June 14, 2012

Mr. Frugality: Why Paying to Bundle Phone and Internet is Bunk

As I flew my kite yesterday on a wonderful beach, I reminisced to a recent time where I spent time with my buddy and his girlfriend. They do not pay for "featured" land line phones or cable. In fact, there is a new "thing" out there now that I think will grow huge in five to ten years, giving major cable a run for its money.

I will work with arbitrary, but proportional, numbers. Say it costs $50 a month for 900 plus channels. Say it costs $30 a month for high speed internet at 25Mbps. Then say you are paying $30 a month to keep your landline open. My father does this, and bundles everything from $110 a month down to around $70-$80 or so. But let's look at what is actually being paid for, in addition to $50 a month for internet access and a two year cell phone contract costing $30 a month (so, $200 a month for all of this).

Internet
You can't really skimp out here. I would hook up with a major internet provider, and not a discount one, for internet usage. I know I know- some of the companies want to censor you, the content you see and throttle your downloads- but if anyone can find a better deal, let me know.

Cable
Here is where you can gut the cow and save some money. Say the cable bill is $50 a month for comcast. Internet services, such as Hulu and Netflix offer premium services, some without commercials, some with limited and relevant ads, for a combined total of $20 a month for Hulu and Netflix. Stream movies through the computer or game console. The big one being the game console- my buddy streams these services through his console- and when I saw what was available, I began seriously debating on ditching cable. House, other "good" dramas, anime, and a lot more.

Stuff should work on my schedule, and not me for the TV schedule. Being frugal, and one that does not like advertisements, especially when cable REPEATS THE SAME ONES ALL THE TIME, SOMETIMES THREE TIMES IN A ROW- I would seriously consider paying for Netflix and Hulu. As for the parents? well they are set in their ways, and in a few years they will come to talk to me about these internet services, and like GPS and smart phones, I will tell them "you are about 5-8 years late on that one".

As for sports, well, I don't know if there are any offered packages for that stuff outside of major cable networks.

Phone
It is a good idea to keep a local land line afloat. Until someone debunks me on this, then I plan on having a basic phone line for 911 emergencies. If you have a smartphone, which I don't, you may be paying for internet access on that phone as well. My needs are such that I do not need mobile internet, and being a fad, I see no reason to shell out $40-$50 a month extra for these services. As for apps to the phone, off of the internet? yeah I can see upgrading to a smart phone for those purposes. Slowly, our phones are becoming MP3 players.

The Savings
If you switch to netflix and hulu, you are paying $20 a month. Add in a cell phone contract at $30 a month in addition to high speed internet at $30 a month, you are paying a grand total of $80 a month versus the "old ways" $200 a month. Can you justify the savings, $1440 a month, for cutting "premium" TV, which shows 5-6 minutes of non-relevant commercials, has nothing on, and a data plan you don't need because roaming/smartphone internet access is a fad? then you can save some serious cash... and even smarter... invest it somehow.

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