How to spend $350 a month on your cable bill: A Case Study

0
178
views

A monthly cable bill of $350 isn’t likely to put my physician readers into financial peril, but just because you can “afford” splurging on a big cable bill doesn’t mean that you should. What might otherwise be an annual expenditure of $4200 for tube entertainment will often balloon up over time as cable/satellite companies wean you off their “introductory rates”. Add in compound interest and you will be hurting years down the line.

As part of the obligatory family gatherings over the holidays, we all hear both the good and the bad  among family and friends. Somewhere between discussing family vacations and work frustrations, the story about spending obscene amounts of money on cable bills came up.  Apparently a coworker of one of my distant relatives was spending about $350 a month on cable bills alone.  I know plenty of physicians whose internet, phone, and cable bills hit that amount, but the thought of blowing a serious chunk of change on this really caused my gut to twinge when I heard it. It’s that sensation where your parasympathetic system gets altered, and you wonder which one of the IBS symptoms you’re going to experience next.

The gut-wrenching blow wasn’t the cost itself, but rather that the couch potato had a job that did not exceed an annual pretax salary of $50,000. Most people salaried at $50,000 on a W2 are probably going to pay somewhere between 10-14% of federal tax plus a few thousand on state taxes if applicable. A monthly cable bill of $350 would roughly consume 10% of one’s post-tax income!

We all have different priorities, but initially I couldn’t convince myself that it was possible to rack up a huge cable bill.  I decided to embark on a cable shopping spree on my local cable carrier to figure out what it really took to generate a hefty bill.

The marketing folks really have the process down. It seemed that the bonus options were all free:

Tricky Tricky. The discounts look like great deals.

However, the pricing is deceptive. There are fluctuating fees during the first year with variable discounts that wear off after the introductory period:

You pay more, then less, the more?

I was able to rack up a monthly bill of around $400. The bulk of the optional fees, it turns out, come from the equipment rental fees, set boxes for extra television sets, and recording capabilities. One would think that no one should ever need that many channels of passive entertainment but clearly these companies are still in business. I would be inclined to quit my job just so that I’d have enough time to consume what I’ve already paid for.

I polled some of my coworkers, and the majority of them actually do subscribe to satellite or cable television. Some of the more budget-minded doctors at the hospital subscribe to a handful of streaming services to help entertain the kids during road trips (great idea). But I’d say that all of them don’t really have much free time to consume their television subscriptions anyway. Perhaps I’m the outlier, since I axed my satellite subscriptions several years ago?

How much do you pay monthly for cable/satellite subscriptions?

View Results

Loading ... Loading ...
Do you want to get the latest Smart Money MD posts in you inbox?
Get the FREE Smart Money MD Financial Cheatsheet for signing up!