Give Up Cable and Save
from daveramsey.com on 04 Jun 2010
We Americans just love our entertainment, don't we? We'll spend thousands of dollars a year on ways to fill our time but put nothing aside for our future. People, that's just plain stupid!
One of the biggest wastes of our time is cable TV. Is Dave totally against it and think it's evil? Of course not. But we all need to check our priorities and alter them if cable is near the top of the list!
The True Cost of Premium Cable
"Get our preferred-plus package with movie channels and on-demand service for just $50!" Offers like these are misleading. That premium package actually costs you much more.
You see, that $50 price is for promotion only. A good look at the fine print will tell you that six to 12 months into your subscription—after you've become "hooked"—the cable company will charge you their regular fee. After they tack on equipment rental, taxes, franchise fees, and other "applicable charges," you'll pay about $100 a month. That's $1,200 a year!
Giving Up Cable Saves You Thousands!
What if you devoted the hours you waste in front of the TV to more productive activities like family time, reading or exercising? Do you know how much you would save? If you put that $100 extra per month in a mutual fund averaging 12%, you'd have over $8,000 in just five years! In 10 years, it would be over $23,000!
Is it worth giving up $23,000 to have premium cable? You bet it isn't. Heck, you probably only watch five out of those 100 channels anyway. If you're subscribed to a cable service but aren't out of debt or contributing to your retirement plan, then you need a good thump on the head!
What to Do With the Money You Save
If you have any debt (other than your house), throw the extra money to your debt snowball now. If you're debt free, invest your savings. Put that money in a growth stock mutual fund if you plan to invest more than five years. Be careful when choosing mutual funds; there are a lot of lousy ones out there. Always use a professional financial advisor to help determine which funds are best for you.
Download Dave's free budgeting forms now to really see how much you're spending on cable services and what you can do about it!