Crackerjack Greenback Prudent Advice for a Prosperous Future

December 5, 2008

Cable/Satellite TV Subscriptions Actually Cost Nearly $64,000!

Filed under: Budgeting,Consumerism,Contentment,Frugality,Saving Money,Spending,The Basics — Paul Williams @ Crackerjack Greenback @ 4:00 am

       Think it sounds ridiculous? Bear with me and I’ll explain how I came up with that number. This obviously isn’t the exact cost for every single person, but it probably isn’t far off. I didn’t include the cost of electricity, purchasing and replacing your television, or the cost of lost opportunities due to the hours wasted watching television. I’m also basing the cost on the amount I pay for satellite TV. Your actual costs may be higher or lower.

The Assumptions

       I assumed a cost of $40/month for the subscription. This is the cost of my basic satellite TV subscription. There’s a good chance most people pay more than this, so my estimate is probably conservative.

       I assumed you started your subscription at age 22 (when most people are out on their own) and you keep it until you die at age 80.

       I assumed an inflation rate of 3.8% and an investment rate of return of 8% (very reasonable over a 59 year time period).

The Results

Television by dailyinvention on Flickr       If you decide to give up your cable or satellite TV subscription and instead invest the money, you’d have over $577,000 at age 80. If we adjust for inflation, that $577,000 would be about $63,900 in today’s dollars (e.g., what costs you $63,900 today will cost you $577,000 in 59 years because of inflation).

       By age 65, you’d have an extra $177,700 because you gave up that cable/satellite TV subscription. This is the same as $34,300 in today’s dollars. That could mean retiring a year earlier! (depending on your income needs in retirement)

What About the Cost of Purchasing a TV?

       If you’re 22 and you decide to save $100 instead of purchasing a TV set, you’ll have an extra $2,955 by age 65—or $570 in today’s dollars. (While the price tag says $100, it’s really costing you $570 because you could have invested that $100.)

       If you save $500, that’s an extra $14,780 by age 65—over $2,850 in today’s dollars.

       If you save $1,000, you’ll have an extra $29,550 by age 65—more than $5,725 in today’s dollars! (That $1,000 big screen TV is really costing you $5,725.)

       And we haven’t even figured in the cost of lost opportunities because you watched so many episodes of Lost…

The $64,000 Question

       If Dish Network, DirectTV, or Comcast told you that subscribing to their service would really cost you $64,000, would you do it? Even with the first month free, I just don’t see how it’s worth it. 😉

       Add in the cost of purchasing a TV (and replacement TVs), the higher medical bills because you sat on your butt so much, and the other reasons you should stop watching TV and you’ll soon find that it’s just not worth it.

TV;        If you’re struggling to get by, TV should be one of the first things you cut. It’s a drain on your finances (a $64,000 drain!), wastes your time, and can get in the way of quality family time. Your time is better spent finding ways to increase your income, cut your expenses, and enjoy your life the way you want (instead of the way the TV tells you to enjoy it).

Disclaimer and Other Stuff

       Even though I know how much television costs, I have not given it up completely. However, I do watch a lot less than I used to and I’m amazed at how much more I can accomplish! Now I tend to only watch a couple shows on Discovery Channel. (I’m a science geek at heart.) I’ll watch in social situations as well, but overall I probably watch less than a couple hours a week on average.

       Not all TV is bad. Like I said, I like to watch Discovery Channel. Educational shows can be a good way to get some entertainment while expanding your mind at the same time. But most TV shows are an absolute waste of time—end of story.

November 24, 2008

A Meaningful Christmas

Filed under: Consumerism,Contentment,Frugality,Giving,Saving Money,Spending,Values — Paul Williams @ Crackerjack Greenback @ 4:00 am

       What if Christmas meant more than shopping in packed malls?

       What if you spent more time with your family than you spent trying to pick out gifts?

       What if you could wake up on December 26th with no debts from the day before?

       What if you could throw out all the stress, traffic, and shopping and just focus on worshiping Jesus, giving to the needy, and loving all people?

       What if we gave up Consumermas and went back to Christmas?

       The folks at Advent Conspiracy have a great little video (2 minutes and 39 seconds) about a meaningful Christmas.

