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Budgeting for premium services

Date posted:  9/2/16 09:00:00 AM Budget your premium services

In the last 10 or so years, the way we order services and watch the newest shows on TV has evolved. Gone are the days of paying for cable as the only way to access your favorite premium channels.

The way music is listened to has also drastically changed. Physical album sales have decreased, as have the purchases of individual songs. Instead, music streaming services that charge a monthly fee and provide unlimited, commercial-free listening have taken over.

With so many options, it's important to budget for premium entertainment services so you're still able to afford other necessary expenses. Here are some ways you can find the perfect balance between TV binges and grocery expenses without wrecking your budget.

Cable
Cable still remains a popular option for households even though recent trends indicate a shift toward internet-based entertainment, as a late 2015 survey from Pew Research Center showed.

But cable packages are still an option for many households, particularly those with families, as The New York Times noted. Notably, parents are looking for engaging programming for their children, which often leads them to cable. And, if you're a big sports fan, cable is your lifeline to ensure you can follow your team(s) throughout the year.

Similarly, some channels are only available with a cable subscription. So for some households, it makes sense to have a cable subscription so all members of the family can stay on top of their favorite shows. According to NBC News, the average cable bill, as of 2015, is $99 a month. Since many companies also offer Internet as part of a cable bundle, costs are likely higher than that average, but will vary depending on location and service provider.

Premium services currently available
It's easy to get caught up in the excitement of buying services à la carte, but if you aren't careful, the prices will start to make a dent in your wallet. Currently, a handful of video streaming services are available for you to enjoy: Netflix, Hulu, HBO Now, Showtime and CBS, to name a few. Remember, some shows and movies are exclusive to one platform. Take this into consideration when deciding which services to subscribe to.

Multiple music streaming services are also available for your enjoyment, but luckily, you will only need one since each option typically offers the same amount of music. However, some of the options do have exclusivity deals with artists that limit their music to only one platform for a certain period of time. To ensure you have all the music you crave without restrictions, you'll want to look into the pros and cons of each streaming service before committing to one. A majority of music streaming services cost about $10 a month.

Another music service for you to consider is SiriusXM. If you find yourself constantly in the car for long periods of time, satellite radio can help make the trip easier by letting you explore hundreds of music and talk show stations. Monthly subscription prices range from $11 to $20.

Cost breakdown
Before you start subscribing to video and music services, you will need to perform a detailed cost breakdown to see where your money is going and how much you're spending on entertainment. Most video services will cost about $10 a month, and if you were to get all five, that would cost you a little more than $50, factoring in taxes and other fees.

Assuming you subscribe to only one music streaming service and SiriusXM's $15 package, that monthly cost grows. Here is what you may spend every month on entertainment:

  • Cable and Internet: $99
  • Video: $50
  • Music: $10
  • SiriusXM: $15
  • Total: $174

That total might be too expensive for you and can cut into other areas in your budget.

Picking what you need
It's unrealistic to expect to subscribe to every premium service possible. At the very least, you will need Internet and potentially cable. From there, see what premium subscriptions you're more inclined to enjoy and use on a consistent basis by researching their limitations and features.

You may even consider alternating services. For example, you can subscribe to Netflix during the months it offers several programs you want to watch. Once you've completed those shows, you can cancel it and pay for another platform that may offer other kinds of exclusives and programs.

Premium services, such as cable and video streaming platforms, can eat up a big part of your monthly budget. Instead of spending close to $200 on everything, cut costs by being selective and put the money you save toward other important needs, such as necessary expenses or a savings account.