Inflation has continued to rise dramatically over the last few years, prompting many people to seek new ways to save. Previously, one of the most popular pieces of advice was to cut your cable. If you’re one of the millions of Americans who pay for video streaming services, you probably don’t need cable, too, right? Let’s examine whether cutting cable is still the smartest financial move in 2025.
The State of Viewing in the US
According to the Pew Research Center, 83% of Americans use a streaming service, with Netflix and Amazon Prime Video being the most popular. Conversely, only 36% of Americans report having cable or satellite TV.
Interestingly, cable is most popular among an older demographic. Americans aged 65 or older are the most likely to report subscribing to cable. This makes sense, as they spent more time with cable in their younger years and may not be as tech-savvy to embrace video streaming.
What is Cord-Cutting?
Only 28% of Americans report having both cable and video streaming services. Which means approximately 3 out of 4 Americans are choosing between the two.
Cord-cutting is when a person eliminates traditional television expenses (cable, satellite) for Internet-based alternatives. Americans are cutting the cord with cable in masses. In 2018, 90.3 million households paid for television. By 2026, that number is predicted to be 54.3 million.
There are several reasons for this trend.
First, video streaming platforms like Netflix, Amazon, Disney+, and Apple TV are offering high-quality, popular, and entertaining shows that are not available on cable. Want to know what happened in the latest season of Severance or Bridgerton? Well, you can’t find out on cable.
Second, cable isn’t the best financial decision for most people. The problem with cable is that it can be tempting to add on to the basic cable package. And after springing for sports, HBO, and other add-ons, the average American ends up spending over $200 a month on cable.
In comparison, a single video streaming service is a lot more affordable, costing between $7.99 and $24.99 per month.
In one survey of cord-cutters, 86.7% of respondents said their primary reason for cutting cable was due to cost.
Is Cutting Cable Good For Your Budget in 2025?
Those who need to tighten their budgets should seriously consider cutting cable, as the average American spends $217 a month, which translates to $2,604 annually.
In comparison, if you opt for Netflix’s most basic plan (Standard with ads at $7.99 per month), you’ll pay $95.88 per year.
You could even splurge and get two video streaming services and still save more than $2,000 annually.
Another critical aspect to consider in the cable vs. streaming service debates is the issue of contracts. Typically, with cable, you’re committing to a one, two, or three-year contract. However, with video streaming services, you’re generally on a monthly contract that can be canceled at any time. If your financial situation changes dramatically, such as experiencing job loss or unexpected medical bills, ending your video streaming to reduce costs will be much easier.
So, is cutting cable right for you this year?
Interestingly, not everyone who cuts cable ends up sticking to their decision. Over one-third of American and Canadian cord-cutters report resubscribing to cable because they were dissatisfied with the entertainment options provided by video streaming.
Here are some questions to ask yourself when considering cutting ties with cable:
- Are the savings worth it? Calculate how much you’ll save by switching to video streaming. Don’t forget to consider penalties or fees that may be incurred for ending your cable contract early.
- Will you stick to being cable-free? Paying fees to cut your cable contract early, only to return after two or three months, is not a wise financial decision. Ensure that going cable-free is a long-term decision.
- Will you be satisfied with video streaming entertainment? Ask yourself if you’ll be happy with video streaming entertainment. For example, if you watch a lot of live events on cable, you may not be pleased with options like Netflix and Disney, which typically don’t offer this option.
- Is reducing your cable bill an option? If you want to keep your cable, consider calling your provider and exploring options to make your package more affordable. Alternatively, evaluate if switching to a new cable provider is cheaper.
- Are you paying for both cable and video streaming? If you’re paying for both services, consider whether it’s worth it. It’s likely best for your budget to choose between one.
Ultimately, if moving away from cable is going to save you hundreds or thousands a year, it’s time to make the switch. That money could be better used for retirement savings, vacations, or paying down debts. Cable is a thing of the past for the average American household, as it has become a costly and unnecessary expense.
You might also be interested in: How Much Should You Really Spend on Rent or a Mortgage?
