Switching to Streaming Services With Ads Could Save You Over $500 a Year

If you're looking for one easy move you can make to boost your emergency savings in 2024, you might want to look at your monthly spending on streaming services. In the past few years of cord-cutting and binge-watching, it's been easy for a lot of Americans to lose track of just how much they're spending on Netflix, Disney+ and other streaming subscriptions. The costs of streaming have gone up, and you might be surprised at how much you can save by making one big change.

That's right: you can save significant money by watching ads. No one loves TV commercials, unless it's a commercial from our favorite car insurance ad mascots. But the truth is, if your savings account balance isn't what you want it to be, signing up for ad-supported streaming services can save you a bundle of money.

Let's see how much you can save in 2024 by switching to streaming with ads, and why it's a smart move for your personal finances.

How much you can save with ad-supported streaming

In the past few years of the streaming wars, as high inflation has put pressure on household budgets, some streaming services have started to offer lower-priced options where customers can choose to see ads as part of their viewing experience. These are called ad-supported subscriptions, instead of the usual (higher-priced) ad-free plans.

Choosing ads as part of your streaming service can help you save money on your monthly bills. Your viewing experience might be less "premium" than it was before, but you'll have more money in your bank account.

Here's how much you can save on each of these four major streaming services by switching from the highest-priced ad-free plan to a lower-cost plan with ads:

If you have all four of these streaming services and you switch to the ad-free option for all of them, you'll save about $42 per month, or a total of $504 in a year. You don't have to cancel your favorite subscriptions, you just need to choose a lower-priced plan -- and the savings can be significant. What could you do with an extra $504 in the bank?

How to use $504 for your personal finances

Let's say that you go through an entire year of watching ads on streaming services. You've diligently saved the extra money each month with automated transfers to a high-yield savings account. And now you have $504 of extra savings. How could you use this money to make a difference for your personal finances? Here are a few ideas.

Replenish your emergency savings fund

During the past few years of high inflation, many Americans depleted their savings. As of July 2023, according to The Ascent's research, the typical American had a savings account balance of $1,200. If you don't have three to six months of living expenses stashed in a high-yield savings account, that extra "ad-free" money could be used to replenish your savings.

Save more money for retirement

If your emergency fund is in decent shape, you might want to use this extra $504 to make additional contributions to your retirement savings. You can put up to $6,500 into a traditional IRA for 2023 (until April 15, 2024) and save money on 2023 taxes. If you're in the 22% tax bracket, putting that extra $504 into a tax deductible IRA would save you about $111 on taxes. Isn't that amazing? You can save money on streaming services and also owe less money to the IRS.

Plan for your next vacation

Sometimes when you get an extra lump sum of savings or "found money," it can feel really good to just go spend it on something fun. If you have a healthy emergency savings fund and your retirement savings goals are on track, you might want to live a little and spend that extra $504 on your next vacation.

To get more mileage out of your extra $504 of streaming savings, you might want to consider applying for a travel rewards credit card. Some of the best airline credit cards and other rewards cards have generous welcome offers that give you thousands of bonus points or frequent flyer miles that can quickly help you earn free plane tickets and other travel perks.

For example, the Chase Sapphire Preferred® Card has a welcome offer of 75,000 bonus points when you spend $4,000 within the first 3 months of opening your account. Those bonus points are worth $750 of travel purchases if redeemed through the Chase Ultimate Rewards portal.

Bottom line: No matter how much you love watching Netflix and Disney+, you might feel even better by signing up for an ad-supported streaming plan. Switching to ads with four popular streaming services can save you $504 per year. Isn't it worth sitting through a few ads to replenish your savings account, boost your retirement contributions, or take a fun vacation with reward points? Making one little change to your streaming subscriptions is an underrated opportunity to save money in 2024.