For many, the cost of cable and Internet have spiraled out of control.
In 2011, the average subscription for basic cable service and premium-TV channels in the U.S. reached $86 a month, according to NPD Group. The research company forecast that those rates would reach $123 each month this year and $200 by 2020. Add in the $60-$65 average monthly price Americans paid for broadband access, according to research from Point Topic done in early 2014, and people are already spending nearly $200 each month.
This has led some to cut the cord and drop the pay television side of their subscription. But Netflix, Hulu, Amazon Prime Instant Video, and other digital services require broadband Internet access so it's not possible to simply drop Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), Cablevision (NYSE:CVC), or whichever company provides your Internet/cable service.
While it may not be possible to completely divorce your ISP and cable company, it is possible to save money without cutting the cord.
Buy your modem
Most broadband customers rent the modem that allows them to access their broadband Internet connection from their ISP. This can cost roughly $6-$10 a month. For example, Time Warner Cable recently raised its rental fee from $5.99 to $8 and Comcast increased its fee from $8 to $10.
Those are hefty increases, but you don't have to pay them. All the major cable companies allow you to buy a modem instead of renting it. Most don't make this option known, but you can do it and the savings are substantial. Comcast, for example, offers a list of approved devices here. You can buy one of them, the ARRIS / Motorola SurfBoard SB6121 DOCSIS 3.0 Cable Modem from Amazon for $69.99.
If you assume a three year life for the modem (and there is no reason it should not last longer) you will pay it off in seven months and save $290 over the next 29 months. The savings vary depending upon the rental price you would have paid and the modem you choose to buy, but the numbers pile up quickly in your favor.
Don't pay for speed you don't need
Picking a broadband package can be tricky and many people opt for more than they need. I almost fell victim to this a few days ago when my cable company, Cox, sent me an email offering faster Internet for $5 a month for six months (with the price rising after that). I almost jumped before taking stock and realizing that my current package allows me to stream movies and play games without any problems.
Faster may be better, but at some point, your connection is fast enough for what you do. Time Warner Cable actually offers a handy speed checker which allows you to test your current speeds no matter which provider you use.
Consider your options
The people who pay the best prices for cable and Internet tend to be the ones on promotional deals. While switching can be a hassle involving multiple phone calls and appointments, it's often a way to cut your bill. In some cases, just the possibility of switching (and threatening to leave) can get your existing carrier to lower your pricing or at least offer to sweeten your deal (perhaps by throwing in a free premium channel like HBO or Showtime).
Before you switch to save some short-term dollars, however, you need to work out the long-term costs. If jumping to a new carrier at a great promotional price requires a two-year commitment, but only offers the deal rate for a year, then you must look at the total two-year cost. It's also important to find out what fees you will pay on top of the promotional rate as most cable companies are charging extra fees for broadcast networks and, in some cases, sports packages.
It's very important to do the math when considering a switch. Most cable/ISP packages include a discount for bundling multiple services together. If you drop cable and switch to satellite (or just drop it altogether) you need to factor in the price of any lost discounts.
Still, in most cases, being willing to move (and sometimes moving) should earn you a better deal.
It's about diligence
It's possible to spend less money on cable and Internet without cutting the cord, but it can be exhausting. It's a challenge to keep this bill -- which seems to creep steadily higher each year -- in check, but it can be done.
You need to be diligent and not let the ease of automated bill pay lull you into overpaying. Check your statements, look for better deals, and if a charge seems questionable or negotiable, ask your provider.
Cable companies and ISPs won't go out of their way to lower your bill or let you know about services you are paying for but not using. You have to do the work yourself, but if you do, your bank account will be at least a little bit fatter.
Daniel Kline has no position in any stocks mentioned. He probably pays more for cable than he should. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.