Welcome to the Foolish Money Lab, where a Fool dons her jester's hat and puts common personal-finance advice to the test. This month, I cancel the cable.
When personal-finance columnists offer ideas for cutting household expenses, they often start with the stoic recommendation to get rid of all your fun -- cancel your movie subscriptions, satellite radio, cable TV, music downloads, and broadband hookup. The thought of trying to entertain yourself playing pinochle every evening may be enough to make you reject the entire idea.
But that advice isn't meant to drain every ounce of fun out of your life. Rather, it should get you to take a second look at entertainment costs that seem small but add up fast. One fellow Fool called them the monthlies: the services that drain thousands of dollars from your checkbook each year in "low monthly payments." They may not seem like much, but companies like satellite provider DirecTV (NYSE: DTV ) , movie lifeline Netflix (Nasdaq: NFLX ) , and XM Satellite Radio (Nasdaq: XMSR ) rely on them in order to survive and profit.
With that in mind, I looked at our household entertainment spending to see if we had a case of the "monthlies" that needed curing. At the top of the list of entertainment-expenses-not-worth-the-money was satellite service. We're not daily TV watchers, so it seemed an extravagance to spend almost $50 each month on hundreds of channels just to complain that there's nothing to watch. That added up to nearly $600 each year.
Our Netflix subscription seemed another obvious place to trim some spending, by either canceling or downsizing our plan. This pained me a little. We're relatively new subscribers, and I'm still reveling in their no-late-fees policy.
It crossed my mind for a fleeting second, but I didn't consider canceling satellite radio. I'm addicted. Like an Egyptian pharaoh buried with his food vessels and cats, I'll go to my grave clutching the radio receiver.
DirecTV and Netflix make it easy to see whether you can do without by letting subscribers suspend services without canceling. You can test the waters without having to overcome the inertia of returning equipment or mourning the permanent loss of having The Sopranos delivered directly to your mailbox.
Unfortunately, it also means these services will restart themselves -- and erase any potential savings -- if you don't follow the rules. For me, DirecTV was suspended successfully. Netflix movies were not, because I failed to return the borrowed disks in time. Without TV, we watched more movies than usual, so Netflix stayed.
Canceling television was less painful than I expected. I had worried what I would do without the murder mysteries solved by improbable forensic reconstructions of the crime scene. Could I survive without the Discovery Channel and Mike Rowe's Dirty Jobs? (He's so dreamy.) Where would I turn when hit with the obsession to watch Weather Channel storm coverage?
It turned out that much of our TV watching occurred while folding laundry, and that hardly seemed worth almost $50 every month. It seems I can live without murder mysteries, and while I miss him, I can also exist without Mike Rowe. Without television to occupy my few free moments in the evenings, I even -- gasp! -- read a book.
After one month of this experiment, it looks like Netflix will remain in some form, but DirecTV goes. We'll see a permanent savings that should make us almost $600 richer in a year.
The Foolish bottom line
Try this one yourself, and you might be surprised what you can do without. An unexpected side effect was that I felt better about the services we decided to keep, knowing we are getting our money's worth.
Try cutting just one service each month. You'll feel less deprived of your mass-culture fix. At the end of the month, evaluate whether you want it back or you can do without.
Read more to find out: