A hundred years ago, everyone considered the telephone to be a luxury that hardly anyone had. Now, almost every household has some sort of phone service, and most of us consider it a necessity. But can your budget afford it? Here are your options:
No phone
Bad option! You have no way to keep in touch with your family, boss, doctor’s office, school, etc. And good luck finding a public pay-phone when you need one.
Traditional landline
Telephone line that runs through old copper wires into your home. This is being phased out by AT&T, although it’ll still be around for a long time in more rural areas. You’ll pay a base amount of $25-27 a month (up from $17.55 in 2010), plus about $10-15 for an array of charges, surcharges, access fees, and taxes. Expect your actual bill to run about $40 a month, and that’s just for local calls. Long distance calls and Caller ID are extra.
VoIP landline
This is what most people with landlines have. Instead of traveling through the old copper wires, your voice is transmitted over internet fiberoptic lines. You can buy VoIP landline service from AT&T (U-Verse) or your cable company (Comcast/X-finity). These companies typically pressure you to also buy tv and internet service from them (they call it bundling), and will give you a discounted price for a year or so, then the price goes up. It’s hard to tell how much of the bundled price is actually for phone service. If your internet or cable goes out, so does your phone. A 24-month contract is usually required.
Contract cell phone
This is cell phone service from companies like AT&T, Verizon, T-Mobile, or Sprint, for a contracted amount of time (often 2 years). With this type of phone, you can make calls, send texts, check your e-mail, use the built-in calculator, take pictures, play videogames, watch netflix, listen to music, or read an e-book. You may pay hundreds of dollars for your cell phone. While rates vary enormously, the average bill is $73 a month.
No-Contract cell phone
This is “pay-as-you-go” service. You can buy both phones and phone calling cards from Tracfone, Net10, Virgin Mobile, and Boost Mobile at Walmart and most grocery stores. A phone can be bought very reasonably ($15-$50) and monthly service ranges from $10 a month to about $50, depending on much time you spend on your phone.
Now the contract companies are jumping on the idea, offering no-contract calling cards as well (Sprint Pre-Paid, AT&T Go, Verizon Prepaid, and T-Mobile Pre-Paid).
Skype phone
This is telephone service over the internet through the Skype company. It costs $30 a year for a regular telephone number, and $30 a year for unlimited calling anywhere in the United States, a total of $60 a year or $5 a month. You will need a good internet connection and a device with the Skype application on it (a computer, laptop, tablet, etc). The service can be a little buggy at times, but it’s improving every year.
So there are your options. Telephone service can easily add up to thousands of dollars a year. That’s a big part of your budget. Ask yourself how much talking you actually do on the phone. Do you really need to surf the internet on a cell phone, or could you just use the internet at the public library for free? Instead of buying a $600 phone that takes great pictures, could you just buy an inexpensive digital camera and a more basic phone? Do you need both a landline and a cell phone? Look at all your options and see what works for you without breaking your budget.
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