Home phone plans seem old-fashioned these days. Plenty of folks rely on their cell phone for everything. And there’s some merit to that. If you’re one of those people that feel it’s blasphemous to have anything less than an unlimited talk, text, data, and whatever-new-gadget-Apple-can-come-up-with plan, why spend more money on a home phone when you already have a phone by your side at all times?

However, if you are anything less than a hard-core cell phone junkie, super cheap home phone plans can still serve a very valuable service. My wife and I have a cell phone as well as a home phone and spend less than $10/month on the two phones…combined. In fact, my total phone expense for 2012 was only $82! We save the cell phone for emergencies as well as quick calls when one of us is away from home. No long, philosophical debates or sappy, romantic poems allowed on our cell phone! Functional phone calls and necessary questions only. The home phone is used for everything else. It is our main source of communication with the outside world because there isn’t a cap on how long we can chit-chat.

Remember, even the cheapest unlimited cell phone plans cost AT LEAST $30/month. However, the cheapest “unlimited” home phone plans cost somewhere between $0/month and $15/month. That’s substantial savings! That’s why I canceled my normal cell phone plan a few years ago and started using a bare-bones emergency cell phone along with a cheap home phone like the ones detailed below.

Important Note: All 4 home phone plans detailed in this article rely on VOIP (Voice Over Internet Protocol) for their connection, meaning you’ll need high-speed internet at home for them to be effective. Don’t consider VOIP if you’re still wrestling with dial-up. A decent DSL or cable connection should be enough, but if you’re not sure, most VOIP companies offer a short trial period where you can see for yourself and make sure it works in your home.
The Pros and Cons of VOIP Phones

Let’s first look at VOIP in general before we take a closer look at the individual options. Again, VOIP is just a phone service that relies on a signal from your high-speed internet connection. The vast majority of the devices these days are quite simple to set up. They provide a device that gets connected to your router with one cable and the base of your phone with another. Your computer doesn’t have to be on for the phone to work – the internet connection just has to be available. So, if you lose your internet connection, your phone signal is also gone. That’s where a good emergency cell phone comes in handy.

Pros:

Super Duper Cheap!

Usually simple to set up

Can often use the home phone you already have

Cons:

Clarity of calls isn’t as good as a landline (somewhere between a cell phone and landline)

Possibility of dropped calls or glitches – similar to cell phone service
4 Super Duper Cheap Home Phone Plans
1. Magic Jack Plus

This is the one that Trisha and I have. We signed up a few years ago when the “plus” version first appeared. I had tried the original Magic Jack before that, but it was incredibly annoying to have to keep your computer on constantly (the phone plugged directly into your computer). So, once the Magic Jack Plus came along and it allowed you to simply plug into a wall outlet instead, I gave it a try and we’ve stuck with it ever since.

Cost:

$70 for the first year and $30/year after that (about $2.50/month after the 1st year)

$20 initial charge to keep your old number as well as an additional $10/year

Pros:

Super duper cheap

911 Service

The ability to keep your phone number (for a charge)

Cons:

Poor reviews on Amazon

No over-the-phone customer service available (only online chat)

Bottom Line:

This is the only device on the list that I have personally tried. It has worked fine for us, but the reviews are split right down the middle. Half of the people sing their praises and half absolutely hate Magic Jack and act as though Osama Bin Laden invented it.

So, you won’t be getting any “take it to the bank” guarantees from me. We have experienced occasional static or dropped calls, but it hasn’t been any worse than a decent cell phone reception. In my mind, it’s been well worth it though. We spend $40/year (we kept Trisha’s old cell phone number), which is less than some people spend per month. That’s a big deal.
2. Net Duo

Net Duo appears to be very similar to Magic Jack Plus. However, there are a few key upgrades.

