Being Smart About Personal Finances: 3 Tips to Trim Down Your Monthly Phone Charges
- By Bob Letterman
- Published 08/6/2011
The Treasury Department's inflation data may say otherwise but the fact is that from the gas pump to the grocery store, costs are skyrocketing. Yet the telephone bill is one place where savvy consumers can still save. For most people, phone expenses are a substantial element in the family budget.
Even though phone costs have dropped considerably in recent years, this remains an item that can be reduced through careful planning. These strategies will help you trim down your monthly phone charges.
Tip 1: Convert over to a shared-use cell phone plan
According to the Kiplinger Letter, the typical cell phone bill in the US runs approximately $55 a month. You might wonder how the average could be $55 with so many ads for cellular providers promoting $29 or $39 plans.
Part of the reason is that a few power users spend $89, $99 or more monthly. This is also partly due to taxes and miscellaneous charges such as 411. But a key reason is the fact that cell phone companies zap you on "overage".
Let’s say you have 1,000 peak minutes in your plan and this month you hit 1,099. At twenty five or forty cents per minute on overage, your cell bill suddenly shoots up $20.
Sound familiar? The next month you get to 900 minutes but you don’t see a corresponding reduction on your bill. Some providers say they solve this problem by allowing you to rollover your. And the rollover does help increase your peak minutes quota for the next month. Yet even then, you still get hit with overage if you exceed your increased peak minutes quota.
Shared use plans are the most elegant solution for this problem. Also called "family-plans", these plans allow you to aggregate the minutes of two or more users into a collective bucket.
Since variability is usually a function of individual usage patterns, these quotients tend to cancel out. Think of it this way: if you and your spouse both had individual plans for 1,000 minutes and one month you get to 1,100 minutes and your spouse reaches 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 no overage!
Tip 2: Do not use your long distance landline phone company to make foreign calls
Most long distance providers offer very good rates for domestic long distance. If you are a frequent user on a good plan you are most likely paying less than five cents on a per minute basis.
The difficulty is that international rates are still relatively high. For instance, forty cents a minute to India is typical, even if you pay the four or five dollars a month many providers charge for the privilege of getting lower rates.
In recent years, there has been an explosion of superior offerings. Sometimes called "PINLESS" dialing plans, these offerings enable you to call 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 "discount international calling" into a search engine you’ll see a lot of options. The basic way these services work is that you register one or more phone numbers and provide a credit card number.
They offer you a toll-free number and when you dial this number from a registered phone, you can call internationally without a PIN. Using the above example, you could reduce the charge from 50 cents to 15 cents per minute.
Tip 3: Start using a free phone conference service
For many families, phone bills escalate because of the need to have multiple conversations between family members on the same subjects. It is not efficient but this is the way most people have learned to cope.
In the last five years, there have been dozens of companies that have launched free conference calling services. All of them work on the same basic principle: they give you a PIN and a toll number to call. If all participants dial the same number and enter the same Pin code, they are put into a group call.
Apart from regular phone toll charges, there are no charges assessed by these conference call providers. If you have a large extended family, one thirty minute call could most certainly replace 5 to 10 one-to-one discussions for planning a trip or family event.
Unfortunately, it is often somewhat of a hassle to actually arrange these calls in the first place; consumers often are therefore reluctant to familiarize themselves with the mechanics of setting up a phone conference. Some conferencing services offer users a way to schedule the conference on the web, have the invitations emailed out and show the responses tracked on the website.
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 saving a lot. Applying these 3 tips will save the typical consumer 30% to 50% on a monthly basis, or several hundred dollars a year.
Bob Letterman helped build the conference calling industry's first service combining web-based scheduling with response tracking. Letterman has contributed to a number of technology discussions involving phone conference systems and related communication platforms.
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