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The Lifetime Cost of Cable TV

Last updated by on January 11, 2014

We’ve been talking a lot about wants vs. needs lately and how to control your wants. One of the most notorious wants that many struggle with is cable TV.

That’s right – cable TV is a want. You would have a very hard time winning a debate on the argument that satellite or cable TV is a need.

However, most of us have justified the expense. Partly, because it comes conveniently wrapped in a monthly payment plan.

According to CNN, the average cable bill is $75 per month and has been rising by 5% annually, outpacing inflation due to content provider negotiations for more money per subscriber (which providers then pass along to customers).

Taking a look at Comcast’s prices,

  • Digital starter, their lowest-tier digital cable plan costs $60.98 per month
  • Adding HD DVR is another $15.95 per month
  • Total: $76.93 (before taxes)

That may not seem like a lot, but when you compound it over many years and look at the opportunity cost, you start to see just how expensive cable TV really is…

The Lifetime Cost of Cable

What if, instead of purchasing cable, you were to get rid of cable and add your monthly savings to your investment portfolio?

What would you theoretically be missing out on, or paying over your lifetime?

To calculate, let’s assume:

  • lifetime cost of cable TVYou start paying for cable at age 23.
  • The starting price is the average price quoted earlier, $75, and there is inflation on the price of 5% annually (real cable inflation percentage).
  • You continue paying for cable until the age of 80.
  • We are using after tax dollars (which is what you pay for cable) that grow tax free in a Roth IRA.

We’ll then figure out the lifetime cost of cable at different investment return levels using the AARP investment calculator:

  • 4%: $634,970
  • 6%: $1,102,950
  • 8%: $2,081,549
  • 10%: $4,209,990

We’re looking at anywhere from $634K on the low end to $4.2 million on the high end! Considering that the average retirement savings per household in the United States is $18,000, the alarm bells should be going off.

This, of course, does not take into account that the average American watches 81 hours of TV per month, 972 hours per year, or over 55,000 hours per the 57 years we used in this post. What additional return in skill development, work, networking, or exercising could you gain from having an another 55,000 hours of life?

That’s only one common expense. Kind of scary.

Cable Discussion:

  • Does this view of cable costs change your outlook on justifying it as an expense?
  • How much are you paying per month for cable?
  • Why do you keep paying for cable?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 10,000+ others by getting FREE email updates. You can also explore every post I have written, in order.

  • Bobby Lee says:

    Wow, the potential cost is eye-popping! This really goes to show that the FCC (through Congress) should force cable operators to offer channels a la carte, so consumers can control the cost of their cable TV.

    Some great links: 1) wholesale rates that cable operators pay to television networks for their content via AllThingsD ( and 2) an oldie but goodie article about la carte cable via Wired (

    • Cameron says:

      I’m pretty sure bigger government is not the answer.

      • jni says:

        if we didn’t have government limits on costs now, we’d be paying with gold dust. government is needed to keep corporate greed in check

        • yishmeray says:

          Government is needed to keep corporate greed in check?

          I am sorry, but that is patently and overwhelmingly false. Oh sure, in a beautiful lollipop world with unicorns and every single human being does right and good and helps each other, maybe the state’s minions would be righteous and true and helpful altogether.

          This isn’t the world I live in. Nor do you.

          Evidence is easy to find substantiating the exact opposite. Government officials _enable_ corporate evils of all kinds. Most of the leaders of, taking only one agency at random (the FDA) come from the industry they regulate. They are all pals. They take care of each other. Money flows between monsanto and the FDA freely.

          Take another example: finance. Goldman Sachs and other of the larger financial organizations send their people into government roles overseeing who? Themselves. Their pals. Look into the TARP and Tim Geithner.

          No, no, government does not restrain corporate greed. It enables and expands and justifies it.

  • Emily @ evolvingPF says:

    Wow, that is shocking. Thanks for this post, and good point about TV being basically a timesuck that you’re paying for.

    I do like to watch quite a bit of TV, but we get it all free online through Hulu, Netflix (a gift, so no cost to us), and ESPNU or over the air through bunny ears. We don’t spend any money on entertainment in the form of monthly installments.

    This post is really making me rethink what we pay for internet though ($60/month)… To me that’s much more easily justified than TV since my husband works from home quite often.

  • Kira says:

    Thanks for this post. I had cut off cable for the last three years and was getting to the point where I would have wanted it back. Your post really opened my eyes again as to why I should not get back to it! Thanks!

  • Kate says:

    I haven’t paid for cable or internet in 4 years and in the last 4 years I have been able to save and pay off all of my credit card debt!
    I don’t miss TV at all. The only downside is the grief I take from my parents who feel I am missing out on what is happening in the world. I see it a little differently. Once I got off TV, I find I am annoyed by the fear, misinformation, hype, drama and sadness that is reported daily on the news. We download our favorite shows on i-Tunes too. I listen to VPR (Vermont Pubic Radio) at lunchtime and get caught up on the day’s news that way instead.
    Not having internet at home can at times feel like a slight inconvenience, but I work on a computer all day long and do not feel like booting up a computer once I get to my home. I am lucky that my employer provides me with a smart phone which we use for internet research at home.

