Let’s do some math. Don’t worry, it will be entertaining; or at least it will be entertainment themed.
As it stands right now, cable TV and Netflix eat up greater than 75% of my wife and I’s monthly entertainment budget. With our imminent purchase of a house, that budget could be shrinking. This has sparked a conversation in our home about how to maximize the value of the money we set aside for this most paramount of line-items. What follows is my plan to reform our entertainment budget (I will keep the numbers rough so this conversation flows quickly).
Currently we pay $130 per month (including tax) for cable and Internet — our provider strategically bundles them so that consumers can’t easily decipher the actual value of either. We also pay $20 for Netflix, totaling $150 per month or $1,800 per year. When we move to the new house our cable provider will graciously lower our rate for a period of time. I believe that rate is somewhere between $90 and $100 (let’s say $95 to keep things simple). With Netflix, our total monthly expenditure will fall to about $115. That isn’t too bad, but I can break it down further.
Recently a friend of mine, who has the same Internet and cable provider, decided to cancel his cable TV subscription. It took some negotiating, but he ended up with a monthly price around $50 for Internet by itself. Assuming that anyone could negotiate this same rate, we can value the cable subscription portion of the bundle at $45. That’s not all that bad for a few hundred channels, right? In our case that is dead wrong!
In our home At least 90% of the purposeful TV viewing, meaning we sit down to watch a specific program and not channel surf, is done on network television stations. That means that we pay $45 per month, $540 a year, for background noise. Why? D-V-R!
Those three simple letters are a thorn in my side. We pay $540 a year just for the ability to skip commercials.
Step 1: Cancel Cable
My first proposal is that we cancel our subscription to cable TV. This will immediately free up $45 a month. Although it would probably be best to save this money, I would be happy if it were simply spent on things we actually received value from: date nights, clothes, food, etc. However, if it is determined that we can not live without the ability to record live TV, I suggest that we purchase Elgato’s eyeTV HDHomeRun wi-fi enabled dual HDTV tuner. This product, costing $180, will give us the ability to record the network TV stations which are broadcast in HD and are free. Its features are far superior to our cable provider’s DVR and it would give us the ability to watch recorded programs on our iMac, AppleTV or iPad. The $180 cost would be offset in just 4 months of not paying for cable; making the total savings for the first year $360.
Step 2: Cut Netflix Spending by Half
But wait, there’s more! My second proposal is to dramatically reduce Netflix spending. Our current Netflix plan includes 1 DVD by mail and unlimited streaming content. The combination of our busy lifestyle and a toddler make it nearly impossible to sit down and watch a movie from start to finish. The result is that our 1 DVD by mail sits on a countertop for weeks before we get around to watching it. By eliminating this portion of our Netflix plan we would reduce our bill by half. Yes, $10 doesn’t seem like a lot; but, would you go to theater and purchase a movie ticket just to go home without viewing the film? Me thinks not! We can find a better ways to waste it than having a DVD delivered to our house that we aren’t even in the mood to watch. Besides, we can use RedBox to rent the occasional new-release or rent a movie through the AppleTV and still come out ahead.
There you have it. My plan in its entirety: Eliminate cable TV and cut Netflix spending in half; for a monthly savings of $55 and a yearly savings of $540 ($360 with the purchase of the HDHomeRun system). Please note that these proposals do not take into consideration the expected increases in productivity – which are quite substantial.
Let’s put it to a vote! Yea or nay in the comments below.