Does Cord Cutting Actually Save Money?

Many people wonder if cutting the cord - which involves giving up traditional cable television in favor of streaming services - actually saves them money. In most cases, the answer is no. While you might think going cord-cutting would reduce your costs, the reality is that subscribing to individual streaming services often ends up being more expensive than sticking with cable.

Absolute Truth Behind Cord Cutting

To clear up some confusion:

Cord cutting means no paid TV subscription. If you still have a cable or satellite TV service, you are not strictly speaking a 'cord cutter'. Even if you rely on a phone line or streaming services as an alternative, it is not considered cable cutting. The installation and service of your internet connection is not part of the saved costs. While some think that the internet service itself is an additional cost, it is typically required for streaming services.

The Antenna TV Alternative

In areas where an antenna can capture a sufficient number of channels, it can indeed be a cost-effective alternative. In my region, for instance, 60 to 70 channels are free using an antenna. However, the availability of free channels varies by location, and in extreme rural areas, free channels may be nearly nonexistent.

Streaming Services as an Alternative

For those who do not mind a few buffering moments and irregularities, streaming services can be a viable alternative. Though you might save a small amount of money, the convenience of buffering and the difficulty in locating specific channels can be frustrating.

Custom Savings Through Efficient Cable Management

The reality is that the answer to whether you can save through cord-cutting is highly dependent on your current TV habits and package. Many unique factors come into play, but here’s an example from a customer of mine.

Customer Scenario

A customer of mine had a top-tier cable package, including HBO, Showtime, TMC, and other add-on channels. On top of this, they had faster-than-baseline internet, a home phone line, and a cell phone with unlimited talk, text, and web access. Their total monthly bill was $327.

By renegotiating their cable contract and simplifying their services, I was able to reduce their bill to $185 per month. This not only provided savings but also no loss of service. Over a year, this would result in a net savings of $1,704. Without moving to purely streaming, the customer was able to save by making small adjustments to their current services.

General Tips for Saving Money

There are several simple ways to save money on your existing TV services:

Reduce Rental Fees: A common hidden cost is the rental fee for your modem. By buying your own modem from Amazon or Best Buy, you can save around $10 to $15 per month. Opt for Streaming: Investing in a Roku device (around $30) can replace your cable boxes and give you access to both live TV and on-demand content, with savings on rental fees and cable box charges. Use Cloud DVR: Many cable providers now offer cloud DVR services, which can save you money by eliminating the need to rent additional boxes or DVR units.

Even a small upfront cost, like the $60 for two Roku devices, can save you about $40 per month. Over a year, this equates to $480 in savings, excluding the cost of the device.

It's important to note that while there is a one-time investment, you can offset this cost by adjusting your budget to save the money you previously spent on rental fees.

In conclusion, while cord-cutting does not always save you money, there are many ways to reduce your costs through efficient management of your current services and smart investments in alternative solutions.