  • Jessica Mercedes says:

    I have never had cable in my home, but last year (ironically at 23) I decided to give it a try. It started out at $50 which I though was reasonable, but thdn it jumped to $90!!!! My introductory period had ended, plus they added another $10 as a rate increase to all customers. Of course I was stuck in a contract but after a little complaining they removed that extra $10 charge. My contract is up in a couple months and I’m seriously considering cancelling. My “must watch” programs dont come on Hulu or Netflix, but they are most reality show garbage so I can probably live without them. Cable really only shows reruns all day anyway. I be better of with Netflix. $8 a month no contract is alot better than $80.

  • Ryan @ LifeFreshOut says:

    I’ve been going back and forth about canceling my cable for a few months now, especially since I primarily watch movies and have Netflix. I still haven’t been able to convince myself to cancel it, and the contract cancelation fees as an upfront cost don’t make it any more appealing, but looking at these numbers does wonders. Honestly though, I see half of the money spent on cable going towards other avenues of entertainment, so I wouldn’t see as much of a financial return. Once my contract is up, I will seriously be reconsidering this. Netflix, Apple TV, and Hulu might be enough to keep me from noticing.

  • Katie says:

    I feel that posting sums when you’re 80 and comparing them to retirement nest eggs is an unfair comparison. Retirement funds are measured at 65, and my how 15 more years of compounding interest and no withdraws would make them shine. Quick calculation give the savings at 65 to be:

    4% 247k
    6% 369k
    8% 576k
    10% 937k

    Certainly this is nothing to sneeze at, but significantly less than above.

  • Alana says:

    Wait, people in their 20s still pay for cable? Or have TVs? I’m 28 and no one I know even has a television. We all watch shows through Hulu or Netflix or iTunes. Live things like sports games and political debates are usually available for free on media websites. Why would anyone pay $75 a month to watch stuff that isn’t even what they want when they want it, and with full-length commercials! I haven’t seen a commercial break longer than 30 seconds in years.

    • Chris says:

      You must live in a very “techy” (or very frugal!) part of the country. Mind if I ask what part of the country you live in? All my friends (20 something working professionals, some single, some married) have cable with all the bells and whistles (e.g. sports channels, HBO, etc) and most are paying at leat $75 a month, but probably closer to $90+ per month.

    • Dani says:

      All the 20’s I know (myself being one) have cable, HDTV’s, DVR’s and subscriptions to netflix. I’m also curious about your location. I’m in DC.

    • Alana says:

      I’m currently in New York City, but I moved in the last year from Portland, Oregon. TVs have seemed increasingly obsolete (like CDs and DVDS) to me for the last 6 years or so now — my parents don’t even have one any more. I suppose I do have a few friends who work in tech industries, but most people I know started watching everything on their computers during or shortly after college. And I don’t think it’s a frugal thing either — my friends who are making well into six figures still don’t have TVs. I thought it was a generational change, but apparently it could be a geographical one too.

  • joe says:

    The proper way to value this today is using the formula for the present value of a growing annuity. You are off by two orders of magnitude.

    The main mistakes you made are that this is not in today’s dollars (since inflation is built into the contribution and the nominal rate of return), and you forgot to discount for receiving those devalued dollars in 57 years. You also picked an unrealistic long-term cable growth rate, which being higher than wage growth would eat up a greater % of your take home pay each year. Unsustainable.

    To put it another way, if you went to a bank and told them you’d pay them $900 a year for 57 years (growing by 5% annually) and you want to borrow $4MM today…. well lets just say they’d say no.

    On the positive side of the ledger, I think your point is still valid about cable being a waste of money, even if it’s only really worth $30K right now, which is a lot.

  • Anonymouse says:

    Thanks for the eye-opening post. I just bought the RCA antenna you linked to, and will be disconnecting Comcast in a few days. It’s a win-win situation – I save money, and give less money to a greedy corporation. Keep up the good work!

  • Kevin says:

    I found it hilarious that directly below this article was an advertisement for RCN cable @$65 a month. The antithesis of a targeted advertisement…

    Otherwise, great article! Nice perspective on the overall costs.

  • Tyler says:

    Since that is assuming a 5% inflation / increase, then all of the “costs of cable” would also be inflated to levels years and years down the road, correct?

    I agree that it’s still quite ridiculous, but that should ease your mind a little 🙂

  • Bruno says:

    You failed to take into account the time value of money. $2.4M you save up 57 years from now will not buy what it does today by a longshot, so it seems like a bigger number than it is. You need to discount for inflation expectations, both for the savings and for the price increases in cable along the way.

    At today’s current artificially low interest rates, you can assume that, net of inflation, you earn only about 1% a year. Just as a rule of thumb. So, if you spend $100/mo on cable/internet, that would be the same as having an extra $52,000 in your pocket today.

    Nothing to sneeze at, but not millions. And of course, internet has been proved to save consumers more than it costs in the form of research and price shopping ability, as well as education.


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