Subscriptions can be sneaky. These days, more and more businesses are opting for a subscription model, which allows them to maximize customer retention and make their sales more predictable. Customers get the convenience of hands-free, automatic payments, but that convenience also means you aren’t constantly aware of what you’re paying. Gradually, you’ll add more and more subscriptions, and their cumulative costs will start eating into a disproportionate amount of your budget. The average American estimates they’re spending $79.74 per month on subscriptions, but in reality, they spend $111.61, nearly 40 percent more than they think.
You owe it to yourself and your long-term financial goals to check which subscriptions you’re paying for on a monthly basis and, if necessary, cancel them.
The Usual Subscription Suspects
These are some of the most common subscriptions stealthily eating up your budget:
- Online subscription box services. Do you subscribe to any services that deliver you a box of a specific type of good, once a month or a few times a year? These services exist for almost any kind of product you can think of, including clothing, novelty items, and even ingredients you can use to cook your own meals. These boxes rarely have anything you truly “need” in them, and because they only come occasionally, it’s easy to forget that you’re subscribed.
- Entertainment. Entertainment costs come in a wide variety of categories. These days, some of the most common include subscription video streaming services, music streaming services, and online gaming services. Conventionally, traditional cable services fall into this category as well. Many of these modern services offer a large selection of entertainment, constantly, for a relatively low price per month. The problem is that all these little costs add up; one subscription here or there won’t hit your budget that hard, but too many can end up costing you hundreds of dollars.
- Groceries and daily needs. Thanks to Amazon and other online retailers, subscription delivery services are providing more daily needs, like groceries, razor blades, and bathroom essentials. These services bill themselves as conveniences; they definitely save you time if you’d otherwise be going to the store regularly, but you’ll be paying a markup for that convenience. With more than one service on a regular enough basis, you’ll quickly waste a lot of money for minimal time savings.
- Gym and club memberships. Memberships to gyms and fitness clubs can be worth it—as long as you’re using them often. However, a surprising number of people pay a setup fee upfront, then continue paying the monthly fee indefinitely, only attending the gym once or twice a month as their schedule allows (or never attending). They see it as better than the alternative, of canceling the membership and restarting it at a later date, but over time, those costs can significantly accumulate.
- Home security. Home security services these days rely on home-based devices, like cameras and microphones, placed throughout the house. However, there are also peripheral security services available, like ongoing monitoring. For the most part, these costs are worth it, especially if there are a lot of valuables in your home. However, if you’re paying too much without shopping around for competitors, or if those services are one of many dozens of subscriptions in your budget, it can be problematic for you.
- Storage and online services. There are many online services that function as subscriptions, including cloud storage solutions for your files. In many cases, the consumer-facing version of these products are free or just a few dollars a month, but as is the case with other categories of subscriptions, the real danger is in letting many of these services accumulate. A mere $5 a month doesn’t seem like much, but if you have a dozen or more services at this price level, that can escalate to $60 before you know it.
- Professional services. You may also require subscriptions for your career or your business, though business subscriptions may be part of your separate business budget. Productivity software like time tracking tools or project management apps tend to be more expensive than other types of software, capitalizing on the professionals who need them for their livelihood. It’s hard to avoid these expenses, but in many cases, you can consolidate apps or rely on a free alternative.
The Subscription Economy
It’s evident that the subscription economy is only going to grow from here, with more companies transforming their entire business models to support a base of subscribing customers. And of course, due to the convenience of such an arrangement, customers will be willing to pay for it.
It’s on you to check in with your spending habits regularly, challenging your assumptions and paying attention to the costs that might otherwise slip beneath your notice.