Why monthly subscriptions may be costing you way more than you think
How much would you say you spend on monthly subscriptions services if you only had 10 seconds to answer? What if you had 30 seconds? If you couldn’t resist the temptation to take a crack at answering the questions above, then the odds are that you may be in for a nasty surprise if you really sit down to check your answers. A group called Waterstone recently conducted the same experiment on a group of 2,500 consumers and the results revealed a great deal about America’s love affair with subscriptions.
The survey says…
When given just 10 seconds to guess what they spent on subscription services each month, most people threw out an average of $79.74/month. Sounds legit, right? Just to be on the safe side, the same consumers were then given 30 seconds to reevaluate their answer. Most decided to give themselves a little extra room for error and upped their guesses to $111.61/month.
That’s when things got real. Each consumer was given a thorough outline of a variety of popular subscriptions available and given a chance to work out how much they spend on each every month. The average answer revealed that they actually spent an average of $237.33/month on subscription services, a 197% increase from the average first guess. Oops!
Time for a reality check
As we’ve just learned from the 2,500 consumers unlucky enough to be subjected to the experiment, most people spend far more on subscriptions than they think they do. Unfortunately, these days it couldn’t be an easier mistake to make. Gone are the days when you actually had to hand over cold hard cash for every purchase. Now it’s as easy as putting your credit card on file and having it auto-renewed monthly for everything from streaming services to gym memberships to subscription boxes.
Though ease of payment can be a good thing when it comes to subscriptions you actually use, they can be a real killer on those that you don’t. Many of us don’t even realize exactly how much money we’re wasting each year on subscriptions that seemed like an awesome idea at first, but which have long since outgrown their luster. Ironically, this is what most subscription services count on. After all, what’s better than making money off of people who may or may not even be utilizing what they’re paying for?
Clearing the clutter
So how do you go about reclaiming control over subscription spending? First, you’ve got to know exactly what you’re dealing with. We get it, no one wants to take the time to sit down and really think about how many subscriptions they’re currently taking part in. But, as we’ve seen above, taking just one hour to do so could easily save you hundreds or even thousands of dollars a year. When you put it in that context, there are few other things you’re going to fill that hour with that will be more profitable in the long run. For those validly short on time or attention spans, there are also apps such as TrueBill and SubscriptMe that can help you out if you don’t mind them combing through your bank accounts.
Once you have all your subscriptions in front of you, sit down and ask yourself which ones you’ve actually used in the last month. Not which ones you promise you’ll use next month, but the ones you actually have utilized within the past four weeks. Cancel any of them that don’t make the cut and promise yourself that if you really still miss them a month after canceling, you’ll sign yourself back up. Pretty much anyone who offers you a subscription will be delighted to have you reenroll if you feel the need, but the odds are you may not miss quite as many of them as you might think.