We get subscribed to our cable television and phone services through the local (monster) cable company. Last month (and quite a few months prior) our bill was $115.01 (13% sales tax hurts). Internet isn’t even included and we shell out $1380 a year. This had to stop. We decided we had to cancel cable and find more cost effective solutions.

Enter the great resources over at HowToSaveMoney.ca. I had already used Saving Mentor’s site to research the best rewards credit card available to us and new this site would do us wrong, assuming SM had covered the Internet TV topic. Of course he had covered saving money when you cancel cable and I was set to explore a few more great articles. However, we also get our home phone service via cable but SM has a great guide on MagicJack as well. We were set to convert.

Let’s be clear – while we want to cancel cable we still want access to watching some television programs and maintain our ability to use a home phone. This is where we looked for alternatives. For whatever reason (familiarity?) a lot of people remain brainwashed that they should be paying for television, phone and Internet bills – often totalling $150+ per month. By consistently switching service providers or trying to bundle to get the best deal these folks are spending far too much time and paying far too much money for their “necessary” services.

I can’t consider how the cable companies provide “service” as sustainable business models. This thing called the Internet came out years … decades ago. People use it avidly to stay connected via their phones, making money online or even to avoid Paypal currency exchange and other similar activities.

Our Phone Use Habits

We haven’t yet gotten on the smart phone band wagon meaning we maintain a land line in our home. I rarely use it myself but Mrs. SPF keeps in regular contact with her parents and siblings in Quebec and her uncle in Rhode Island. By “regular” I mean that it makes sense for us to have an unlimited long distance plan which we received through the cable company.

Thing is we’re paying a whopping $58 for the phone line (which comes with a slew of calling features of which we use two: Call Display and Voicemail). $58! You’d think someone with an interest in personal finance wouldn’t allow this to happen, but we did.

If I Cancel Cable What Will I Watch?

The same shows I currently watch! I won’t list them all but suffice to say that I went through the online TV guide and wrote down every show I watch and the network(s) that serve up those shows. Lo and behold, I can cancel cable and still get access to these show by watching the television shows online. I suppose that leads to the question: Aside from saving money, why did you cancel cable?

Cutting Back on Television

I watch too much TV. Sure I multi task while I am blogging but I do get distracted from writing or other tasks involved in writing articles. But i’m finding at times I watch TV just for the sake of vegging out. I’m not being overly entertained and certainly not education, let alone productive. I decided I need to cut back on how much television I watch. When I cancel cable I no longer can simply grab the remote and get an immediate fix.

No Regular Television for our Kids

But what about the children!?!?! We’re going to save their young forming brains and severely limit their television watching. When Mrs. SPF and I were kids (we’re 9 years apart in age) television was a treat. We might get 30-60 minutes a day – if any at all. I remember our 12″ black and white TV and no cable for the first 10 years of my life. Whatever did we do? I went outside to play – rain, snow or shine. I played with other kids. I played with toys that forced me to use my imagination instead of having a box force feed me ideas. I didn’t turn out so bad – i’m sure our kids will be OK.

The Technology Needed to Cancel Cable

Surprisingly, not much. I have an EnergyStar laptop. EnergyStar is key as the only way to get the phone via the Internet as the device I use, the MagicJack, needs the computer to be powered up for the device to run via the USB port. However, as I researched this article I learned of another product, MagicJack Plus that plugs directly into your router which removes the need for the laptop to be on at all! Save money AND energy – perfect!

I also bought an energy star 21″ HD compatible LED monitor so I can continue to multi-task while I compute. This was a choice, not a necessity. I went with a monitor as it can be moved around easily enough for when the family watches the odd show or movie.

1 HDMI Cable. We want to have high definition when we watch shows or movies.

Up Front Investment

MagicJack Plus costs $70 for the hardware + first year of service and then $20 per year for the phone service. In addition, being Canadian we get to pay $10 more than Americans do (any wonder why we like cross border shopping?) just because we’re Canadian and need a Canadian phone number. Lastly, if we want to port our current phone number (which we happen to like – and we don’t want to call a zillion companies/people who have this number) there is a one time fee of $20.

MagicJack offers call display and voice mail which we do enjoy using and unlimited North American calling. Mrs. SPF can gab with her relatives (as she did last night in a 90+ minute call with her parents) and we get the features we have come to rely on.

The new monitor/TV cost $140 via a deal from Dell and the HDMI cable cost about $10 which included shipping.

Year one cost after we cancel cable: $230.

A quick call to our Internet provider kept that bill as is, but, we got 80 GB of bandwidth for the same price we had been currently paying (about $53 / month). So this is more or less a wash in terms of our bottom line.

Return on Investment when you Cancel Cable

What is truly ridiculous is that after 2 short months our new hardware was paid for. Over the course of the first 12 months we will save $1150 or a 500% ROI. Ridonkuclous. In year 2 when we pay a whopping $30 for the MagicJack service the investment will have paid for itself 10 times over.

So yes, this is another one of those ‘cancel cable and save money’ posts. However, the numbers are staggering. Given the options available for consumers today I simply can’t see how television companies will persist unless they alter their business models. Customers are becoming much more tech savvy and in this economic climate those same customers are trying to keep as much money as they can in their own pockets.

Would you cancel cable for either the lifestyle or financial benefits?