Our Experience with Skype

A few days ago, I made an offhand reference to using Skype to nearly eliminate the cost of a land line phone at home. A surprisingly large number of readers were curious about this and wrote in with interesting questions of all kinds, so I thought I’d walk through what Skype is, how we use it, and why it might work for you in some situations but not in others.

Everything You Need to Know About Skype


What is Skype?

Skype is a service that allows you to use your computer and high-speed internet connection at home to place telephone calls anywhere in the world for a very cheap price. The plan we’re testing, for example, allows us to make unlimited calls within the United States and Canada (both land line and mobile phones) and an hour’s worth of international calls each month for $2.95, plus unlimited free calls to anyone with a Skype account and their computer turned on. If you want to buy an entire year’s worth, you can get a year’s worth of unlimited free long distance in the United States and Canada for $14.95.

It’s not a scam, it’s completely legit. Skype just uses the internet instead of the telephone system to send phone calls.

Are there any drawbacks?

There are several, and their severity depends on your situation. For us, they’re pretty minor.

1. This service only allows you to make calls out

For calls in, you have to pay for an additional service, called SkypeIn, that gives you a phone number. Calls to that phone number will pop up on your computer like an instant messenger window – you just click answer and you’re good to go.

2. You need a microphone of some sort to hear your speaking.

I originally used an old Bluetooth headset (headphones with a voice mic that connected easily to my computer), then later I started using a webcam for this purpose. The point is you need some sort of microphone to pick up what you’re speaking and speakers or headphones to play it back to you. Yes, this would mean you’d sit at your computer and carry on a conversation near it without an actual telephone. If you want to actually use a telephone-like device, they make those as well, but there’s an additional cost. We have one and it works well throughout our house – it pretty much functions like a normal telephone.

3. The voice quality is almost always great, but sometimes breaks up

It depends entirely on the quality of your internet connection. I have never had a call break up at all, but others with low-speed connections or poor internet providers.

Can I use it to replace my home phone?

1. You would need a high-quality internet connection

If you can’t just get internet without phone in your area, then Skype won’t really benefit you unless you’re making a lot of long distance calls and would just use this to save on long distance. If you can get internet without phone, that’s an even bigger bonus for using Skype – you save money automatically each month. Your internet connection must be a fairly high quality one, though, or else calls will be choppy. One way to try it out is to download Skype and play with the free service to see if it works for you.

2. You would need a method to speak and receive the voice data from Skype

This means either a microphone or webcam and computer speakers or headphones or a wireless Skype phone (like this one). Hopefully, you already have at least one of these options.

3. You actually need the Skype program and an account

There – it’s a lot like instant messenger, so if you can use your instant messenger program, Skype’s not hard to figure out. It’s auto-detected every device I’ve tried to use with it without skipping a beat – I just ran Skype and it identified the items.

4. Unless you have a very expensive Skype-only telephone, Skype requires your computer to be on and connected to the internet

That means there is an energy cost. You can mitigate this by using some clever tactics to reduce home computer energy use, but if your computer’s not on, you can’t receive or make calls. That’s a varying-level drawback depending on your lifestyle.

If all of these requirements fit you, Skype can save you quite a bit of money

Even just on long distance charges or minutes on your cell phone. If you’re around the house and have a strong internet connection, it’s essentially unlimited long distance to the United States and Canada for $14.95 a year – that’s a great bargain.

Are you using it?

Yes, indeed. My wife and I have started using it a lot at home. I’m sold and am ready to drop our land line to use only Skype, but my wife isn’t quite there yet, mostly because it seems like such a strange concept and she wants a longer test period – plus, she’s not used it nearly as much as I have. My calculation is that this drop will save us about $45 a month when we actually go forward with it, which I believe is just a matter of time until my wife is comfortable enough with it (I’m letting her make the call entirely herself, based on her own judgement – she knows I’m ready to switch, so we’ll switch when she’s ready).

Skype is an option well worth considering, especially if you’re a heavy phone user. Each situation is different, but if you have the things necessary (most importantly, a high speed connection at home), you can eliminate a land line and/or save a lot of minutes on your cell phone package by using Skype.

Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.