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Home » Budgeting, Lifestyle Finance

How to Use Ooma and Net10 to Cut your Phone Bills in Half

Last updated by on 38 Comments

I get excited about re-occurring monthly savings, so today was a good day. I had been paying about $60/month for 2 lines with a monthly Verizon family cell plan, but rarely ever used the 550 minutes given to me. My wife and I generally use about 300 minutes per month. Today, I came up with a plan that will cut that in half AND offer me more functionality.

I haven’t had a land line in two years, and really never wanted to go down that path ever again. Additionally, monthly service VOIP (such as Vonage) never has really appealed to me because I couldn’t foresee using it enough to justify the $25/month charges. So here’s my two-part plan to cut my monthly bills from $60 to $30 and actually get more service.

Part 1: Switch to a New Pay-by-the Minute Prepaid Cell Plan

I’ve decided to transfer my Verizon numbers to Net10. Net10 is a Tracfone brand. And Tracfone is an MVNO (runs off of other big networks like Verizon, AT&T, and Sprint). Basically you pay 10 cents per minute with no daily airtime fees if you use your phone. It’s just 10 cents per minute for all domestic calls (text messages are 5 cents each to send and receive). I’ve heard coverage with Tracphones are pretty good. The clincher for me was that there are no daily air-time usage fees. A lot of the other prepaid cell plans charge you $0.99 or more for each day you actually use the phone in addition to the per minute charges. With these plans, if you end up using the phone daily, you’re typically paying more than you would be with a standard monthly service plan.

I’m now using a Net10 LG900G. It costs $29.99, and comes with the 300 minutes (you are basically getting the phone for free).

Part 2: Buying an Ooma

OomaOoma is a VOIP system that charges a flat up-front price for the equipment, and then you are never charged again. There are zero monthly service charges. All you need is high speed internet to hook it into, and then it can be used with a regular landline phone. The cheapest available today is the Ooma Telo for $128 on Amazon. What’s great is you get your own phone number and you don’t have to be online to receive calls on your phone.

How Ooma & Net10 Combined will Cut my Bills in Half

I will never use more than 300 cell minutes per month between the two phones, which means I shouldn’t go over $30 ($15 per person) per month on the Net10 plan. With the Ooma being $200, I will break even within 7 months with Ooma and the two phones on Net10 (vs. my previous cell plan). After that, Ooma is basically free, and my only phone expenses are the $30 per month for my minutes with Net10. I will have effectively just cut my phone bills in half!

Additionally, I will be Able to now Enjoy the Following 6 Benefits

  1. No more cell phone contracts, so if Net10 isn’t any good, I can easily go elsewhere without a significant expense.
  2. No more accidental overage charges, or having to worry about my minutes (Net10 shows you the minutes and service period left on your cell phone screen).
  3. I’ll have a VOIP and won’t have to worry about my minutes. The Ooma has been said to have better clarity than landlines (and definitely better than a cell phone). The reviews on Amazon look pretty good.
  4. You can’t transfer numbers with landlines, your Ooma number moves with you.
  5. I will now be able to use a home fax line again, if I need to.
  6. With the Ooma, if I need a second line, I can get one for fairly cheap ($13/month, I believe).

I’ll report back with reviews on each of the services shortly.

Save Money on Phone Bills Discussion:

  • What clever ways have you been able to cut your phone bills?
  • Have you tried Ooma or Net10? What are your thoughts?
  • Are there any other phone services out there you couldn’t live without?

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I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


38 Comments »
  • Rico says:

    Sweet plan. Yeah, I’ve always been scared off by the daily usage fees on pre-paid plans. Makes them seem like a rip off and really constraining. Haven’t heard of Ooma yet, so really excited to hear how it turns out for you.

  • Andrew says:

    “Monthly service VOIP such as Skype”? Skype does have a monthly service, but they are best known for their a la cart 2 cents a minute voice service. And their monthly plan is something like $3/month. Not sure why you think it’s $25/month.

