You did what??
Seven months ago we did the unthinkable: we cancelled our cable. Our cable plus phone plus internet had grown to over $200 per month, and I realized that we were spending $2,400 per year for TV! Even worse, that $200 per month compounded at 7% over 10 years is $34,600!
$34,600 for TV?
If we take that $200 per month and invest it at an average rate of return of 7%, at the end of 10 years that luxury will have become worth $34,600. If your salary is $34,600 (after taxes, of course), you would be working for one full year out of every ten, just to pay for cable TV!!
But what could we do? We are an average, TV-loving family. We have friends who do not even own TVs, but we are not that family. We are the flat-screen owning, DVR-ing, OnDemand watching family.
Streaming Services to the Rescue
Since we didn't want to give up TV completely we investigated the possibilities of streaming services. I had thought you could only stream them to your computer, and I had visions of us huddled around a laptop trying to watch Dirty Dancing. It wasn't a pretty picture. But what I found was that there are a number of subscription services available, and you can stream them from any Blu-ray DVD player or internet streaming device such as a Roku and watch them on your TV. To watch on your Blu-ray player, just hook up the DVD player as you normally would, and look for the streaming options on the on-screen DVD player menu. To watch on a Roku or other streaming device, just follow the simple instructions included with the device to connect it to your TV and select the "channels" you subscribe to on the Roku on-screen menu.
There are many streaming services out there, but here are the ones that we tried and enjoyed.
Netflix
For $7.99 a month you get commercial-free TV shows and movies. There is a huge catalog of movies and plenty of television shows to watch. Netflix does not include the current seasons of shows on cable right now, but it does include past seasons of thousands of shows. Netflix has also started producing its own series, and they are fantastic. They produced another season of Arrested Development after the networks cancelled it, and they produced the original drama series Orange Is the New Black and House of Cards. In addition, I have discovered many great British series on Netflix, such as Doc Martin.
Amazon Prime
Amazon Prime includes both a streaming commercial-free service and free two-day shipping from Amazon. At $99 per year, it's a steal. Not only do you get a huge library of television shows and movies that you get for free through Amazon Prime, you also get access to other shows and movies you can rent or buy. As soon as movies come out on video you can rent them from Amazon Prime, usually for a price comparable to OnDemand cable services.
Hulu Plus
For $7.99 per month you can watch new episodes of current series the day after they air on television. Hulu Plus does show commercials during the shows, but there are fewer than what you have to watch during a broadcast of the show. I have found that I rarely watch Hulu Plus, but my spouse likes it.
An Old-Fashioned Antenna
Remember these? So many of us have gotten used to paying for TV we've forgotten that it's still being broadcast over the airwaves for free, and in HD no less! The picture quality of broadcast HD television is excellent -- much better than cable. Why? Because to deliver thousands of channels to your home the cable company has to compress the signal, which degrades the quality. Not so for broadcast television. The first time we hooked up an antenna to our HD TV and watched a football game we were blown away by the picture quality. Depending on where you live you may need to put the antenna on your roof. This reminds me of the old days when my Uncle Frankie used to climb onto the roof to turn the antenna in his underwear. Luckily they lived out in the boonies so no one could see him, but my Aunt Geve was always worried that if he fell off the roof the EMTs would see him lying outside in his underwear. I do not recommend this, by the way.
The Drawbacks
The biggest drawback we have found is for sports fans. As long as your local broadcast stations are airing your game, it's no problem. Just hook up your antenna and you're good to go. But what about when the game is being carried by Root Sports, ESPN, the NFL Channel, or some other cable channel? Well, especially during the hockey playoffs you'll want to make sure you've been nice to your neighbors, friends, and relations for the rest of the year. ;-)
The Savings
Between Hulu Plus, Netflix, and Amazon Prime we are spending roughly $24.25 per month on television, a difference of $175.75 per month from the $200 we used to spend. Not bad! Compounded at 7% for 10 years, that's a savings of $30,404.75! In other words, we are saving enough just from cutting cable to fund one full year of retirement. Over the next 20 years we will have funded two full years of retirement. And we not only get to watch TV, we have a HUGE catalog of shows to watch!
What other small changes add up to BIG retirement savings? Stay tuned!
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