       So why not make Christmas meaningful again? Why not do it this year? If you want to change how you celebrate Christmas, here are some good resources:

              Buy Nothing Christmas
              Alternative Christmas Gifts
              A Do-It-Yourself Christmas

       Finally, here’s “O, for a Thousand Tongues to Sing” as sung by the David Crowder Band. I hope it reminds us why we’re celebrating Christmas in the first place.

November 10, 2008

New Cars or Retirement?

Filed under: Consumerism,Contentment,Frugality,Retirement Planning,Saving Money,Spending,The Basics,Values — Paul Williams @ Crackerjack Greenback @ 4:00 am

       Bob at Christian Personal Finance has a great post about how cars affect your financial freedom. Definitely check out his post. He estimates that eliminating a $400/month car payment could mean $1,000,000 more by the time you retire. Even a $200/month payment could mean an additional $600,000 over 40 years. Granted that’s not adjusted for inflation, but it could easily mean the difference between retiring and having to work a few more years for many people. It’s just another great reason you shouldn’t buy into consumerism. There’s nothing wrong with buying a used car, and it could save you a lot of money in the long run.

New Car

OR

One Million Dollars

?

Your Choice!

       Be sure to check out this week’s Carnival of Personal Finance hosted at The Digerati Life! It’s a very interesting theme this week!

October 30, 2008

You Don’t Need Things to Feel Rich

Filed under: Consumerism,Contentment,Values — Paul Williams @ Crackerjack Greenback @ 3:33 pm

Family Time by Joe Thorn on Flickr       Stop Buying Crap has a great post on 10 Simple Ways to Feel Rich Without Materialistic Means. You’ll notice that none of them require you to buy some fancy new Stuff to have fun and feel wealthy.

       Numbers 1 and 8 are some great ways to spend time with family. Having strong family relationships is good for your health and can increase your life expectancy. I also like numbers 7 and 10 because they remind us to appreciate the oft-ignored beauty all around us.

       The things that make us feel truly wealthy often have nothing to do with our Stuff or bank accounts. What are some non-materialistic things that make you feel wealthy?

October 29, 2008

Corporate America Wants Your Soul

Filed under: Consumerism,Contentment,Spending,The Basics — Paul Williams @ Crackerjack Greenback @ 5:00 pm

       This video on YouTube titled “Please Buy More Stuff” portrays American consumerism and the message that corporations bombard us with every day through the media and advertisements. The underlying message is that buying or doing these Things will make you happy, make you feel whole, or otherwise give you a better life than you currently have.

       Here’s the secret though…none of it is true! Buying more Stuff, having more Things, or being richer than your neighbor is not really going to make you happy or fulfilled. Most of us already have more than we’ll ever need but we still can’t seem to be happy. So we start to believe the message coming from Corporate America that if we buy more Stuff and become wealthier then we can have the “Good Life” and be much happier.

       Why do we think this Stuff will make us happy? What’s the purpose of it all? You can’t take it with you when you die, and it’s highly unlikely that any of it is going to make your life longer. Wealth and material Things just aren’t going to matter when you’re dead. You’re giving up time (to earn money) that you could have spent with family and friends, pursuing your passions, or enjoying your hobbies just to buy more things. Many of us start spending money we don’t even have to get more of this stuff, and then we get trapped in an endless cycle of earning money to pay off debt while we keep buying even more stuff.

       So why do you need it? Why do you need the things you’re being told you need? The truth is you probably don’t. You can break free from this endless cycle of consumerism. Do you want to know the secret to escaping the rat race?

       It’s called contentment. It’s not easy, especially in America, but it is so amazingly freeing. You’ve probably got food, clothes, shelter, and so much more. We take these things for granted, but what else do we really need? A new iPhone? A shiny new car? A bigger house? Once you realize how truly wealthy you are then you can begin to recognize that you don’t need more stuff to actually be happy. (Granted, if you are living in poverty then a little more money can make a big difference, but beyond that money can’t make you happy.)

       Stop and ask yourself right now – What really makes me happy in life? Then start figuring out how you can get more of that. Most of the time the things that really make us happy in life are our relationships with family and friends, our passions, or having a purpose – not the Stuff we are told to buy on TV.

       The truth is being happy with what you have and resisting the messages from Corporate America will bring you far more happiness than a big raise, huge investment gains, or more Stuff. We need to wake up from the consumeristic American Dream and grab hold of the life which is truly life!

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