    At $200 for the Ooma, that’s almost 100,000 minutes you’d have to use on Skype to break even (not counting lost interest). At 300 minutes/month, that’s more than 25 years.

  • Andrew says:

    Sorry, I meant “a la carte.” *

  • G.E. Miller says:

    My bad – insert Vonage for Skype. Skype is a real possibility that’s worth mentioning – but what was attractive with the Ooma is you get your own number, can receive calls, and don’t have to be on your computer. I don’t know enough about Skype to know how its features compare. Can you give a rundown, Andrew?

  • Andrew says:

    Skype–have to be on your computer unless you buy a Skype phone, not sure how much those cost but not $200. Can get unlimited outgoing calls to the U.S. & Canada for $3/mo and get your own number and receive calls for $30/yr. Call quality is probably not as good as Vonage or Ooma but it’s highly dependent on how good your internet is. The good thing is you can test it out for free, since all calling to toll free numbers is free on Skype (don’t even have to pay the two cents a minute).

  • Bill says:

    Just a note, in my experience faxing documents over a VoIP line very rarely works well. I’ve never tried Ooma, but anything over 2 pages is pretty much guaranteed to fail and 1-2 pages are still lucky to transmit successfully.

    • Pete G says:

      I’ve had Ooma almost two years now. I have absolutely zero complaints.
      The firmware is based on embeded Linux and Asterix. Asterix is a PBX package runs in only Linux “I believe.”
      It is a PBX on steriods and I have used it on a PC as a a PBX system for a small office. I also have had the experience of installing and managing a large PBX by the top dogs in that business, “Northern Telecom.”
      It is a dog to administrate. Software from the stone ages.
      Since installing Ooma at my home small office business I have had nothing but good experiences. Abount eight or ten months ago they upgraded their software so you do not have to dial *99 prior to sending a fax. Sence then I have had excellent results with it.
      Dialing *99 isn’t/wasn’t big deal being human beings are very adverse to change “myself included” removing that little step is a welcome step.
      NOTE:
      If you are using it in a switch for several computers and or servers do not, I repeat “DO NOT” run your high speed to the switch or router then just plug the Ooman into it.
      Run the high speed, “in my case DSL” to the Ooma Internet input.
      Then run the network from the Ooma to the “switch/router” input.
      Connect every thing else to the “switch/router” and DO NOT FORGET THIS STEP! LOG INTO THE Ooma MANAGEMENT SYSTEM AND CONFIGURE IT TO HANDLE THE “QOS/QUALITY OF SERVICE.” In other words all data must be controled by Ooma. It will reserve the bandwidth it needs or what ever you configure it to for the best performance and leave the rest to the other machines.
      I run a mail server with a moderate to low traffic and three desktops as well as three laptops. My max traffic is the three of any combinations of desktop or laptops.
      Never a problem.
      Yes when I got my Ooma I was in a hurry and just plugged it into the switch. IT SUCKED!

