We cut the cord on cable TV sometime around January 2013. When we did we replaced $129 per month service with a $55 internet only package, and since moving to a new area we are now on a $45 internet only package. We added a digital antenna, which worked really well in Brooklyn, but might not be so effective here in the boonies; a subscription to Hulu Plus for $7.99 per month, and a lifetime subscription ($40) to a service called PlayOn.
Playon I haven’t even bothered looking at for a year, as it was really pretty crap, Hulu Plus seems OK but I don’t know with any certainty that it is worth it over the regular, free version of Hulu. There really are so many different solutions out there now that it is mindblowing – from big firms like Netflix and Amazon Prime, to smaller players like Moho Leaf, MythTV, PlexTV etc.
The Basics of Cord Cutting
When I think of cutting the cord, it isn’t so much the act of removing the TV/entertainment, rather it is the removal of this source of outflow from the budget. And while I know that it seems a trivial amount, it is a small piece of a bigger picture. I wouldn’t recommend cutting the cord for people who enjoy premium shows, such as Sports or HBO as a guilty pleasure. There is considerable value in having an outlet to relax and switch off from the day. However, for people who don’t watch a lot of TV or can do without it the savings are valuable.
How to cut the cord
You can just cancel and return your equipment to the cable company (contracts notwithstanding) however most people still require at least Internet these days, so what we are doing is swapping the content delivery system. In order to do that you need two basic things: a device capable of receiving and a subscription service to work with that.
There are many solutions now, from a USB stick like ChromeCast or a mini box like a Roku player, or even just hooking up a regular PC to your TV. I personally am using a Mac Mini for the task as it allows me to drop into email and other things with ease. However, all of these only offer somewhat limited show options until you signup with a service provider like Netflix or Amazon Prime TV.
The savings
We are now saving about $78 per month, in our case the PC, and now Mac was always part of our TV setup so no additional cost there. What I like most about saving when earning is that it not only shifts the money from expenses, but it increases our savings. From a Financial Independence, Retire Early (F.I.R.E.) perspective this is quite a big deal, it means that my monthly cost to support my lifestyle in retirement have reduced by $78 per month, and my savings towards that goal are boosted. As trivial as it sounds to save money on cable, to someone in their 20’s or 30s its huge, and means you could likely retire a year or more earlier than if you didn’t do this.
There are many ways to consider the savings. One might be present value: in order to produce $78 per month for the next 30 years I would need a lump sum of $24,250 today invested in a 1% CD. That figure could be a lot bigger if we pushed it out over natural lifetimes, but for a reality check it is important to realize prices on things like Netflix et al could raise in the future.
The next step
We did so well with Cable that we are now looking at cell phones. I trialed a phone with Republic Wireless recently, it comes with a $299 upfront cost, and then monthly charges range from $5-$40 all in. Even if we signed up for the most expensive plans we would be ahead of the game vs ATT within months. I’ll be writing up a more detailed explanation of that shortly.
Thanks Matt, really appreciate this article. Looking forward to seeing your input on cellphone as I’m really looking into breaking up with AT&T
Me too – I’m done with their fees.. have to part with an iphone and a legacy unlimited plan though… makes it a bit harder, but not too much.
my wife and I cut the cord last year too. I built a hackintosh htpc for about $400 and loaded xbmc, our break even from cancelling cable to the htpc was ~9 months, I had many other cheaper options for the htpc but wanted a full computer on top. With xbmc we can get any show/movie we want, including hbo, showtime. Its awesome and the service is free. I also built an antenea for OTA channels, couldn’t live without Sunday NFL games
breakeven was 4.5 months. not sure where i got 9
hmm… you can get HBO through xmbc without any subscriptions? I didn’t realize that.
I’m close to canceling cable. The only thing keeping me is the 24 hour cable news. I don’t watch it daily, but when there’s breaking news, I like it.
I’ve looked into Republic Wireless, seems to work good for metropolitan areas, not as reliable for remote areas.
I don’t like to be glued to a set – I think twitter, social media is a good source for news (at least the breaking part) then I like to look it up online.
I think all cell service seems to work better in metropolitan rather than remote areas, but republic is neat in that it runs on your wifi at home so you could be anywhere and have coverage. It then runs on Sprint and thirdly runs on roaming networks.
“I wouldn’t recommend cutting the cord for people who enjoy premium shows, such as Sports or HBO as a guilty pleasure.”
“Sport is the opium of the people” Karl Marx anno 2014 (it used to be religion).
