How To Cut The Cord and Save Money

Cutting the Cord: Great, Affordable Alternatives to Traditional Cable TV

By Mike Peterson
In December 2, 2016

Cutting the Cord

Thinking about saying goodbye to cable TV? You’re definitely not alone. According to one recent study, one in five households[1] in the U.S. has cut the cord on traditional cable television, opting for lower-cost alternatives.

If you’re looking for a way to cut your monthly expenses, I can’t think of a better place to start than cable TV. Think about it: You pay a hefty chunk of change each month for a hundred or so channels – but if you’re like most people, you probably only watch a handful of them on a regular basis. So you’re basically paying a lot of money for a bunch of channels that you don’t, and probably won’t ever, use.

Let’s face it: Traditional cable TV is becoming outdated, and there are a lot of alternatives out there that allow you to watch your favorite TV shows or movies – without paying an arm and a leg.

But which alternative is right for you? And how much money can you save by taking the leap and cutting the cord? (For the purposes of this blog, I’m going to assume that your cable TV package costs $100, which is about average.)

Let’s take a look at some of the most popular options:

Amazon Prime Video

Amazon’s streaming video service offers thousands of movies, TV shows, and original programming. If you’ve already got a paid membership to Amazon Prime, you have free access to Prime Video, but you can also pay for a video-only membership.

Cost: An Amazon Prime membership costs $99 for one year, so that breaks down to around $8 per month (of course, you also get all of the Amazon Prime perks, like free shipping, and so on). If you buy a standalone Prime video membership, you’re looking at $8.99 per month.

Savings: Like Netflix and Hulu, an Amazon Prime Video membership will save you around $92 compared to cable TV.

Hulu

If you like to watch network TV shows (think Bob’s Burgers, The Big Bang Theory, Empire, etc.), you can’t go wrong with Hulu. For $8 per month, you can stream current (and past) seasons of most TV shows, plus original Hulu programming, with a few commercials thrown in. If you splurge for the $12 per month subscription, you get all the TV you want with no commercials.

Cost (per month): $7.99 for standard subscription with commercials; $11.99 commercial-free
Savings: If you go with the standard subscription, you can save around $92. If you spring for the commercial-free version, you’ll save will save $88 per month.

Netflix

In addition to offering a wide range of movies, Netflix also offers a solid lineup of critically acclaimed original programming, including Stranger Things, Daredevil, and Luke Cage. Netflix offers three digital streaming plans at three price points.

Cost (per month): You can get a basic subscription for $8 a month, but if you want fancier options like high-def or the ability to stream on multiple TVs at once, the price can go up to $10 or $12 per month.
Savings: Depending on the plan you choose, you can save between $88 and $92 per month if you cut cable and switch to Netflix.

Sling

Sling offers a mix of local channels plus cable favorites like ESPN, Comedy Central, Food Network, and the Disney Channel. The basic package is $20 a month, but you can upgrade to get more channels. And the best part is that you don’t have to sign a contract, so you can cancel or switch to a different package any time. You can also add a la carte sports channels, kids’ channels, and premium movie channels like HBO or Showtime for an extra monthly fee.

Cost (per month): At $20 per month, the “Sling Orange” package is the most budget-friendly option. The “Sling Blue” package is $25 and includes extras like AMC, BET, SyFy, and Bravo.
Savings: Again, this depends on exactly what package you pick. For this example, let’s say you opt for the $25 “Sling Orange” package plus HBO for $15 per month. That’s a total of $35 per month, which will still save you around $65 per month compared to traditional cable TV.

Indoor digital/HD antenna

If you’re only interested in catching local programming, you may want to opt out of any subscription- or membership-based and just get yourself a good antenna. Today’s antennas aren’t the “rabbit ears” of the 1970s and 1980s, either: Modern antennas are sleek and easy to install.  A couple of things to keep in mind: If your TV was made before about 2007 you’ll need to buy a converter box). Also, digital antennas will only pick up channels in a 30-50 mile radius, so your options will vary depending on where you live (check out this site to find out what channels are available in your ZIP code).

Cost: Indoor HD antennas vary a great deal in price, but you can get a high-quality, well-reviewed option for around $40. If you want to break that down over a year, that’s about $3 per month.
Savings: The first year, you’ll save $97 per month if you cut the cord in favor of a digital antenna. After the first year, you’ll save $100 per month!

HBO Now

Until recently, frugal pop culture junkies faced a tough choice: Miss out on Game of Thrones or fork over a king’s ransom for a premium cable TV subscription. With HBO Now, you can pay $15 per month to stream a wide selection of movies, series, and documentaries via your laptop, streaming device, or game console. And like most other streaming services, you can cancel and/or re-activate your subscription any time.

Cost: $15 per month.
Savings: You can keep $85 in your bank account every month if you opt for HBO Now in place of a traditional cable package.  

This is a great time for frugal TV fans or budget-minded movie lovers. Thanks to today’s wide array of streaming services, amazing developments in antenna technology, and the shift toward a la carte cable offerings, you can cut your entertainment budget and save more money every month – without giving up your favorite shows and movies.

And remember, you don’t need a cord to get advice on credit, debt repayment, or other finance-related topics. Contact the Debt Guru team today for a free debt consultation.

 

[1] http://fortune.com/2016/04/05/household-cable-cord-cutters/

Mike Peterson

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.