Subscriptions aren’t just for magazines any more.
Monthly payments to digital subscription services are now a part of our regular spending habits. For many, these subscriptions are a separate line item in the monthly budget, at least the ones you can remember. It’s true that these subscription payments are not new, for decades now we have subscribed for newspapers, magazines, insurances, and paid rents on a regular basis.
Though, the rise of the on-demand economy and increase in digital products have seen recurring payments and subscription services increase massively in both our business and personal lives. A study shows that 55% of U.S. homes are spending $2.1 billion a month on streaming services. Yes, $2.1 billion every month…
The truth is, most consumers don’t know how much their monthly digital subscription cost them.
Many individual things like Netflix, beauty boxes, meal services, dating apps, Amazon Prime, and music streaming seem affordable. The marketing is clever, stating – “It’s ONLY $20 per month”. And that’s true, not a deal breaker for most people to spend $20 a month for entertainment or other intrinsic value. The problem is when these subscriptions start compounding. A music service, a couple video services, a tv service, a budgeting app, a coupe online magazine subscriptions. All these “small” monthly costs together begin to add up, and the worst part, you’re probably not using most of them.
Of course, some of us spend more than others and some spend less. Some services are necessary, such as, a freelancer writer will be needing internet access, or other business related subscriptions; also some other people have replaced landlines in favor of mobile phones, not really losing a subscription as much as transferring one. Some digital subscriptions may save you money but some might be causing you to spend more.
The question is:
How much you are spending on the things you no longer need and It doesn’t make a difference in your life?
Maybe your explanation is:
“I will cancel it next time”. And the next time never comes.
A Simple Solution
It is difficult to recall every digital subscription. Easy enough to fix it, set aside an hour to do an audit of all the subscriptions. Go through your budget for both monthly and annual expenses. It’s not uncommon to be spending $150-$250 per month on subscriptions alone.
If you are too busy to go through your finances, use any app. There are free services such as TrueBill and SubscriptMe aid you in seeing what you are paying per month. These apps will connect to your bank account and aggregate your subscription payments to give you a clear view of what you’re paying monthly.
Thinking of all the possible digital subscriptions you may have? Don’t worry, we came up with a list to help.
- Amazon Primes
- Mobile phone
- Movie/TV services
- Fashion subscription boxes
- Music streaming
- Cloud storage
- Gaming services
- Home security systems
- Book services
- Beauty subscription boxes
- Diet/fitness apps
- Children’s subscription boxes
- Dating apps
- Wellness apps
- Identity protection monitoring
- Digital newspapers/magazines
- Web hosting
- Meal-kit services
- Lifestyle subscription boxes
The result of this audit might surprise you or maybe dismay you. And even if you are not touching $250 a month, ask yourself, am I getting the real value of these things at a high price?
Yes, you might be. These monthly subscriptions charge more than what they show in offers generally. Sometimes you don’t get time to unsubscribe and there you are cutting your own resources here. There are a few more measures you can take in order to unsubscribe.
There is another app named “TRIM”.
All you have to do is hand over your credit and debit card login information, so it can scan your statement. The security is plain-spoken by the company and it will send in copies of bills. Once Trim performs its investigation, you will get a text message with a list of all your periodic charges.
You answer with “Cancel X,” and the company will request service cancellation to the provider on your behalf. An app like Trim is useful alone to see how much you’re spending on subscriptions in the first place.
So, how much value does a digital subscription really bring you?
No one can answer this but you. Here’s our suggested approach to managing your digital subscriptions. First step, audit… Make a list of every subscription you’re currently paying. Add up the total amount of all subscriptions.
Sometimes you have to make tough decisions.
Here’s your first decision. You now know exactly what you’re paying per month for digital subscriptions. With this information, your first decision is does this amount fit into your monthly budget? Even if the answer is yes, you may have a reason for cutting back expenses; saving for a purchase, traveling, etc.
Let’s assume you’re trying to save money in your budget. Take each subscription service and write it down on a piece of paper in a list. Assign a number score, 1-10 to each digital subscription with 1 representing completely unnecessary and 10 being completely necessary.
Think hard about what is and what isn’t necessary. Some will be obvious, others will cause pause. I did this myself and went from $272 per month in monthly subscriptions, down to $122. That’s $150 back in to my budget, or into savings every month.
Get rid of that debt, then reconsider a monthly digital subscription.
As with all things, if you find yourself in a situation that no amount of budgeting or cancelling will save you from, contact us. We’re always happy to look over your situation and offer the best advice for eliminating your debt.
Your partner in debt relief,
Consumer First Financial