We're living in a great time, aren't we? It's the golden age of compelling television, beamed to whatever device we choose, to be watched whenever we want. We can have meals or groceries dispatched to our home almost instantly. We can automate our staples so that Amazon or our chosen shaving brand sends them to us before we ever run out. There's a wide range of fitness classes and gyms available to us, apps to keep our minds (or libidos) occupied and curated boxes designed to delight us. We've entered the era of ultimate convenience and it's allowing us to "live like emperors," as Hasan Minhaj once humorously put it on his Netflix show.
But that imperial lifestyle is costing us. And frankly, Netflix is part of that cost. Think of all the subscription services you utilize and love. Now think of the ones you're paying for but aren't using. Or could do without. Go ahead, I'll wait ... still thinking? You're probably at a loss because we tend to forget about them when we don't utilize them. In fact, a recent Waterstone Management Group survey found that 84% of Americans grossly underestimate their monthly tech spending.
The consulting firm often advises brands offering subscription services, so it wanted to understand how aware consumers were about their monthly subscription expenses. They questioned more than 2,500 people about "recurring monthly expenses associated with digital services, devices and subscription boxes." The average initial guess was $79.74 per month. But in reality, the actual average was a whopping $237.33 per month.
"We expected people to underestimate what they spend each month—we knew from personal experience this was a trend," said Waterstone's managing director, Dhaval Moogimane. "But we were amazed ... people spend more than double what they estimate on subscriptions. We're talking about hundreds of dollars each month. We did not see that coming."
Hundreds of dollars are spent, almost without our knowledge. Or worse: we know it and don't care because "it's only a few bucks a month." According to previous research conducted by consumer finance organization Hiatus, consumers spend more than $500 billion per year on subscription services, but more than 70% say they'd have cancelled their subscriptions previously—except, they forgot or couldn't be bothered. Nearly a third said they didn't know several services were set for auto-renewal.
All this cash is just slowly and steadily leaking from my bank account? Maybe that's why I never have as much as I'd like in there. And here I thought avocado toast was to blame for my inability to buy a home. In the name of research, I started auditing my subscription services and canceling any ones I'm not using or no longer value.
Here's what I discovered: you have to think of these subscription services like anything else you might purchase. If you bought something at a store and didn't take it out of the bag or use it within a month, what would you do? What should you do? Return it. So here's your game plan to keep more money in your bank account each month. It's essentially a way to have more money, instantly.
For me, it was helpful to see all the services and prices together. This helped me compare redundant subscriptions or gauge if a service is worth the cost. Track the charges on your bank account using past billing statements. When I asked colleagues to do the same, here are some of the things we noticed: Someone realized he hadn't watched his Showtime or Hulu in months. Someone discovered the shave club he forgot he was subscribed to was sending razors and shaving cream to his old apartment. I discovered a few of the magazines I no longer read (just move from the coffee table to the recycling bin) had increased their prices substantially.
Cut Some Loose
If you haven't used it in a month, unsubscribe. You can always get it back, sometimes for a discount, even. But I'll be honest, this part is kind of a drag. These companies don't make it easy. You sometimes have to call or email back and forth to ensure you're no longer paying.
Set Calendar Reminders for Free Trials
One colleague, who shall remain nameless, came clean about discovering a porn membership lurking in his bank statements, going back about a year. He said it happened after a "free trial" he "accidentally" signed up for lapsed and entered him into a monthly subscription. There's no harm in trying something out. But immediately set a calendar reminder to cancel (or at least review) before you start paying.
Consider Cheaper Alternatives
Compare your more expensive services with options that cost less. Perhaps you could be saving money with a more affordable gym membership or a less costly streaming service. Are you not using all the cloud storage you're paying for? Could you be splitting up and sharing some services with your friends?
This Could Help
Trim isn't actually an app. It's a digital assistant tool that uses AI to analyze your spending, alert you of unwanted subscriptions, negotiate your bills and watch retailers like Amazon for price drops to score you adjustments. There's no set fee for this service; instead, Trim asks you to pay what is fair on a scale of $3 to $10 a month.