As technology evolves, people are jumping at the chance to cut the cable cord and move to internet-based TV and movie streaming platforms. But are these alternatives really a cheaper option, and if so, how much money could you actually save?
If you’re considering cutting the cable cord to reduce costs and live on less, this post dives into precisely how much it can save you.
Consider hidden costs of cutting the cable cord
Before canceling your traditional TV service, review your contract to see if there are hidden costs that may be implemented for doing so. If you signed a contract with your cable or satellite TV provider, will you incur any cancellation costs for terminating the policy early?
In the event that you bundle multiple services, such as your TV, phone, and internet, you may lose out on the bundle savings most companies provide as incentives. This could cause your phone or internet bill to increase, even though you’re saving money by not paying for cable TV anymore.
Speaking of internet, when switching from traditional TV to streaming services, your internet bill could increase, too. Why? Because you may need to purchase additional data every month to compensate for the fact that you’ll be accessing all your entertainment online.
Additional equipment may be needed
It’s true that cutting the cable cord can often save you money, but it’s not always guaranteed. There may be additional equipment you need to purchase in order to switch services.
Netflix only costs $7.99 per month — that’s loads cheaper than your $60 monthly satellite bill. But if you want to watch online subscriptions directly on your TV, you’ll likely need to purchase a separate product that allows you to do that.
Devices like Roku, Chromecast, and Apple TV all allow you to access the internet on your TV. With prices ranging from $30 to $200, there’s something to fit everyone’s price point.
These devices do not require a monthly subscription, so you only have to pay this fee one time. Though you can find a relatively cheap device, it’s an added cost that’s important to consider before you cut cable.
Cable TV alternatives
If you plan on replacing your cable with online options, you’ll need to do some shopping around to see which price point and plan makes the most sense for you. Here’s a sampling of the most popular services to consider.
Cost: $8 to $12 per month
Unlike live-TV watching services, Netflix is all about on-demand movies, original programing, and past seasons of your favorite TV shows. You can binge watch them as often as you’d like, but you won’t be able to watch seasons of shows that are currently on the air.
Netflix can be streamed on your home Blu-ray player, computer, laptop, smart TV, or on devices like Roku, Chromecast, or gaming consoles.
Cost: $8 to $12 per month
Hulu Plus is the premium version of the previously free online movie and TV-streaming service. You pay a monthly recurring subscription fee to access current and past season TV shows, greatest hits movies, and add-ons like Showtime.
With Hulu Plus, subscribers can stream current-season episodes and movies on any computer, tablet, game console, Roku, Chromecast and Amazon Fire TV.
Amazon Prime Video
Cost: $11 per month, or $99 a year
Amazon Prime Video features channels like PBS and Starz as well as an entire library of 40,000+ movies and shows to watch on-demand. The best thing about Amazon Prime Video is that it’s included with your regular Amazon Prime subscription.
Cost: $20 to $40 per month
Owned by Dish Network, Sling TV’s service allows you to choose your own channel packages with live access to local stations like CBS, NBC, ABC. You can also upgrade and customize your package with custom add-on stations like ESPN, HGTV, and HBO.
The basic Orange package starts at $20 per month and includes 25 channels, while the premium plan costs $40 per month and includes about 50 channels. Sling TV must be streamed on devices such as Roku, Chromecast, Xbox, and Amazon Fire TV.
Cost: $40 to $75 per month
Initially offered to customers who own a PlayStation console, PlayStation Vue now allows you to enjoy live TV, sports, movies, and news stations of your choosing. It includes all the main channels plus stand-alones like HBO and Showtime.
PlayStation Vue is not only available for streaming on PS3 and PS4 consoles, but can also be accessed via Roku, Chromecast, or Amazon Fire TV devices.
Putting it all together
You’ve checked for hidden costs, bought a new device, and decided on your streaming platform. Now what? Use this formula for calculating exactly how much you’ll save the first year after cutting the cable cord:
Monthly cable bill x 12 months = Yearly cost of cable
Replace TV channels with internet alternatives = Total streaming services
Cable cost – total streaming costs = Savings
Savings – cost of new equipment – hidden costs = True cost of savings
Below is an example of the true cost of savings after your first year of cutting cable. This is based on the $103 average TV bill in 2016, along with the cheapest streaming options and an average internet bill increase of $15 month.
$103/month x 12 months = $1,236 per year
Replace with Netflix ($8/month), Hulu Plus ($8/month), and Sling TV ($20/month) = $432/year
$1,236 – $432 = $804 in savings
$804 – Chromecast device at $35 – $15 internet increase/month =
$589 per year true cost of savings
It’s clear that cutting cable can save you some big bucks — even if you subscribe to multiple streaming platforms. However, do the math with your budget and see exactly how much cutting cable can actually save you.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|