Take Back Your Budget: Track & Manage Your Subscription Services
Take Back Your Budget: Track & Manage Your Subscription Services
Spending on subscriptions more than tripled for Americans during social distancing and sheltering at home (Greenville Business Mag)
The average US household has nine paid entertainment subscriptions (Digital Music News)
The average household spends $47 per month on streaming services (Thurrott)
After the bills are paid at the end of the month, if you’re wondering where your money went, it may be time to take a closer look at how many subscription services you have. The number may surprise you. In fact, 84% of Americans underestimate how much they spend on digital subscriptions every month.
There’s no denying that subscriptions have boomed in recent years, but the pandemic accelerated that growth as many businesses were forced to reconstruct their business model to cater to the need for more at-home delivery services. Many economists have even declared that we are on the brink of a “subscription economy,” which could double in the next four years.
Subscriptions are not bills. Necessities like electricity, water and other utilities may be set up with an automatic payment plan and feel like a subscription. However, the subscription services we’re talking about here are defined as a recurring payment at a defined interval in return for access to a product or service.
Are Subscriptions Hurting Your Budget?
If you were to add up how many subscription services you currently subscribe to, how many would be on your list? For streaming services alone, that number might be four, five or even nine if you're like other Americans who increased their streaming subscriptions last year. This amounts to an average of $47 a month on streaming services alone.
The reason why subscriptions tend to cause people to overspend is because we often forget about the expense. Most, if not all, digital subscriptions ask for your payment information upfront and will keep it on file so they can deduct the payment themselves whenever the payment is due. It’s sort of like having the company hold your wallet for you.
Some of the most common subscriptions include:
Amazon Prime
Netflix and other streaming services
Music streaming services
Wine clubs
Pet clubs
Gyms and spas
Shopping delivery services
Meal and grocery delivery services
Kids toy and activity delivery services
Phone app upgrades and games
Given that 42% of Americans have racked up more credit card debt in the last year, it’s probably safe to assume that subscription services are not helping your budget. The bottom line is that hitting the unsubscribe button can do wonders for your personal finances and spending habits.
Giving Up Convenience And Exclusivity
The unique thing about a subscription is that it’s an incremental budget expense. Before streaming services, shopping memberships, restaurant clubs, delivery services, etc., you may not have “needed” that particular service. There are other ways to access the services and products that you were previously getting through a subscription.
For example, you can always drive to the drugstore to get batteries or pick out a lunchbox, you don’t have to order it on Amazon. Finding alternative entertainment options, like reading or playing games, instead of watching a show is another example.
As long as you’re willing to forego the convenience of a delivery service or the exclusivity of a shopping subscription, unsubscribing from recurring payments that aren’t necessary is a no-brainer. Especially if you are overspending every month and need to cut back, canceling one or a few subscriptions is an easy way to free up extra funds.
Tips For Getting Rid of Unnecessary Subscriptions
The biggest thing to think about with any subscription is whether or not you can live without it. Yes, even Amazon Prime! For some people, the convenience is worth the subscription payment. For others, they might not even know they can live without a certain subscription. If you’re looking to cut back on subscriptions, you might just need a little push.
Here’s how you can track and manage your subscriptions:
Monthly
Create a folder in your email for subscriptions
Unsubscribe from any emails that you never open and/or from companies that you no longer buy from to stay organized
Check your “subscription folder” for account updates or changes to your recurring payment
Quarterly
Make a list of all your subscriptions, memberships and other recurring payments that aren’t necessities
Separate your subscriptions into two columns: things you can keep and things you can get rid of
Use the money you would’ve spent on subscriptions towards a debt payment or savings goal
Annually
Commit to one big “unsubscribe” for the year, like Amazon Prime or Costco - think of it as your money resolution
As a general rule, before you subscribe to a new subscription service, you should take stock of your current subscriptions and potentially unsubscribe from one to make room for another. It may not be easy at first to miss out on these services, but after a few months you will likely find that you don’t really miss it. At least that’s my experience!
If you’re interested in taking your budget a step further, check out my e-course on how to create and maintain a budget. Access it here! Use coupon code: SUBSCRIBER for 10% off!
