How Much Does Watching TV Really Cost You?

by John Kiernan on June 6, 2011

American RuleTelevision is a big part of most of our lives.  We watch it to relax; we watch it when we’re bored; we watch it live; we watch it recorded; we watch it on our computers, phones, and tablets; in short, we watch it all the time.  In fact, the average American watches over 35 hours of TV a week, according to The Nielsen Company.  Now, television is great; don’t get me wrong.  It can be both entertaining and informative, but it can also cost you—both directly and indirectly.  Television, commercials in particular, directly influence our purchasing habits, and it also represents a significant sunk opportunity cost.  But how much does television consumption really cost us?  And how can we limit the financial impact?

Opportunity Cost

The 292 million Americans with televisions watch roughly 158 hours and 25 minutes of TV per month, according to Nielson’s Q1 2010 Three Screen Report, which measures television consumption on TVs, the Internet and mobile devices.  That’s over 5 hours a day and 2,000 hours each year.  The federal minimum wage, according to the U.S. Department of Labor, is $7.25 per hour.  The average American therefore loses out on at least $14,500 in potential earnings each year simply by watching TV.

With that 14+ K you could buy a brand new 2011 Toyota Yaris or Hyundai Accent.  You could buy 14 round-trip tickets to Europe.  You could pay a year’s rent in a luxury apartment building.  You could pay for the average American adult’s annual gas consumption seven times over.  Or you could just watch TV.

Real Cost

There is also a direct correlation between television and spending.  For every 10 hours of television we watch, we spends $40 more than he would otherwise, according to research presented on syndicated radio host John Tesh’s radio show and website.  The main reason for this direct correlation between television and spending:  the commercials.  Watch enough commercials, and you’ll see something you want.  Or, if not, you’ll at least see enough imagery of people buying things that you’ll naturally want to join in.

However, in light of the more than 2,000 hours of TV Americans watch a year, by doing so you’re costing yourself another $8,000 each year just because you watch television.  Viewed together with the aforementioned opportunity cost, we leave over $22,500 on the table each year just by watching TV.  With that nearly $23,000 you could get a brand new 2011 Volkswagen Jetta or Chevy Cruze.  You could buy 23 round-trip tickets to Europe.  You could pay nearly two years rent in a luxury apartment.  You could pay for the average American’s gas expenses 11 times over.

Conclusion

No one is saying not to watch television.  TV can be a beneficial leisure activity, but when you consider your consumption comprehensively, it’s clear that cutting back a little wouldn’t be the worst thing in the world either. Just think about what watching TV is costs.  You really can do a lot in 2,000 hours and buy a lot with $14,500.  So, once in a while, instead of picking up the remote, try something a little different.  It might even save you some money.

[Disclosure: Some of the links within this article point to CardHub.com, which is owned by the same parent company as Wallet Blog.]

Discussion

christine
Great article. I stopped watching TV altogether about two years ago and now my husband recently did the same. In addition to the time saved for more meaningful activities we are saving the cable bill, thirty bucks per month and now forty bucks savings on our electric bill per month! Almost a thousand a year! It's a 42 inch which uses a lot of juice. Now we just use it for movies now and then. It has been liberating in many ways.
June 20 at 17:38 pm

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