It all started three years ago when we were given the honor of being selected as a Nielsen family. For just over a week, we did our civic duty and inscribed in our official log book the name, channel, time, and date of each television program we watched. When we powered down our TV on the last day of our preassigned period and made our final notation, the tiny blue “diary” contained a glimpse into our lives. Before returning it to Nielsen, we decided to review it to see if there was anything we could learn about ourselves.

We made the observation that, aside from Little People, Big World (one of our rare reality show guilty pleasures), we had watched nothing on a cable/satellite channel; everything else was on network television. At the time, we were paying DirecTV about $90 each month for access to literally hundreds of channels. As it turned out, the only ones we actually watched were ones we could have been getting for free.

What pushed us over the edge was that we were also in the middle of a customer service battle royale with DirecTV over a botched upgrade to HD (I’ll spare you the details).

In any case, we decided to plan our exit strategy. We broke out the spreadsheets.

What started out as a plan to rid ourselves of one superfluous service quickly became a strategic overhaul of our household services. One thing led to another: we had a bundle discount with Verizon because we had our phone service through them, our DSL Internet service through them, and our television service through their partner, DirecTV. Canceling our DirecTV service would make us ineligible for the discount, in effect raising the rate for our telephone service.

So we decided to get rid of that too.

Canceling our Verizon landline service would impact two other services: our painfully slow 1.5 Mbps DSL Internet service and our ADT alarm monitoring service. When bundled with telephone service, Verizon was giving us DSL for $30per month, but without the landline, that price would shoot up to $45 — way too much for painfully slow Internet service. In addition, ADT requires a landline so that the alarm can contact the dispatch center. ADT was charging us $35 each month for monitoring service.

Here is a breakdown of what we were paying each month:

• DirecTV: $90 for HD television with DVR service for two TVs
• Verizon: $65 for telephone service with unlimited long distance, voicemail, call waiting, and caller ID
• Verizon: $30 for 1.5 Mbps DSL
• ADT: $35 for burglar, fire, and carbon monoxide monitoring

That’s $220 per month total.

We spent a long time researching alternatives for these services and finally came up with a plan that would be high in up-front costs but extremely beneficial in long-term savings.

First, we canceled the DirecTV service and traded $90 per month for the following investment:

• 2 TiVo HD DVRs with Lifetime Service (the TiVo boxes themselves are about $250 when on sale and Lifetime Service is $400 per box)
• 2 amplified antennas (we selected the Terk HDTVa antennas based on Amazon ratings) at about $40 each

TiVo literally invented the concept of television time-shifting, and with the newer models that include dual high-definition tuners, you can record two HD programs while watching a third. TiVo also allows you to stream and download content from the Internet, such as Netflix, Amazon Video on Demand, and YouTube.

TiVo has a number of recurring payment options for DVR service, depending on how long a period you prepay for (i.e., it’s most expensive to pay month-to-month, slightly less expensive per month if you prepay for a year, and even less if you prepay for three years). However, the whole point of the exercise was to eliminate monthly expenses, so we opted for TiVo’s Lifetime Service, which costs approximately the same as four years of service but you never need to pay again.

We selected that antenna after visiting AntennaWeb, a site that takes your street address and tells you what kind of antenna you need to buy and which direction you need to point it in order to receive the broadcasts from each local station. We’re lucky enough to live in an area where we can receive all local stations with a small indoor antenna pointed toward TV Hill.

In total, we spent $1380 on television equipment to save $90 per month — we would recoup our investment in fifteen months.

Next we decided to tackle the telephone landline service. Our only reservation about canceling this one was the risk of not having phone service when the Internet was down. However, we decided that since we both have cell phones, there would be backup options in the event of an emergency.

After reading extremely positive reviews on Amazon, we purchased Ooma – an intriguing device that promises to allow you to use your existing telephone handsets to make calls over the Internet for free. It plugs into your router and into your telephone and converts your legacy phone to VOIP (Voice Over Internet Protocol). The Ooma model we bought costs about $200 and comes with Ooma Core, which serves as the base station, and one Ooma Scout, which allows you to plug one additional handset into the Ooma system and communicates with Ooma Core using your home’s existing internal telephone wiring. We already had a wireless phone system that has one base station and multiple handsets, so we plugged that into the Ooma Core.

We spent $200 on telephone equipment to save $780 per year — we would recoup our investment in just three months!

Next, we focused on our alarm service — essentially collateral damage from canceling our landline. I called ADT and explained the situation. I told them that just like millions of other households, we would no longer have a landline but would like to keep our alarm monitoring service with them. After being transfered around to various departments, I was told that they require a landline and that they had no monitoring-over-Internet option.

So again I turned to the Internet for help. I found that there are several companies that perform alarm monitoring over the Internet — all for much less per month than ADT was charging us. We selected a company called NextAlarm, which allows you to migrate your current alarm system to Internet monitoring by using a device that converts your alarm’s modem signals to packets that can be sent over the Internet. There is an upfront cost of $115 for the hardware that performs this magic, but after that, the savings are enormous (plus, they throw in three months of monitoring for free when you buy the hardware). Like TiVo, you save more per month by prepaying for more time. We opted for the annual option, which works out to less than $12 per month — less than half of what we were paying to ADT for essentially the same service. Installation was simple: unplug the main alarm panel from the phone line and plug it into the adapter; plug the adapter into your router and you’re in business.

We spent $115 on equipment and saved $276 per year, recouping our costs in less than six months.

Finally, as we were then so reliant on the Internet for many of our services, we traded our 1.5 Mbps Verizon DSL at an unbundled rate of $45 for a 16 Mbps Comcast cable modem. I decided to buy the cable modem to avoid a recurring rental fee from Comcast. After reading many reviews and perusing dozens of Internet forums dedicated to the subject, the consensus seemed to be that the Motorola Surfboard 5101 was extremely reliable and fairly inexpensive. I ordered one from Amazon for $55. I was pleased to discover that Comcast would only charge us $45 per month for Internet service — the same amount that Verizon was charging for service that is more than ten times faster.

In this case, the $55 equipment cost is not recouped, but it’s well worth the expense if you consider that the service we received for the same $45 per month is more than ten times better than our DSL service.

We put our plan into action.

The only piece that gave us much trouble was getting our Comcast cable modem service installed. At that time, we did not have cable coming into our house from the pole, and, because of the distance the wire would have to travel through the air across our yard, it turned out to be one of those things that takes dozens of phone calls and visits by a technician to accomplish.

Aside from that, the transition was pretty smooth. Our TiVo service is fantastic and the HD signal that comes in over the air looks much better than cable and satellite HD channels look (those services compress the HD signal to squeeze more channels into a limited amount of bandwidth). The reception is excellent, and we only have trouble if someone inadvertently moves the antenna.

Our Ooma service has been wonderful as well. We successfully ported our Verizon landline number to Ooma and have been basking in free phone service for years now. In the time that we have been using Ooma, we have only experienced two brief outages — not bad for free service.

NextAlarm has done a fine job with our alarm monitoring service. We have had one occasion when a family member accidentally set of the alarm, and the NextAlarm dispatch center responded appropriately. In addition, we can log onto their web site and see all of our system’s activity and its current status — useful for when we are on vacation and suddenly panic that we might not have set the alarm in our rush to get out the door.

Month 10 was our break-even month. We had spent about $1,700 in equipment plus a new recurring total of $57 per month (remember — we had been spending $220 per month before all this started). After month 10, the savings started. After two years, we had saved $2,243. After three years, $4,200. And we don’t miss a thing.

Except HBO.

Photo: redjar

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