Of the three components of spending FITness - food, insurance and telecommunications - the last one takes the most diligence.
Paying attention to spending in these three areas can yield relatively painless spending cuts. But phone services are different from food and insurance, where product offerings are basically the same year to year. Options for phone services - landline, wireless and Internet-based - change rapidly. That will only accelerate as cable and phone companies duke it out for greater portions of the overall telecom bill, including subscription television and Internet access.
"Over the next year, we'll see more aggressive pricing and packaging in different markets as cable versus telecom competition continues to intensify," said Charles White of market-research firm TNS Telecoms.
The overarching problem with telecom services is consumers waste money by overbuying services, opting for bundles that include unlimited long-distance service and buckets of wireless minutes that go unused every month.
"People who obsess over the price for a gallon of milk don't think twice about overpaying for telecom," said John Breyault, spokesman for the Telecommunications Research and Action Center. "Over a year, you could be overspending by hundreds of dollars."
That's because Americans are spending more on their telecom services than ever, according to TNS Telecoms. Households that pay for wireless phone service are spending on average about $81 a month. Meanwhile, local phone service averages about $38, and long-distance service is about $13.
That's nearly $1,600 in phone expenses a year for households that use all three services, enough expense to warrant attention. Here is a sampling of trends that could influence your telecom spending: (Next week, we'll look at more techie solutions to cutting your bills.)
Bundles. Bundling of services is all the rage among phone and cable companies. But home-phone bundles, which often include unlimited long-distance service, may well cost you more than if you bought services from different providers. While paying one bill is more convenient, it's worth comparing prices to determine if you're paying for that simplicity.
For example, if you pay $13 a month for unlimited interstate long-distance service and only make an hour's worth of long-distance calls, you're paying about 22 cents per minute.
Meanwhile, the best rates for long-distance service are less than a nickel a minute, including fees, for one hour of talking. So the unlimited plan is quadruple the price, or costing you more than $10 extra each month in this example. The $13 bundle doesn't beat the best alternative long-distance plans unless you make about eight hours or more of long-distance calls a month.
"The biggest value you're going to get from bundling all these different products together is the convenience of one bill. And for the high-volume user, it might make sense," Breyault said. "But for everybody else, bundling is not a money saver. It's usually a better idea to shop around and buy plans that most closely match your calling patterns."
Web sites that offer cost comparisons on local, long-distance and wireless services include TRAC.org, MyRatePlan.com, WhiteFence.com, SaveOnPhone.com and PhoneRateFinder.com.
VoIP progress. Voice over Internet protocol sounds technical but it is becoming a mainstream way to use your high-speed Internet service as your phone line. You can use a normal telephone and keep your same phone number. VoIP kits can be found at many big-name electronics stores. Such companies as Vonage, Packet8 and traditional phone carriers offer unlimited local and long-distance packages for $20 to $25 per month, with fewer fees and taxes compared with traditional landline packages that cost $40 or more per month. But the price break of VoIP comes at a potential cost in call quality. VoIP audio quality is likely to be good, lacking echoes or delays, four out of five times you use it. But its quality is only as good as your broadband connection. So it's a good choice if most of your phone calls are not mission-critical.
And, realize your phone service won't work during electric or Internet outages. It's good to have a wireless phone too, perhaps with a car charger or backup battery. If you already have broadband Internet access and a wireless phone, VoIP is worth considering, especially if it saves $20 a month, plus fees.
Prepaid wireless. Some people think they're stuck signing a cell phone contract. They are not. In fact, pay-as-you-go prepaid wireless plans continue to improve, as providers offer cheaper phones and lower rates. Traditional wireless service remains cheaper per minute, but that assumes you use all the minutes. Traditional wireless rapidly becomes more expensive if you have dozens or even hundreds of unused minutes every month.
Another advantage is that pre-bought minutes already include the fees, surcharges and taxes that show up as separate line items on your wireless bill and add 20 percent to 30 percent to the bottom line.
For lighter users of mobile phones - less than 200 minutes per month - prepaid service may well be the less expensive choice. Check out the company TracFone, and such carriers as T-Mobile and Verizon.
"It's a matter of calibrating," Breyault said of spending smarter on your telecom services. "What are you actually using and how do you get a plan to match that? To be honest, a lot of people don't want to take the time to do that."
Gregory Karp writes for The Morning Call in Allentown, Pa.