For decades, consumers have subscribed to magazines and periodicals, and each month are presented with fresh reading material. Fast-forward to more recent times, and subscriptions to “[item] of-the-month” clubs become popular gifts. Still today, more and more products that we consume or use regularly are becoming available to us via subscription services. According to the Pew Research Center, the percentage of smartphone owners who say they have ever used their phone to watch movies or TV through a paid subscription service has doubled in recent years – increasing from 15% in 2012 to 33% in 2015.
You name it, and you can probably subscribe to it. Movie rentals, toys, razors, pet food, printer ink, neck ties, ingredients for meals, cosmetics, and even cookie dough can be sent to your home on a regular basis, in exchange for a monthly fee, or some other billing frequency.
From a convenience standpoint, it can be invaluable for items or services to arrive with little to no effort on your part. In a previous post about automating your finances, we discussed that there are benefits to the ‘set it and forget it’ approach. But subscriptions can be spending leaks if you’re paying for products that won’t be used. It’s important to reassess your needs for these products on a regular basis. Here are a few tips to ensure that you’re not wasting money by subscribing.
- Understand that one of the key measures that businesses use to evaluate their own success is their percentage of repeat customers. By subscribing, you are becoming a repeat customer. Are the services you’re signing up for really serving you, or are they casing a spending leak?
- Check your bank statement for the last 90 days and see which recurring payments y
ou have. Besides your basic bills and utilities, many of these are likely to be services into which you’ve opted. Are they still useful to you? Can you cancel, reduce, or change your membership preferences?
- Consider sharing an account with a friend or family member if possible. You can split the cost and share the services if it’s more than what you need.
Subscription services provide convenience, and sometimes even offer better prices when compared to one-time purchases of the same products. But without checking in to evaluate your needs and usage, you may be losing out on some money each billing period that would better serve you in a savings account or paying off debts.
