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It doesn’t always pay to keep cable TV service. Read on to see if it’s time for you to cancel. [[{“value”:”
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An estimated 72.2 million people have cable, says Allconnect. That might sound like a big number, but it’s actually down from 98.7 million in 2016.
Given that there are many low-cost alternatives to cable, like streaming services, it’s getting harder to make the case for spending all of that money. Cable subscribers typically pay anywhere from $20 to $145 a month, whereas some streaming services — namely, Netflix with ads — start at just $6.99 a month.
So if you’ve taken to watching streaming content more so than cable, then cutting the cord is an easy call. But here are three other reasons to consider saying goodbye to cable as soon as possible.
1. You have absolutely no savings
Last year, SecureSave reported that 63% of Americans could not cover an unplanned $500 expense. If you have less than $500 in your savings account, or, worse yet, $0 in savings, then you should not only cancel cable, but immediately hit pause on other non-essential expenses until you have at least a little money in the bank.
If you don’t have any money on hand for emergency expenses, you risk being forced into expensive debt the moment your next surprise bill arrives. So if your savings situation is dire, cancel cable for now. You can sign up again once your bank account balance is looking a bit better.
2. You have debt you desperately want to pay off
We just discussed the fact that not having emergency savings could immediately lead to debt. But if you’re in debt already, then it’s best to cancel cable so you can use that money to pay it off.
Every single day you carry a credit card balance is a day you rack up more interest on it. And even a seemingly small balance can cost you a lot over time.
In fact, say you owe just $500 on a credit card with a 20% APR. If it takes you 12 months to pay it off, you’ll lose $56 to interest.
And if you’re thinking that’s not a lot of money, consider that it’s about one-tenth of your starting balance. Also, if you can’t pay a $500 credit card bill by tapping your savings, it means you probably don’t have a lot of savings — and therefore can’t afford to lose an extra $56 to interest.
3. You’re about to start working a side hustle that’ll keep you busy
If you’re doing fine financially and don’t have credit card debt, there’s nothing wrong with paying for extras like cable — even if it’s only something you watch on occasion. But if you’re gearing up to start a side hustle that’s likely to keep you very busy in the coming months, then it could make sense to cancel that service.
If you’ll be working most nights and weekends, how much TV are you going to have time to watch? You might as well shed the expense and free up the room in your budget.
Now if your side hustle is temporary (say, you’re aiming to work it for the rest of the year to save for a specific goal), one thing you can do is cancel cable now, replace it with a cheaper streaming service, and then sign up again once your side gig is over. If you let at least six months lapse on your cable service, you may be eligible for a new customer discount or promotion when you sign up again.
If you’ve had cable for years, it can be hard to cut the cord. But that’s the absolute right move if any of these situations applies to you.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.
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