      Don’t waste your time doing that.
      If you have a server like email then you need it to be seen as a fixed ip so a little more configuration is necessary.
      Configure you highspeed to direct the necessary ports to an address on the Ooma.I send it to 192.168.1.XXX then configure the Ooma to route to the email server. Mine is 10.10.10.XXX.
      I did this and never looked back for over a year now.
      I have downloaded a whold DVD of over 3Gb while Ooma in use and I get about 5+Gb download speed from my 6Gb dsl. Yes I know it’s a bit slow compared to you guys who live in the big city where everywhere is Fiber etc. It’s a damnd merical I get DSL here at all.
      I live about 1000 ft from the absolute end of the fiber so I get it from there on copper.
      Had a good deal of problems with AT&T for about a year until they finally got the idea I can do networking and usually can beat the field guy up technology wise.
      I had to install it in the first place as they can only deal with it with a Micro$not setup disk. Trying to configure the device without it leaves them totally in the dark.
      I’ll have to stand on my soap box for a minute.
      Yelling at the top of my lungs here. AT&T YOU SUCK!
      YOUR CUSTOMER SERVICE IS SIMILAR TO WHAT I USED TO HAVE A PRIZE BULL DO FOR MY NEIGHBORS COWS AND THAT WAS CALLED SERVICING THE COW. I FEEL AS IF I’VE BEEN SERVICED EVERYTIMG I’M FORCED TO TALK TO YOUR SO CALLED CUSTOMER SERVICE.
      GOOD OLE U.S.A. CORPORATE AMERICA SELLING OUT. I’M TIRED OF TALKING TO SOMEONE IN MANILA PHILIPPINES WHEN I NEED HELP. NINEY PERCENT OF THE TIME THEY CAN DO NOTHING TO HELP. AFTER I ASK MY QUESTON THEY DO NOT ANSWER, THEY JUST START ASKING ME TO DO MICRO$NOT TESTS ON MY PC. SORRY GUYS I CALLED ABOUT THE DSL NOT MY PC CERTIANLY NOT Micro$not. Micro$not is not allowed here. Never has been and never will be.
      One last note: If you insist on plugging your Ooma into a switch/router or whatever in paralles with your other machines in your network don’t call Ooma. Let them help people who have their system setup correctly.
      The very first step is to wire it correctly. One cable into Ooma and one out. It’s that simple. If you can’t follow that simple instruction then don’t bitch if your not satisfied with the operaton! I promise you will not be!

    • Pete G says:

      Bill I’ve had no problem with faxing for two years with my Ooma.

  • Casey says:

    I call 1-800-FREE411 (1-800-373-3411) instead of 411. Last month alone I saved $20 off my bill just by doing this switch. I never thought I called 411 that often but I guess I did. They have business, governemnt, and residential listings and they also have daily horoscopes and weather. It is really easy to use. You listen to 2 short ads while they get your number, but sometimes those ads have special promotions!

  • Andrew says:

    Or call 1-800-GOOG-411 (Google 411) which is also free, and you don’t even have to listen to an ad while they get your number.

  • David says:

    I’ve been using Ooma for 2 months now and highly recommend it. Many people have phone, cable, and internet bundles now, so the service may not save them money, but us it worked perfectly.

  • Russel says:

    I don’t know anything about Ooma but it sounds good. I do have a Net10 phone which is really great, I’m now saving money every month just by having it and making the same number of calls. I recommend Net10 prepaid but my wife has a Tracfone which is also good so either one.

  • Bill says:

    I have ooma and use it with my cell phone also. However, I have Page Plus Cellular, which is an MVNO using the Verizon Wireless network. You can port your number for free and they include 100 minutes. You can also activate your existing Verizon phone. The benefits is of course the widespread and reliable Verizon network and minutes last 120 days and rollover when you add another pin/card. Minutes are less than .06 (6 cpm) when you get an $80 card. Also, you can have a cell phone for as low as $2.50 / month by adding a $10 card every 4 months.

  • G.E. Miller says:

    @ Bill – good plug. I checked out their site. There is no daily airtime fees? Looks a bit cheaper than Net10, but with more add on fees (their phones are more expensive, it’s $10 if you change phones, etc.). But I do like that you get 4 months of added service by just buying a $10 card. I’m paying for the service dates and not even utilizing my full allotment of minutes with Net10.

  • Ashton says:

    I have a Net-10 phone. I’m a big fan of prepaid plans especially since I’ve been paying for unused minutes under traditional plans for years. I’m also a fan of TracFone but made the switch to Net 10 b/c it has more gadgets to play with. The current phone I have came equipped with blue tooth, 1.3 megapixels camera, MP3 player and FM radio and still was very affordable!!

  • Dr.D says:

    TracFone is cheaper cell provider if you don’t use a lot of minutes. I dont even use 400 minutes a year so buying a one year card for $99 or less + $20-40 for the phone and I’m done. I usually replace the phone every 3 years so I pay around $9 a month for a cell phone.

