It’s time to get serious about spending less, and saving more. Take a look at your monthly expenses. Hopefully, you have less money going out than coming in, but for now it’s okay if you’re not quite there yet. There is one item in particular that can drain your bank account, $100 at a time, and the funny thing is: you don’t need it.
I’m referring to cable, of course. If you live in America, odds are you have some form of network television being broadcast into your house. 90% of all U.S. households subscribe to either cable or a dish equivalent. This is because of two reasons: 1. We’ve been conditioned to believe that we need it and 2. Bundling cable/internet services makes each individual service cost less.
We currently have Verizon FioS as our Internet Service Provider. Until recently, we were also receiving cable television service through them as well. When we moved into our house in November of 2011, the first thing we did was call Verizon to have these services installed.
$100 a month! Hey, that’s not bad at all, we thought. That included a free DVR, 200+ channels and 25up/25down internet speeds. With all of this great news, and shiny new services, we tuned out the part of the conversation with the Verizon rep when they said “2 year contract” and “introductory price”.
Our bill was steadily around $100 for the first entire year of our cable/internet subscription, so it never really occurred to us that we were wasting money, since internet alone through Verizon would run us about $80/month without the bundle.
But then, our November 2012 bill came in the mail: $134.88. This price increase was attributed to one simple fact, which was that we were no longer “new customers”. The DVR went from free to $14.99/month, and our new customer discount ($15/month) expired.
I called Verizon immediately and pleaded with them to lower our bill, because it was out of the range that I was willing to pay. They told me to call back in January, as this is the month they receive incentives to pass out to customers in need.
Long story short, I called back in January and they still couldn’t do anything to reduce my bill. After a heated conversation I told them I wanted to drop my cable service altogether, all I wanted was internet. They tried to keep us from dropping cable by saying, “Internet alone is $74.99/month, if you keep your cable service it’s only $84.99*/month”.
Why then was I paying almost $135 for an $85 service? I told the guy to screw, and shortly thereafter we returned our $15/month set top box to the Verizon store. The shitty part is that we had to pay an early termination fee of $120, but it was worth it and we would make that money back within 2 months.
I realize that $75/month for internet isn’t stellar, but this area is duopolized by Comcast and Verizon, and a lower price can’t be obtained without a new contract. Either way, without our cable service, we’re currently saving $60.00 every month. Or $720.00 a year. Or $9,153.82 compounded over a 10-year period.
While cable added $60 to our utility bill every month, alternative media sources that provide nearly the same exact content are available at significantly lower costs (and without contracts!) Three simple and cost effective additions to your TV can make it a media powerhouse: HD antenna, DVD or Blu-Ray player, and a streaming-media box.
We already had an Xbox 360 to play DVDs, so all we had to do was purchase a Roku streaming-media player and an antenna (starting at $10). Installing the Roku was extremely simple. Plug it into the wired network or connect to the wireless network. Open an account at roku.com. Authorize the device.
Then pick the channels you want (Netflix, Hulu Plus, Amazon Instant Video, Vudu, Pandora, Spotify, etc) and add them to your device. Some of these require paid subscriptions, others like Pandora only require you to have a free account.
There are a ton of options if you choose not to use Roku: Boxee, AppleTV, and Slingbox are some of the other big names. You might also choose to set up a Home Theater PC instead, which is an all-in-one solution.
We have a subscription to Neflix ($8/month), Hulu Plus ($8/month), and free access to Amazon Instant Video with our Amazon Prime subscription. If you’re a sports fan, you aren’t going to have very much luck with these subscription-based services. That’s where the HD antenna comes into play. These aren’t the same crappy antennas from years past. New HD antennas produce crystal clear images and are extremely reliable. They give you free access to NBC, CBS, ABC, FOX and PBS among others (list of channels for your area).
You don’t have to be embarrassed about having a Super Bowl party at your house, because no one will know that they aren’t watching cable (unless you tell them).
With our optional services we pay $75 (for internet) + $16 (Netflix/Hulu) for a total of $91/month. This is at least satisfactory, and the service so far has been terrific. I would highly recommend switching away from cable, even if you have to pay a termination fee you will make your money back tenfold in the long run.
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Hi, I'm Johnny Moneyseed and on my blog I write about how to spend money the right way, how to create thriving businesses and how to invest (even if you have zero experience). Join over 2,500 subscribers in the pursuit of financial independence by entering your email address below. I'll send you blog posts and occasionally free stuff, but I'll never spam you.