Where I live, basic service is about $25 a month; long distance is extra. That's a guaranteed minimum $300 a year if I don't make any long distance calls. I decided to do something about that -- I got setup with Skype. If you're in the US or Canada, all long-distance is free after a one-time $30 fee (SkypeOut: Skype Unlimited). In addition, to get an incoming number (SkypeIn), I only paid $38 for a year of service, which includes voice mail. You can get your incoming number to have any area code -- so if you have friends or family that have to pay long distance charges to call you, you can get a phone number in their area code. My final expense was an inexpensive Skype phone, $35. So for $103, I have local and long distance for a year. In addition, with just the basic free Skype service, you can talk Skype-to-Skype for no cost.
Many Podcasters, such as Leo Laporte, use this service to record guests on their shows; which is cheaper and yields better quality than if you tried to recorded off a standard phone.
Skype also offers other services such as Skype SMS and SkypeCasts. SkypeCasts are public live conversations -- a good way to meet people with similar interests. For example you can speak to people who like NBC's HEROES.
So if you're looking to reduce your monthly phone expense, I suggest you give Skype a try.