    For personal use, I have no idea why people need to use a cell phone as much as they do. If you need to talk for a long time then you should be on a land line/VoIP phone where the rates are cheaper or unlimited. It really boils down to “need” vs “want”. Of course, if you want to pay $30-70 a month for a cell plan then “want” all you can. But I’d much rather have $720 more per year to enjoy life vs spending it talking on a cell phone.

    As for ooma vs Skype. While skype is “cheaper” in the short term, it’s also not easy for computer noobs to understand. Also, after about 3 years of usage, ooma wins over Skype. This is assuming the Skype subscription plan + in number calling (about $65yr). Ooma’s model is to have people replace the hardware every 5 years with offering new hardware every 2-2.5yrs. You don’t have to upgrade to continue to get free service. This is probably why the ooma hardware device has buttons and remote units. They want you to wear it out, drop it, or have it get dirty enough that you’ll want to replace it. Why else do you think it’s white? Either way, for those that don’t always have the latest and greatest stuff the original ooma hardware will be all they will ever need. The only problem comes if the company fails and you’re stuck with a worthless device. But if you have Vonage or other like VoIP products then so long as ooma is in biz for 1yr then you’re okay to at least break even.

    So bottom line, if you’re on a budget or “smart” about your money….go TracFone for cell and limit use and get ooma…but if budget is tight on spending $200-225 at one time then go with skype (you still need to buy a ATA device which is around $50). With the money saved, put it towards a ooma device so you can stop paying monthly phone fees for VoIP. Just be sure to lock away the ooma device and use your phone to access your voicemail and other features. That way your ooma hardware will have a long life and save you even more money before you have to replace it with the latest ooma model.

  • Robert says:

    Ive found that being on Net10 prepaid is much cheaper than a contract.
    The conection works similarly in that it needs airtime to be connected. Its easy enough to top up and still cheaper.
    The low fees of 10cents a min and 5cents a text are consistent and very impressive.
    It realy is a bonus that there are no hiden charges or daily fees.
    This way with Net10 I know what im getting and exactly what im paying for.

  • Yes! says:

    I have the ooma and currently enjoying the no monthly payments. this is the real deal people.

    btw look up Ron Paul everyone!

  • Don says:

    If I have OOMA will my incoming calls be long distance to the caller??

    • G.E. Miller says:

      @ Don – Incoming calls are charged as per the incoming callers plan. Your Ooma has no impact on them.
      @ Dennis – If you got Ooma you could discontinue your phone service and run Ooma off of your DSL line. Normal DSL charges would apply, but your Ooma would run off of DSL and you would not need to pay for a phone line.

  • B says:

    I have been using Ooma for a few months now and couldn’t ask for anything better. What I have now discovered, for my family that lives out of town, is “Google Voice” I have now set up a local number that is in my families calling area through GV and forward that number to my Ooma number. Now my family can CALL ME anytime for FREE!! Google Voice is FREE by invitation only which can take a few months to get your invo, but… I have found that you can buy an invitation on E-Bay for around $2.00

    • Pete G says:

      Isn’t buying an invatation sort of sleezy?
      I think so. Sort of reminds me of how the air starts to stink when a Democrat walks in the room.
      Before you get all PO’d it ain’t much better when a Republican walks in.
      There are very few if any real Republicans. That’s where the term “RINO” Republican by name only came from.
      You see this country is supposed to be a Constutional Republic but we are and have for some time been acting like a Democracy.
      Democracies are always doomed to fail into a very worse forem in time.
      Usually when about 35% of the population is paid by the government the snoball effect goes into effect and the Democracy becomes some form of ISM or worse. Usually some form of Dictatorship.
      We are at about 60% so we have beaten the odds so far but it looks like the hammer is about to fall. I predict that Obama Bin Lyin will find the new problems in the world so horrindus that an election would be a bad thing. So by executive order he suspends November elections until……………………..
      Hello Obama Bin Lyind King of USA King of world wanna be.

