Good T.V.? How Much That Cable Payment Really Costs.

Ah the good, old television. Since gaining popularity in the 50’s and 60’s, television has been the preeminent entertainment medium. Not to mention its’ knack to deliver the ever important “advertisements” to the consumer. However since the 50’s and 60’s we have moved on from the 5 or so channels to literally hundreds of television channels that are accessible by cable or satellite services, kind of like Netflix, or an Amazon Fire Stick, but for old people.

While having a myriad of T.V. channels to waste your is nice, there is one problem. It’s not free (well really nothing is, but you gotta pay money for cable), this means that you have to shell out some cash if you want to waste time, putting off your next blog post, to watch Gold Rush on the Discovery channel. In the United States the average cable payment is $107 a month, which a raise of over 50% since 2010 when the average cable bill was something close to $70. So as a fun exercise let’s see how much that payment is really costing you.

First I am assuming that you just decided to stop watching T.V. which is quite a stretch, this analysis is assuming that you aren’t paying for satellite or cable anymore, along with not adding Netflix or any other paid streaming services. With that in mind let’s take a look at the numbers, obviously if you stop paying the average cable bill you save $107 a month. However if you’re into personal finance at all then you wouldn’t just let that extra money sit in a savings account earning less than 1% interest. No, instead you would put that money into an investment of some sort, earning you much more interest over time.

For example if you were to put the money into a fund that earns a very conservative 6% over time (for reference the S&P 500 has returned nearly 11% over the past 100 years), you could have $213,089 dollars after 40 years.

Now this may not seem like a lot, especially given that this is over a 40 year period, but it’s better than throwing $107 down the tube every month. In fact over that same 40 year period the average person would have spent $51,360 on cable T.V. And of course this is assuming that the price of cable doesn’t go up. Which given the fact that it has actually gone up 50% in 9 years, is incredibly optimistic and probably unrealistic.

Now because we can’t, nor shouldn’t live like Tibetan monks. The fact of the matter is we’re going to spend money on entertainment, whether that be a football game, or some good old fashion T.V. However, perhaps it is worth taking a look at how much you are paying for cable? Maybe realizing how much money you could be saving per month might be enough motivation to quit watching so much T.V. and get a streaming service for all your entertainment needs. Or maybe you could go outside as well, like they used to do in the olden days.

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