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When you save money are you really saving money?

When I was a youngster growing up, we had just one black and white television for the entire family. Back then there were only four channels available, 2, 4, and 7 locally, and 9 out of Canada. Not bad since the television dial only went from 2 through 13.

Then one day my father bought another television that had a second knob and required a special antenna. This television enabled us to watch the new UHF channels, 20, 50 and 56.

The primary reason for getting that particular television was to watch the Red Wings on channel 50. And when the Wings weren’t playing, I remember watching such exciting sports as roller derby and softball.

Of course, television technology has come a long way over the course of my lifetime, and in a somewhat ironic way, television viewing has come full circle.

I say that because in the early days of television, there was no cable. It was all about antennas. The so-called “rabbit ears” that sat atop the TV and the kind that required an occasional climb to the roof.

Now it seems like everybody is talking about cutting the cable cord, and for the first time in many years, going back to being totally wireless. I’m referring, of course, to streaming.

We’re entering an era of competition among the streaming services. Netflix, Disney, HBO and many more are competing for your streaming dollars. As a consumer, the monthly cost of streaming may not sound like very much.

But the streaming companies are pouring millions of dollars into content to entice you to sign up. They’re keenly aware that receiving a few dollars a month from millions of customers adds up to a ton of money.

For example, suppose you sign up for two streaming services with a combined cost of $15 per month. It may not sound like much, but that’s $180 per year.

Now, depending on your tax bracket, you need to earn and pay taxes on about $200 in order to spend $180. Assuming there are no price increases along the way, fourth-grade math tells us you would spend $1,800 on streaming over ten years, and $4,500 over 25 years. Since it’s unlikely there wouldn’t be any price increases, the actual cost would be significantly higher.

I mention this because I think it’s important that you don’t over subscribe to the numerous streaming services out there. If you’re cutting the cord to save, take advantage of the other side of the math equation.

If you can save $20 by moving from cable to streaming, see that you save it. That $20 per month adds up to $240 per year and $6,000 over 25 years. Factor in a hypothetical growth rate of just 2 percent per year, and in 25 years you’d have more than $7,500.

In the world of financial planning, a lot of little decisions carefully thought through can result in a significant amount of money. For many households, saving or spending an additional $15 per month won’t alter their lifestyle.

However, the math proves that these small sums can make a big difference, especially over time. If you save money by streaming, I hope you really save it. If you spend it somewhere else, you haven’t saved a thing.