  • JT says:

    Thank you so much for this information. I got ooma after reading about it and a sale on slickdeals.net. I googled ooma to learn more about it and stumbled upon this website. Goodbye phone service, goodbye Verizon’s $100 monthly bills for me and my wife! Cancelling my phone service didn’t save me too much money since they will just increase the cost of my internet due to me having no phone service. However, using net10 instead of Verizon will save me a bundle, because instead of using Verizon to call family on the weekends, I will use OOMA. Thus, I will rarely use my cell phone for anything!!! Thank you again!

  • Janey says:

    If you just want talk and text, Net10 is great! All calls are 10 cents/minute and all texts are 5 cents (send/receive). The $30 (300 min) card and free Nokia phone work fine if you don’t need mp3/web/IM/etc.

    Pricing is some of the lowest I’ve seen and you can buy recharge cards at multiple locations. Some places (like Family Dollar/Dollar General) even sell $15 (150 min) recharge cards.

    I was happy with the cost and signal quality of Net 10; great if you just want talk and text (I’ve never tried any of their higher grade phones).

    Great signal. Verizon-like network at a fraction of the price. Customer service is sub-par. That being said, it’s worked for me and I will continue with them until it doesn’t.
    After switching to ATT Go Phone, I wish I would’ve stayed with Net 10 to save!!!

  • ross says:

    T-Mobile pre paid plan is 10 cents a minute, too. No daily fees, no overcharges, USA wide.

    Many people do not know that. I’ve used it for 4 years now. Refill via the phone, no visit to any store.

    You do have to buy minutes $100 at a time, but they don’t expire, so big deal.

    I got an unlocked 3-band GSM phone at mobilecity.com for $99, and I use it with the above plan, AND when I travel I pop out the SIM card and pop in a local SIM card in almost any country for cheap, and then I have a “local” phone number there.

    straighttalk.com looks good, however it seems you can’t use an unlocked phone, so that’s not good.

  • WinOrGoHOME says:

    It’s ALL ABOUT HOW YOU MANAGE YOUR MINUTES! Flexibility with prepaid phones will soon be replacing ridiculous contract cellphone plans. With my prepaid (Net10), I just buy a $20 card, which gives me 200 minutes, and when I need it, I just buy another one. RARELY do I go over 200 minutes in a month. I mean, there aren’t iphones or blackberrys (yet), but there are a few pretty cool phones. There is a samsung with a big screen and a full keypad (like a keyboard keypad) and there is a motorola phone that also has a built in music player. Right now the economy is not doing too hot, so why spend money on minutes and plans we don’t NEED. Just my 2cents…

  • Kimberly says:

    Another big fan of Net10 right here! Prepaid is totally the way to go if you want savings and flexibilty. I recently joined up with Net10 and the savings are huge – no more contract fees or hidden charges for me. They have a variety of plans and minutes so if you are a moderate or big talker, you can still save – I’m keeping more than $70 in my pocket thanks to Net10. I haven’t found a company that can beat their .10 a mintue and .03 a text slogan. Not to mention that I can go to Walmart or Target to pick up both a new phone or minutes and I can re-charge right from the phone itself. I might miss my more fancy phones I used to have, but I don’t miss contracts and fees so I’m sticking with Net10.

  • cameron norman says:

    have used net10 for about a year now when my small business started taking off, and i needed to provide my staff with phones, Net10 was the best option as i could give a allowance of minutes and they can buy their own over and above that, phones where well priced and reliable. Service is great and as i have about 15 phones subscribed i am saving over a grand a month compared to the contracts when there was far less staff. Net10 is great and very versatile.

  • Nancy says:

    I’ve been a Net10 customer for about 6 months now and I’m very happy with the phone (LG300), the service and especially the price. Paying $15 a month is awesome…plus the minutes roll over :)

  • tracy says:

    I have a Net10 and have cut my costs considerably as I only need to pay for what I use. I am in charge of my own account through the prepaid system and dont have to worry about any bills at the end of the month

  • stephan says:

    I have net10 been using it for over a year. I recently upgraded to the new net10 QWERTY Keyboard phone. the cost for text msg is only 3 cents per text. And I saved big on my new phone by getting a refurbished Samsung T401G with a free 750 min calling card for only $24. This normally costs $80. I found online coupons for $8 off and to top it, there was a free travel kit coupon. The total purchase with free shipping was $17. The phone looks and works like new. Now I’m pay 3 cent a text, not a bad deal from net10. I also us OOMA, cut my monthly cost in half. Was paying $84 for a land line and internet. With OOMA I dropped the phone co. and my bill is only 45 for DSL. My only problems was when I was at 1.5 mbps dsl, the phone quality and internet speed was poor. By upgrading to 7mbps I have great phone quality and I can surf/watch netflex with no problems.

