For years now, personal finance experts have been recommending cutting the cord on cable and using streaming services as a way to save money. According to a recent study from bill pay service doxo, which uses payment data from more than 7 million consumers across 97% of U.S. zip codes, people are listening.
Although consumer spending has gone up by 6% year-over-year — largely due to inflation — cable and internet bills have dropped. The average U.S household spends $1,122 per year on cable and internet (down from $1,141 last year) as consumers shift their spending to over-the-top (OTT) and/or streaming services, the report showed.
“With this category remaining relatively stable amidst national inflation, our data suggests that consumers are reallocating funds to OTT and streaming services,” said Jim Kreyenhagen, VP of marketing and consumer services at doxo.
In an exclusive email interview, he told GOBankingRates: “Consumer consumption of streaming content has never been higher, thanks in large part to the over-the-top (OTT) platforms and content providing more choice and increased consumer appetite and consumption.”
U.S. households that pay for cable and internet face an average bill of $114 per month. In total, Americans spend $146 billion annually on cable and internet. But that’s just 2% of consumers’ household bills, indicating there may be better ways to save money by evaluating other household expenses.
For instance, doxo data shows that Americans pay a total of $853 billion annually toward mortgages, $616 billion toward rent, $493 billion on auto loans, $399 billion on utilities, and $250 billion on their auto insurance. Mobile phone subscriptions account for $166 billion annually.
GOBankingRates spoke to finance experts for tips on how to save money in these areas. And yes, those streaming services could be on the chopping block if you’re looking to tighten your purse strings.
Consider Refinancing Your Mortgage
One of the big-ticket items on the doxo list for many families is mortgage payments. Even though interest rates have risen in recent months, you may still save money by refinancing.
“Just like when looking for a purchase loan on a home, those looking to refinance should evaluate options from a range of lenders and mortgage providers and do their research to ensure that a refinancing makes sense for them,” says Robert Heck, VP of mortgage at online mortgage marketplace Morty.
He pointed out that Morty’s online rates tool helps give homebuyers and homeowners access to a wide range of financing options and the most competitive rates. “Rather than manually having to reach out and speak to different lenders, consumers can personalize and compare options and view rates in real time. This reduces the time and energy of shopping around while providing the same competitive edge,” he said.
If a re-fi doesn’t make sense because you purchased your home when rates were historically low, you might consider a cash-out re-fi — and use the money you’ve pulled from the equity in your home to consolidate higher interest debt, especially since credit card rates are continuing to rise.
Reduce Your Car and Home Insurance Rates
Home and auto insurance also provide opportunities to save money. Steve Lekas — CEO and co-founder of insurance company Branch — told GOBankingRates that, on average, customers can save 16% by bundling their home and auto insurance policies. “The reason insurance companies are able to offer great discounts for bundling is simple: bundled customers have lower claims costs,” Lekas said. “Not to mention, it’s easier for them to service one customer with two policies than two customers with one each.”
When you’re shopping around for new insurance policies, you may also ask about other coverage lines that can provide greater peace of mind. “Customers can often personalize their policy with coverages that accurately reflect their way of life through options like: umbrella, valuables, home sharing, ride-sharing insurance, life insurance, and renter’s insurance. The more customers are able to bundle, the more likely they are to save,” Lekas said.
Shop Around for a New Mobile Carrier
Mobile carriers have been offering savings for trading in old devices recently. Often, you can save money by changing your cell phone provider. But before you jump ship, ask your current company if they have a better deal for you.
Whether you make a phone call or walk into a smartphone retailer, you’ll want to have as much knowledge as you can to negotiate. “In general, the best way for consumers to understand whether or not they are getting the best deal is to know how much they should or could be paying for their bills,” Kreyenhagen said.
doxoINSIGHTS provides a database of national and regional averages across the most common household bill pay categories, including mobile phone bills. You’ll find detailed infographics for 50 states (and more than 4,000 cities and towns), Kreyenhagen explained. “If consumers are armed with hard data about how much their neighbors are paying, they will be much better equipped to negotiate, whether it is through using a bill negotiation tool or reaching out to engage with their providers directly.”
Control Your Utility Spend
Some of the highest annual bill increases were within the utilities category, Kreyenhagen pointed out. Heating oil and propane costs rose by 28%, natural gas rose by 11%, and electricity rose by 5%, based on recent doxo data.
However, consumers can control some of these costs by changing their behavior in small ways — or by making minor upgrades to their home. “While most bills require consumers to negotiate or shop around for a better deal, utility bills can be decreased by making living adjustments at home to reduce energy use,” Kreyenhagen said. “For example, consumers can install home features to improve insulation or can install smart power strips or energy-efficient bulbs to reduce energy costs. Smart devices should also be considered to help monitor and reduce usage, and ultimately save money.”
Spend Cord-Cutting Savings Wisely
Although doxo doesn’t collect data on streaming service and OTT spends, Kreyenhagen said that Americans are making these services an increasingly large part of their household budgets. “As the availability of OTT platforms continues to explode, consumers continue to opt for streaming services to consume content, with 93% of consumers planning to increase their streaming options (or make no changes to their existing plans),” he said.
But just because you’re saving on cable and internet doesn’t mean you should go out and double your household spending on other media consumption — or anything else, for that matter.
“If you recently cut cable spending, it’s a smart decision to immediately re-allocate those funds for your future, whether it’s to pay down debt or build on your savings, before you mindlessly spend the money somewhere else,” Kreyenhagen said. “If you selected a lower plan or cut the cord entirely, you should try to set aside that same amount of what the full bill would have been for each month. Rather than shifting that money saved to buy new shoes (or whatever your guilty pleasure might be), you can leverage your cost-savings to enhance your overall financial health long-term or by using reallocated funds to help pay off other categories of bills that have increased.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Cable Bills Are Going Down — 5 Better Ways to Save Money After You’ve Cut the Cord