Sherpa Money Saving Tip #1: Cut the Cable

Michael Lux Blog, Money Saving Tips 11 Comments

I must confess.  I am guilty of spending far too much time in front of my TV.  On an average day I would estimate that I watch at least two hours of television.  While I’m making my television confessions I should also admit that during Black Friday 2011, I purchased an extremely large TV.  It wasn’t necessary, but I love it.

I share all this information so that it is abundantly clear that when I say cut the cable, I am not saying eliminate TV from your life.  I’m just saying there is a cheaper way to enjoy your favorite shows.

In my house, my girlfriend and I are both trying to pay off our student loans.  As a result we look to cut every penny we can from our budget.  Some of our ideas don’t work so well, such as the single-ply toilet paper experiment.  Other ideas, such as getting rid of cable, go great.  Now that we don’t have cable, we have two main sources for our TV enjoyment.

Source 1: Digital Antenna

If you are going to go without cable or Direct TV (or any satellite service), but still want to watch TV, the first thing you will need is an antenna.  I purchased an RCA Digital Amplified Indoor TV Antenna.  Having dealt with the rabbit ears of my youth, I was very nervous when I bought the antenna.  I’m happy to say that things have greatly improved since that time.  The reception we pick up is as good if not better than the cable signal we used to have (its a 1080i/720p reception) and it comes into our home for free!

(Update: Commenter Grayson from debtroundup.com recommends the Mohu Leaf Paper-Thin AntennaIf you are worried about the footprint of your antenna, this could be the answer.)

My one word of caution: verify that your tv has an internal tuner.  All products sold as TVs should have one (if they don’t by law they are supposed to be called monitors).  Its easy to check: if there is a jack on the back of the TV labeled antenna/cable, you are all set.

Source 2: Internet Programming

Of course, just being able to watch my local broadcast channels (ABC, CBS, PBS, etc.) was not enough for me.  Having treated myself to DVR service during my law school days, I wanted to be able to watch the Daily Show on demand.  I opted for a Hulu Plus subscription.  They have most of the broadcast and cable shows that I watch.  The girlfriend even gets to watch her food network shows.  Admittedly, the $7.99 is not a necessity, but its still pretty cheap compared to what cable cost.  If you prefer movies to television shows you can add Netflix instead or use them both.  Either way, you are still saving a ton each month.

Setting up Hulu or Netflix is very easy.  You can watch from any computer or gaming counsel.  We have a PS3 downstairs for streaming Hulu and upstairs we use the Wii.  Neither gaming counsel gets much use for games, but they are great for watching TV shows.  If you don’t have a gaming counsel, devices such as Roku or Apple TV also will do the job.  They even make blu-ray players that stream Netflix and Hulu.

How much can you save?

The answer depends entirely on how much you are spending each month.  We were spending $49.99 a month on cable, so cutting cable saved us around $42 a month.  For us that money all goes towards paying down student loan debt.  That adds up to over $500 a year.

For me, the thing I miss most is ESPN.  However, I would estimate that with our current setup I am able to watch 90% of the shows I want.  In my experience, its not worth an extra $500 a year.

Do you Hulu?  How much have you saved?