We’re Saving $444/yr

If you could pay between $200-$250 one time and never pay for local and long distance calls again, would YOU do it? We had to ask ourselves the same question when we found out about the ooma Core VoIP Phone System with No Monthly Phone Service Bills.

We spend a LOT of time looking into saving money on utilities. We’ve been focusing lately on looking for ways to reduce the cost of telephone use. This includes wireless (cell) phone service, local phone service, and long-distance calling use.

Many cell phone plans come with unlimited local and long distance calling. At first, we assumed this would be cheaper, but when we ran the numbers (using a spreadsheet) including the monthly cost, hardware (new cell phones) cost, etc. we did not find using unlimited cell phone plans (or any cell phone plan) to be the right choice for our family. Collectively, we use about 400 minutes of cell phone use per month (between two lines).  Our monthly cost for long distance and local calling is approximately $47/mo. on average. Upgrading to unlimited cell service, or even a limited plan with enough minutes would cost more than this amount per month.

We were already unhappy with how much cell phones cost our family  (more on that another time), so increasing the bill is not appealing.

We also considered magicJack: PC to Phone Jack, but don’t want to keep a computer running constantly. For those who don’t mind, magicJack is an even cheaper alternative than ooma. Our friends overseas really like this because they can get a U.S. phone number with unlimited calling for $40 one-time fee! You might consider this if you want ultra-cheap long-distance.

Further, we looked into using free services such as Skype, Gizmo5, and Google Voice as alternatives. We have accounts with each, but don”t see them as a practical alternative to replacing local and long distance calling, and certainly not cell phones – but they’re great for calling overseas for really cheap. These services too require either a computer to be on, or expensive phone upgrades. We also have friends who promote long-distance services, but we wanted to eliminate the bill – not just reduce it.

After reading copious reviews of Ooma and talking a real-life user, we decided to buy the Ooma. From our calculations, and those who own them, this will drastically reduce our local and long-distance, with a 10-12 month payback followed by unlimited local and long distance calling without paying another bill again!

Here’s what else we like about the Ooma:

1. We can “port” our home telephone number (unlike many of our friends who have gotten VoIP systems like Vonage, etc). No need to change your number!
2. It’s easy to install. Plug ooma into your home network router, plug phone into ooma, register.
3. The device is simple – a few buttons – no rocket science.
4. Voicemail can be checked from Ooma device, phone call, or online. Messages can even be emailed to us as MP3.
5. We can get all sorts of cool additional services for $1o0/yr (Ooma Premier) –  again, totally optional. If we do this the first year, the price includes the charges to port (usually $39.99)

Now, this is not something everyone can use because you must have a broadband (DLS, Cable, Fiber Optic) internet connection. Also, if your broadband internet connection does not connect to a router, you’ll need one of those ($50 or less likely). We have DSL which currently costs us $31.99/mo. Because we will be removing our local phone service, we will have to change our DSL to “naked” DSL with a price increase of $10/mo. This is factored into our savings estimate below.

Here’s the math:

• Existing Cost of DSL, Local and Long Distance per Year: $948.47
• First Year Cost with Ooma, Extra “Scout” (which I want, but most people would not need), phone # port, and increased DSL Cost: $776.88
• First Year Savings: $171.59
• Recurring cost per year after first year: $503.88 (for DSL only, no local or long distance charges any more)
  *(+$100 if you want optional “premier” service)
• Yearly savings (years 2 and on) $444.59 ($344.59 if you subscribe to Ooma Premier)
• Savings over 5 years ( first year savings + ( yearly savings x 4 ) ) = $1949.95
  

Our long distance charges are $16/mo on average – That’s probably a bit lower than most people, so most would experience even bigger savings than us. Hope this news helps you find an affordable alternative to your local and long distance calling. Let me know if I can help you figure out your savings!