  • M Brown says:

    Great review! I was on a plan with limited minutes and my average bill was just under $100 (I was guilty of going over my limit some months, resulting in hefty overages). I switched to Net10 and was saving a considerable amount of money, though did have a slight cut in minutes (however this was worth it due to the savings and lack of overages and other fees). I’ve recently upgraded to Net10′s unlimited plan, and at $50 for unlimited talk, text, web and 411, am still saving nearly $50/month! I don’t really have need for a landline with an unlimited plan. Prepaid has really paid off and the savings make the limited phone choice far less significant.

  • Dr.D says:

    Just remember, with Ooma there is no “plan”. You buy the hardware, plug it into your high speed internet and you’re good to go – no monthly fees. The newer hardware you have to pay the yearly gov. FCC fees which are about $12-13 bucks per year. Owners of the older hardware don’t have to make payments for those gov. FCC fees.

    Unless you run a business or travel a lot, I don’t see the need for a lot of minutes on a cell phone. Especially if you have unlimited free minutes at home with no monthly fees. Everyone has unique needs but most of those “needs” are really just bad habits that have been established. Just imagine what people did before cell phones were widely used. The only real feature that cell phones offer over landline is being able to use it remotely. Yet we usually have access to landlines at work and home, which is where we spend the majority of our life (18+ hours a day during the week).

    To put it into perspective, if you went with a yearly prepaid you would save $41 a month. If you auto-invested that $41 every month over 40 years with a interest rate of 7.5% (which should be easy to do over such a long period of time) then you would have saved $123,977 ($19,680 savings and $104,297 in interest). That comes to $3,099 per year or $258 a month! Is it worth $123,977 to be able to have the privilege of owning a cell phone just so you can have unlimited minutes? Is it worth $123,977 to find a way to use less minutes on your cell phone? Yet here in the US, the majority of the population don’t even have $100,000 when they retire.

    So the “real” cost of a cell phone is much higher than the “monthly” bill on pays. Sadly, most would just spend the savings on something else. That’s why I mentioned “auto-investing” since it takes away ones ability to use that freed up cash for something else they don’t need.

    Anyway, it’s something to think about. Maybe you do “need” a unlimited cell phone plan for your business or personal life. Just realize the “true” cost of that plan.

  • Jacob says:

    My kids and I needed to cut down on some goods for a bit and in that time, I gave hard thought toward switching my cellphone provider. I had to pay 100 bucks a month with my old company, till a friend recommended Walmart as a good place to find prepaid phones. I went, and after some research, I got my very own Net10 phone, which only cost 50 bucks a month, and saved me a ton of money.

  • Timothy says:

    My mom and dad were getting sick of paying over 100 bucks a month for my cellphone, and I didn’t exactly feel so great about making them pay so much either. So, I went out and did some shopping, and came back with a Net10 phone. Now, instead of 100, they pay 50 bucks a month, and I still get my unlimited talking, web, and texting.

  • SAbe says:

    Currently living with my parents and trying to save them money. I don’t think they will want Ooma unless you can transfer your old phone number to it like porting cell #’s…

    I personally switched to Virgin Mobile. 300 minutes, unlimited texts, unlimited internet and only $35. My co-workers are paying upwards of $100 for their own internet enabled phones, so I thought I was saving tons. Also no contract, so I could switch to Net10 if I wanted – anyone know how much they charge for data?

  • Brittany Hall says:

    Can i see my calls and txt msg on my net10 service online

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