You have probably already read Mr Money Mustache’s review of Republic Wireless. It didn’t impress my wife enough. Instead we got Virgin Mobile + Ooma.
I glanced at it, it was a bit to selly for me at the time, so I got my own phone from them to review. There are certainly other options too, and I don’t know which is the best of the low cost options- but these guys seemed good enough to me.
Thanks for the Marx quote.
I have Republic Wireless and I am very happy with them. $10/month for unlimited minutes and texting, plus I can switch to a 3G or 4G plan for a few days if I want.
I was going to make a snarky comment about Matt stealing all my referral traffic, but there’s a cap on referral credits anyway, so we’re good.
I used your link!
Thanks!
+1 for xbmc. a third party sells a STB (think appleTV) for XBMC around $100, so you no longer need a dedicated computer.
You have a lot in common with my setup. Hulu Plus isn’t better than regular Hulu unless you are running it via PC, you just have to have it to run the native apps on Ipad, Roku, etc. The playon app actually lets you use Hulu non plus to save the $$$ albeit not quite as nice of an experience.
As far as cell phones, the first question I have for you is, do you even really need a data plan ? Or do you really need two+ data plans ? Republic wireless is the cheapest one I know of if you need a data plan, but it is sprint based which can be an issue for some people.
If you can go data plan free, and just stick with wifi for data/use cell calling/texting only, you can switch to T-Mobile prepaid for $100 the first year and $10/yr after that, if you don’t use very many minutes or texts – $ .10 per minute/text.
Cheapest I know of after republic is the $30/mo T-mobile data plan, which is 5gigs/unlimited text/300 minutes/month (throttling, not a charge after 5 gigs). Or cheapest with AT&T service is straight talk @ $45/mo for unlimited minutes/texts/”unlimited” data (throttling after some amount).
With any of those you could potentially keep your Iphone since you can just order a SIM card.
Hey Matt, I just switched to WR and I got my refurb phone for $214 shipped. Haven’t had it too long but wife’s been on it for months and satisfied. I’ve not go affiliation to this link. Heard about it from Rick Broida (CNET)
http://www.ebay.com/sch/i.html?_odkw=moto+x+stockpoint&_osacat=293&_from=R40|R40&_from=R40&_trksid=p2045573.m570.l1313.TR0.TRC0.H0.XRepublic-Wireless-Certified-Pre-owned-Motorola-Moto-X-Black&_nkw=Republic-Wireless-Certified-Pre-owned-Motorola-Moto-X-Black&_sacat=293
Great point- I thought about it but just went with new, probably not the best move…
Thanks for the background. Yes, I need cellular data- I’m always on the go and updating the blog or forum from my phone. I’ll probably opt for the 4g package with mine (got the wife one first) when my contract clears next month with att.
You’d save a ton by getting Android and avoiding apple’s hugely expensive ecosystem . I haven’t paid for premium cable nor gone to a movie nor bought music in years. All thanks to bittorrent. Saved thousands. That Android has vastly more choices with better performance at lower upfront prices for hardware is just an added bonus
Yep, my only issue with Android is I struggle with typing, I think the apple predictive text is better, but Android has (cheaper) apps for that too I believe.
Never heard of this BitTorrent (ahem..)
As a tech guy please change the what you call the Chromecast and Roku stick they are HDMI not usb (they use usb to power them). Also Plex is amazing for local content (movies on a hard drive) but requires a “server” to run (could be any computer) and while it does have “channels” I don’t find it very useful for streaming video from the internet.
I love a Chromecast with an android phone or tablet to control it. Then use Plex for everything on my media server and Amazon/Netflix/whatever app to “Cast” for streaming video.
Sorry! I was just eyeballing it online and thought it was USB!
We dropped cable with our most recent move. I am going write about my setup, but my cable offered 30 channels for $5 a month on top of our internet package, which was too good to pass up. It allowed me to pull stuff over the air easier. I also have Netflix, Hulu, and of course my massive movie collection on Vudu.
We haven’t had cable in a while, make do with Netflix and Hulu+. My only frustration is I have no way to decently watch NFL games. I will be very happy when they’re finally done with their DirecTV contract and we can stream games.
It’s been 8 years since we cut the cable TV. That one decision has saved us thousands of dollars and hundreds of hours. btw, for people with landlines, try the new Obihai device. It comes free with unlimited US incoming/outgoing and there’s no monthly charges. Not sure about 911, so read the fine print.
The next best is Ooma device. For less than $5 taxes per month, you get unlimited incoming/outgoing for an initial cost of $200.