Can you do without... cable TV?

We're going to pick some low-hanging fruit here.

Cable TV has always been a bit of a luxury. Growing up, my sister and I could sort of tell when things were going well financially and when they weren't, just by whether we had cable.

But with the world of entertainment choices right at our fingertips these days, it's becoming an even more marginal choice.

How much does it really cost?

"There's 70 channels and nothing on!" We've all heard that sentiment expressed at some point.

Paying for TV channels is entertainment. There's nothing wrong with spending money on entertainment. But are you getting the best bang for your buck?

First, consider what percentage of your budget should be going to entertainment. That should come after shelter (rent or mortgage), food, debt repayment, transportation, utilities, and even basic savings. For most families, what's left for entertainment is going be somewhere between 5 and 10% of their budget. How much of that is cable eating up? Would you rather go to an extra movie or two each month? Have a nice meal out?

Can you afford it at all?

Almost half of Americans still live paycheck-to-paycheck. Cutting out cable TV is an oft-cited way of beginning to save.

Take a savings account with an initial balance of $1 and a meager 1% interest rate. Depositing $50 each month into it would yield the following balances at the end of each year:

Year Balance

1 $603.77

2 $1,212.59

3 $1,827.53

4 $2,448.65

5 $3,076.00

A couple years without cable and you're well on your way to basic savings.

What are some alternative?

Cable TV has always been the grab-bag of entertainment. You pay for a lot of stuff you don't want. There's been some movement toward forcing companies to offer channels a-la-carte, but it doesn't seem to be getting anywhere. Why not focus your entertainment dollar a little more on what you truly find entertaining?

1) Free, over-the-air TV

This got a little trickier with the transition to digital broadcasting, but it's still a perfectly legit alternative for people who just want to watch a little TV and keep up on the news.

2) Free, online alternatives

Hulu.com is the most famous. It's a place where you can keep up with most popular TV shows and some interesting blasts from the past. You can watch episodes of currently running shows at your leisure, and you can plow through entire seasons of older shows as you see fit.

3) Paid online subscriptions

For sports fans, giving up cable can be difficult. If you just have to have a broad array of sports on-hand at any time, then maybe giving up cable isn't for you. But if you are a big fan of one sport, there's often a good option online for you. MLB.com and NHL.com each have excellent online subscription services for watching games, and you get a much broader set of choices of what to watch.

4) Mail-based subscriptions

Netflix.com , I must admit, I thought would be a flash-in-the-pan. But it's growing in popularity quickly. It's a subscription service which mails you DVDs from your selections of a broad choice of movies and TV shows. You keep each selection as long as you like, then when you mail it back, they send you another choice from your list. Plans range in price depending on how many DVDs you can have out at a time, as low as $8.99. Subscription also gives you access to their growing "on-demand" service to watch shows and movies via the internet.

5) Go without TV.

Never mind, this is probably crazy talk. I'll move along...

Why you might not want to do without it?

1) You can afford it. If there's plenty of room in the budget and you are saving well, there's no need to give up something you really enjoy.

2) You are under a contract that would involve significant termination fees if you cancelled.

3) TV really is your best and primary source of entertainment. If you just really enjoy watching a lot of television, that's okay too. The best thing about being an adult is you get to prioritize according to what *you* like.

4) If you get it bundled with internet and/or phone service and it's not going to save you money to drop it. Some people get a package deal where it's virtually the same cost, or even more, to have just one of these services as it would be to get two.

As always, it's a personal decision. But it needs to be just that, a decision, and not just a knee-jerk assumption that you have to have cable. Think it out, consider what you can afford and whether it's a strong use of your money.