I‘ve been finding ways to cut back our monthly expenses lately, and I shared some of those tips in a recent post titled, “How To Save Money On All Your Regular Monthly Bills“. One of the places I thought that most people could end up saving on their regular monthly expenses was in their phone bills.
Many people pay way more than they have to for expensive smartphone plans and landline phone service. The average cell phone bill runs close to $100 every month, and if you have a landline as well that can add on another $30-60 depending on where you live, how many features you have and how many state, local and federal taxes are being levied on your monthly bill.
A couple of years ago we addressed our overly expensive cell phone plans by dumping our regular contract service, and buying prepaid cell phones from Virgin Mobile. We now pay no more than $40-50/month for two cell phones, one of them a smartphone.
We’ve been saving a lot of money on our cell phones for the past couple of years, but we’ve still been paying for an expensive landline phone. The cost for the phone line keeps going up, and the only reason why we hadn’t dropped it yet was because we needed it for our home security system. Now that there are other options for that (cell and internet based security systems), we’ve finally decided to take the plunge and switch from a landline to VOIP service.
Cutting The Phone Cord, Going To VOIP
When we decided to switch to a cheaper VOIP provider we looked around to find some of the better devices out there. Among the options we found were service from Vonage (still has monthly bill), Magic Jack Plus, Google Voice and Skype.
After searching around for reviews of the different services I found quite a few favorable reviews of the Ooma phone service using the Ooma Telo device. Ryan from CashMoneyLife mentioned that he had signed up for Ooma and had been happy with it. G.E. Miller at 20somethingfinance.com talked about how he’s been using the Ooma service for years. Both were saving hundreds of dollars by using Ooma. The reason? There are no regular monthly phone bills if you sign up for their basic service. All you pay for is the hardware which you connect to an existing internet connection.
Almost all of the recent reviews that I read of Ooma were very positive. The only negatives I saw were from people having issues with their particular router or modem not working with the Ooma device, or a few people complaining about short outages. With all that in mind we decided to jump in and purchase the Ooma Telo pictured above.
Save Hundreds By Using Ooma
So just how much money can you save by switching from traditional phone service to a device like the ones available from Ooma? Hundreds of dollars if our situation is any indication.
Cost of our old phone service
- Centurylink landline – $43.38/month: We pay $43.38/month after service fees, taxes, or $520.56/year. Included on that phone is voicemail, call waiting and caller ID.
It was actually more expensive than I realized. For quite a while I had thought we were paying somewhere closer to $30. Taxes really bump the price up a notch!
So how much will we save by moving to Ooma – where we’ll have more features available than our old phone line?
Costs of Ooma VOIP phone service
- Ooma Telo device – $139.99: The device itself used to cost $299.99, but it has dropped in the last year or two. As of this writing, the normal everyday price on Amazon is currently $149.99. We got a referral code so it only cost $139.99 for us direct from Ooma.
- Fees, service charges and taxes – $4.53/month: The only monthly fees you’ll ever pay are the fees associated with having 911 service on the device, and then state and local taxes. For our zip code it came out to only $4.53/month or about $54/year. Find out how much you’d pay a month here: Ooma Tax Calculator.
So for us with the initial up front cost of $139.99, plus the monthly taxes and fees of less than $5/month, we’ll have paid for our unit in less than 4 months of service. After that we’ll be saving around $40/month. That adds up quick!
Ooma has a savings calculator on their site that gives you an approximate amount you’ll be saving if you switch to them. It showed that by the end of the first year we will have saved over $288. By the end of the second year we’ll have saved over $756!
How Ooma Works
Setting up the Ooma service sounds pretty simple according to what I’ve read. For most people it takes around 15-20 minutes to setup their new Ooma Telo device.
Since I haven’t received and installed my Ooma yet, I can’t vouch for just how simple it truly is in practice, but it certainly sounds easy.
- Activate your device online using the activation code found on the bottom of your Ooma Telo device.
- Choose a phone number. You can port your old phone number later on if you’d like.
- Enter your contact information, including a second phone number and a physical address for 911 purposes.
- Enter billing information to pay for fees and taxes, or for premier service if you sign up for that.
- Account registration.
After you’ve done all that it’s just a matter of plugging in the device and running an ethernet cable to the device from your modem or router. Once you plug it in it may need to download any necessary updates, but after that you should be set to go. Just plugin your regular old phone and go to town!
Read my post talking about setting up Ooma here. It really is easy!
So what are some of the features that you get with an Ooma account and the Telo device? With the basic free service, you can get all that you’d expect from your regular landline service, and more.
Basic Ooma Service Features
- Free U.S. calling.
- Voicemail that you can access from any phone or web browser.
- Caller ID and call waiting.
- Great HD call clarity.
- 911 service (despite it not being a landline) and 911 email and text alerts when someone calls for emergency help.
- Porting of your landline phone number.
- Online account where you can check call logs, listen to voicemail and set preferences.
- Low cost international calls. (I would probably just use Skype if I had to do this)
So we’ll be getting everything we had with the old service on the basic plan with Ooma, and more like the online voicemail. With the premier service with Ooma, which costs $9.99/month, you get a whole lot of other features included with your account.
Premier Ooma Service Features
- Three way conferencing.
- Do not disturb setting so calls roll into voicemail without the phone ringing.
- Community blacklist access to block known telemarketers and solicitors.
- Personal blacklist to block calls from numbers you don’t want to talk to.
- Call forwarding so you can even forward your calls to your cell phone or another phone.
- Ooma mobile app access to make wi-fi calls on the go with the Iphone app.
- Voicemail to email forwarding so that you can listen to your messages in your email.
- Instant second line so that you can make a second call without missing a beat.
- Backup number to forward calls to in case your phone goes down.
- Call screening to listen to a message and pickup if you decide you want to talk to the person.
- Anonymous call blocking.
- Multi-ring so that your phone system rings your cell phone and home phone simultaneously.
Having A Smooth Transition – Keeping Your Old Phone Number
One thing I love about Ooma is that we’re able to port our old home phone number to the new Ooma Telo device. All you have to do once you setup your system is request that they port the number over from the old phone company. There is a $39.99 charge if you decide to do this, although it’s free if you opt for a year of the paid $10/month premium service. It can take 3-4 weeks or more depending on how quick your old provider moves making the change.
To check if your phone number can be ported to Ooma, go here.
Once you’ve got an Ooma home phone system your phone number can then be portable wherever you go. If you move, like we plan on doing in the next year, you just take your Ooma with you and plug it in at the new house and you’re all set to go. No turning service on and off. You can also take it with you on vacation, or on a long trip. Anywhere you can plug it into an internet connection you should be able to make calls. Just make sure to change your 911 service address on your online account if you do move.
Where Can You Get The Best Deal On Ooma?
So where can you find the best deal on Ooma? For me the best deal that I found on the Ooma right now was by buying it direct from the company using a referral code for $139.99. Amazon.com has the unit available everyday for a price of $149.99. Costco also sells the unit and members can sometimes find specials on the Ooma system. Some people have reported getting it for as little as $99.99. (UPDATE: Ooma is now selling a refurb Telo unit for $99.99)
The key is to do your homework when buying the device, find out what specials and promotions are currently available, and find the best possible deal!
Are you already using Ooma at your house? Tell us what your experience has been in the comments!
Last Edited: 24th February 2014