The Lifetime Cost of Cable TV

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. We like to be entertained. There’s a huge cost (and lifetime cost) to that entertainment, however.

According to US News, the average cable bill is $217.42 per month. The annual cable TV price regularly outpaces inflation at large due to content provider negotiations for more money per subscriber (which providers then pass along to customers). That’s not chump change, 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…

lifetime cost of cable TV

The Lifetime Cost of Cable TV

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:

  • You start paying for cable at age 23.
  • The starting price is the average price quoted earlier, $217, 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%: $1,837,181
  • 6%: $3,191,201
  • 8%: $6,022,615
  • 10%: $12,180,905

We’re looking at anywhere from $1.84 million on the low end to $12.18 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 84 hours of TV per month, 1008 hours per year, or over 57,456 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 57,456 hours of life?

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

Cutting Cable TV Costs:

What’s the best way to cut cable TV costs? Well, assuming you don’t want to go completely cold turkey after suspending your cable TV subscription, you probably want to get a digital antenna and OTA DVR for local broadcast channels, get a Roku, Google Chromecast, or Amazon Fire TV stick streaming device, and then take a measured approach to keeping your video streaming costs low. Go slow, get sign up bonuses, and pause your subscriptions regularly.

Cable TV Cost 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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