality and usability has worked out well over the last 3 months.

Feb 16, 2010
6:56 am
#3 Kyle C. :

As an iPhone owner I pay a good clip for cell service but it is the only phone I have. My wife is required to have, and apparently answer, her work cell all the time so we don’t pay for that one. Internet is a necessity for me not only for my blog bur for my day job as well.

I really don’t see the necessity in home phones anymore, I used to keep one around for faxes but you can do that online now for a lot less than a monthly phone bill

Feb 16, 2010
10:24 am
#4 Evan :

The land line kills me paying that knowing our cell service could cover it all, but The Wife works from home…so we deduct it (still hurts paying it monthly).

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