Are we spending too much for talk and TV?
Spending on home entertainment and communication is rising. Make sure you're not buying more than you need.
If you haven’t noticed when you pay your bills, the price Americans pay to be entertained and stay connected is rising.
According to The New York Times, the average American is expected to spend $997.07 this year for cable television, Internet and video game service, plus another $1,000 for cell phones. That’s up from $770.95 annually in home entertainment and Internet in 2004. According to The Times, “the average family is spending as much on entertainment over devices as they are on dining out or buying gasoline.”
The Times interviewed the Anderson-Rapoport family of Roanoke, Va., who estimate they spend $400 a month, or close to $5,000 a year, to entertain their family of four at home. That includes BlackBerry data plans for the parents, texting plans for the teenagers’ cell phones, two $50 annual subscriptions to Xbox Live, DirecTV, high-speed Internet and Netflix.
“We try to be aware of it so it doesn’t get out of control,” John Anderson told The Times. “But, yeah, I would say we’re pretty wired.”
While many of us probably don’t have all those monthly expenditures, the amount of money we do spend on cable television, Internet, cell phone, home phone and other devices has certainly risen in the last two decades.
While we’d probably be better people if we never watched television or sent text messages, for most of us that’s not going to happen. Go back to a life without cell phones? It’s not likely.
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However, it’s good to do a periodic inventory of all your plans to make sure you’re really using everything you’re paying for and getting the best deals. Have prices fallen? Can you get a better deal if you ask? Would you save money if you didn’t buy an unlimited-long-distance package or a texting package and paid by the call or the message? Have your needs changed?
Ask yourself some serious questions about your entertainment and communication spending.
Cable or satellite TV: Do you really watch all those channels you pay for? The companies make it difficult to save much by trading down to a smaller package, but are you watching $80 worth of TV a month? Would a free service like Hulu, a subscription to Netflix, buying shows on iTunes or DVD, or a visit to the public library save you substantial money? Start by calling the company and threatening to cancel and see if you can get a deal. Often you can.
J.D. Roth at Get Rich Slowly found he was able to cut his TV bill in half by cutting his cable to a bare-bones plan, watching shows for free on Hulu and buying some shows from iTunes. Sean Fallon at Gizmodo has lots of detailed information on alternatives to cable or satellite.
Netflix: Are you watching enough movies and TV shows to justify your monthly fee or would a smaller plan be better for you? If you’re paying $9 a month and watching only one movie, maybe you’d be better off going to the movies or renting movies at the public library for free. On the other hand, if you watch a lot of movies, Netflix may be cheaper than cable. You can also suspend your subscription if you expect to be traveling or too busy to watch movies for a few months.
Cell phone plans: Even if you’re under contract, you can usually change to a cheaper plan with the same carrier. If your contract has expired, you’re in a good position to deal. See which company has the best deal for you. If you don’t make a lot of calls or send a lot of texts, getting a prepaid plan and paying for each text might be cheaper than buying a monthly amount of minutes or text messages.
Internet and telephone: Do you really need the fastest high-speed Internet? If you’re not streaming a lot of video, you might be surprised at how well the basic Internet plan will work for you. Can you get a better deal if you switch companies, or threaten to switch? Maybe you can get a better deal if you buy phone, Internet and cable service from the same company. Or are you ready to go without a land line entirely? Another option is to ask for the basic telephone package, without caller ID or any additional services.
What ways have you found to cut back on entertainment and communication expenses? Are we wrong to think cell phones, Internet and television are necessities rather than luxuries?
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