Cost:

$50 for the first year and $30/year after that (about $2.50/month after the 1st year)

$20 initial charge to keep your old number, but no ongoing annual charges

Pros:

Super duper cheap

911 Service

The ability to keep your phone number (for a charge)

Live phone support

Has the capability for video calling

Cons:

Have Magic Jack-like reviews on Amazon (that’s not good)

Bottom Line:

Net Duo appears superior to Magic Jack Plus in a couple small ways, but the reviews are similar…some are great and some are horrible.
3. Ooma

The cost structure of Ooma is a little different than the first two companies. Ooma markets itself as a one-time charge and then free phone service for life. Meaning, you pay for the device and then that’s it. That sounds wonderful, but most of the reviews that I’ve read state that they have to charge local and state taxes for the service, so you actually end up paying somewhere between $4-$8/month after all. While that still doesn’t seem like much, the annual fee that I pay to Magic Jack works out to be around $2.50/month and I’ve never paid any taxes. So, it may end up more expensive after all.

However, with that being said, the reviews for Ooma are much better than Magic Jack or Net Duo, so maybe it’s worth it…

Cost:

$140 initial cost and then local and state taxes ($4-$8/month)

$40 initial charge to keep your old number, but no ongoing annual charges

Pros:

Excellent reviews online

Still super cheap

911 Service

The ability to keep your phone number (for a charge)

Live phone support

Cons:

Though still cheap, higher initial cost and (possibly) slightly higher ongoing cost

Bottom Line:

The reviews say that Ooma is superior to Magic Jack or Net Duo. Since I’ve never tried it, I can’t tell you for sure. Their website talks a lot about their “crystal clear” clarity and its superior technology that allows it to use less bandwidth. It’s fairly convincing, but it’s also just a company trying to get you to buy their product, so exaggeration is expected. Either way, if keeping that landline quality voice clarity is most important to you, Ooma may be worth a shot. Like most of the other VOIPs, there’s a 30-day money back guarantee.
4. Obihai Obi100

The Obi device is not tied to a phone service, so you have to register for a VOIP service like Google Voice along with buying the device. That sounds like a disadvantage but, in reality, Google Voice is currently FREE. So, once you buy the Obi100 (only $40!), you’re done. Close your wallet or purse up and forget about it. That’s a big deal.

It’s always possible that Google will decide to charge for their service at some point in the future, but, at least for 2013, it’s free and there’s no evidence that it’ll change anytime soon.

Cost:

$40 initial charge and NOTHING after that (if using the free Google Voice phone service)

Pros:

Excellent reviews on Amazon

The Super Duper Cheapest

Cons:

No 911 Service

Can’t transfer a current home phone number (see below for more on this)

Bottom Line:

The name alone makes me want to buy it. Obihai Obi100 – you can’t beat that. If Magic Jack Plus starts to fail me, this may be the one we try. It’s the cheapest and it has the best reviews. That’s a great combination.

However, there are some small downsides to using Google Voice with the Obi. The fact that 911 service is not available is a little frustrating, and keeping your home phone number is more difficult than with the others. A cell phone number can be transferred, but your home phone cannot. So, basically, you need to transfer your current home phone number to a mobile phone and then transfer it to Google Voice.

Also, the set up may not be quite as simple as some of the other systems since it involves two different companies, but there are plenty of videos and tutorials online to show you how. So, while it may be slightly more “techie” than Magic Jack or Ooma, it’s not brain surgery.

November 2013 UPDATE: According to Obihai’s blog, the device will no longer be compatible with Google Voice as of May 15, 2014. Click the link for more information.
Others To Consider

There are LOTS of VOIP phone services on the market these days. New companies pop up every month and the big companies continue to try to top each other to gain market share, so feel free to search for better options.

Straight Talk is one that gets a lot of attention. It is actually not a VOIP since you don’t need an internet connection to use it. Straight Talk relies on a wireless connection much like a cell phone, so they recommend that you place the unit near a window. You may have to search for the sweet spot. It’s considerably more expensive than most VOIPs at $100 initial cost and $15/month, but if that’s still significantly less than what you pay right now for your landline, it may be worth a shot. Check the reviews and determine whether it’s worthwhile for your situation.

Basic Talk is a new service from Vonage that’s sold at Wal-Mart. The upfront cost for the unit is often waived, but it’s $10/month (plus taxes) after that. It is a normal VOIP like the others we’ve looked at but is more expensive in the long run. There aren’t as many reviews for Basic Talk since it’s the new kid in town.

What service do you use? Do you have any home phone wisdom for the Simple Family Finance readers?