It seems everyone today is talking about joining the cable-cutters and finally ditching their costly cable TV. According to the Convergence Consulting Group, an estimated 4.7 million American households that previously paid for cable have cut the cord this year, up from 3.74 million that did so in 2012. We all have experienced the lousy customer service and mounting monthly bill, so it isn’t hard to understand why many people drop their service.
But before you take the plunge and cut your cable, here are some things you should consider:
Cable is expensive.
Well, duh. This may seem obvious, but it is important to analyze the money you are putting toward your cable provider.
What else could you be doing with the money?
Well, if you have credit card debt, getting rid of your hefty cable bill should be a no brainer: You can put that money toward paying off your debt instead. If you just feel too tight in your budget each month (even without debt) and are looking for ways to free up some money, you may want to look to your cable provider.
But let’s take another example of a 25-year-old guy who pays $75 per month on the cable bill. If he instead put that money toward a Roth IRA with an average return of 7% until he’s 65, he would have over $190,000. Really puts things in perspective, doesn’t it?
What you can (and can’t) watch without cable.
Unless you are ready to quit TV cold turkey, you are most likely looking at alternatives to getting access to your favorite shows.
You may be surprised to learn that almost all of the major networks (and therefore your favorite shows) are available online for free. The large broadcast networks offer online streaming of their shows on their websites, while free streaming services like Hulu, YouTube, and Amazon can grant you access to other shows.
For other cable networks and movies, there are premium streaming services that are significantly cheaper then your cable bill. With services like Hulu Plus, Netflix, and Amazon Prime, you can watch many shows (and movies!) for under $10 per month.
This still doesn’t cover all your bases, unfortunately. There are still some shows that are not yet available for streaming. But for those few, you can purchase a subscription to an entire season of your favorite show using iTunes for about a buck or two per episode.
Premium networks like HBO and Showtime are a little bit different. Unfortunately, there are currently no options to subscribe to these networks without a TV subscription. But we are hopeful that with increasing demand they will start to offer alternative subscriptions.
Another Achilles’ heel for many people contemplating the shift away from cable is live programming like sports and the news. Like HBO and Showtime, these programs are slow in catching up to the online streaming trend. Some live programming like the Super Bowl is streamed each year–but if you are trying to watch college basketball during March Madness, you may be scrambling to find a friend who still pays the dreaded cable bill.
Watching TV from a computer (or not).
If you can sort through all the above alternatives to your cable box, next you’ll need to figure out where to watch all this non-cable TV. Fortunately there are many affordable options out there today, from Smart TVs to the Roku. These options get streaming content to your TV with a small initial investment and some wireless internet.
The Roku starts at a $50 one-time cost and has apps that aggregate your TV content. With Roku, you can now watch on your TV that Hulu Plus or Netflix account you’ve been using on your computer.
There are even free streaming news channel apps and some sports programming, like the NBA. HBO GO has a Roku app as well, though you still need to have a TV subscription to use it; many people get around this by sharing login information with friends or family.
With on-demand TV becoming so popular, streaming services are now offering their own exclusive programming, like Netflix’s House of Cards.
All-in-all, costs of cord-cutting and switching to non-cable TV do add up. But with a little bit of research on your favorite shows, you will find that this is an easy expense to cut (or at least reduce). And don’t forget, you can put any extra savings toward a savings account or retirement vehicle. Now that is smart planning!