Are Subscriptions Slowing Your Financial Progress?

Every year, many of us kick off with a list of resolutions we hope will set us up for a more prosperous year. In our last blog post, we shared five easy ways to keep your financial resolutions. In there, we discussed a topic that is quickly becoming kryptonite to effective budgeting: our ever-growing list of available subscriptions and services. 

A few years ago, this wasn’t much of an issue, but as the subscription economy has grown, so too has our lack of awareness around just how much we’re spending – the video streaming market alone had a value of just over 50 billion in 2020. It is set to expand at a CAGR of 21% between 2021 and 2028. 

In the last couple of years, we’ve also seen a massive increase in the number of companies offering subscriptions, especially when it comes to the bifurcation of streaming services. Many cable networks pulled their content from other platforms and created their own – think Disney+, HBO Max, Peacock, and AppleTV+. 

At any rate, it’s a safe bet Americans are spending far more on subscriptions and services than they think and far more than they need to. Below we share some ideas on how you can effectively manage your subscriptions and services to keep the ones you enjoy and rid yourself of the ones that are just standing in the way of your financial goals. 

Start with a List

Before you can start to cull your list of subscriptions and services, you need to understand how many you’re using, what you spend on each individually a month, and then what you’re paying every month for all of them (spoiler alert: this may be more than you think). 

This also isn’t something you can do from memory. It’s advisable to review your last few months of credit card and bank statements to get the most accurate picture – you might have some you forgot signing up for or free trials you didn’t cancel before they started charging you (more on this later). 

What qualifies? A good start is to list everything you use that falls under the following categories:

  • Music & Podcast streaming (Spotify, Apple Music, Amazon Music, Soundcloud, etc.)
  • TV, Movie, Video streaming (YouTube, Netflix, Hulu, Disney+, HBO Max, etc.)
  • Food Delivery services (calculate the total cost of transactions, including order, tip, and additional delivery fees for Uber Eats, DoorDash, Instacart, GrubHub, etc.)
  • Online news subscriptions (Apple News, New York Times, Bloomberg, Wall Street Journal, etc.)
  • Sports streaming services (ESPN+, MLB.TV, NFL Sunday Ticket, etc.)
  • Health and Wellness paid subscriptions (Peloton, ClassPass, Headspace, Calm, MyFitnessPal, Strava, etc.)
  • Audiobook apps (Apple Books, Audible, Kobo, Kindle
  • Ride/Car/Scooter share (Car2Go, Zipcar, Turo, Uber, Lyft, Lime, Bird, etc.)
  • Fitness memberships (SoulCycle, Barry’s, Equinox, LA Fitness, Crunch Fitness, etc.)
  • Gaming (Amazon Luna, Apple Arcade, Xbox Game Pass, Nintendo Switch Online, Twitch, etc.)
Check Up on Your “Free Trials”

Throughout 2020, many of the services above and others expanded their existing free trial offers as we were forced to stay home and shift many of our day to day activities online. As generous as that was, many, if not all of those offers ended at some point. Chances are the vast majority of us forgot to cancel before we were charged for a subscription we didn’t need or use as much as we thought. 

Now is an excellent time to make sure you’re canceling those, and the reason why referencing credit card and bank statements will be the most accurate account of how many you’re still signed up for –  deleted or unopened apps could be some you’re still paying for.

Evaluate Doesn’t Always Mean Delete.

As you review your list of subscriptions and services, you may not need to delete as many as you think. Many have a tiered payment model, so it may just be ensuring you’re at the payment level that fits your usage. 

There are also options for family or group rates on certain services if, say, your adoption of Spotify has influenced your spouse or older children to use it now as well – switching to a family plan would then be the most economical option. Some small groups of friends also share streaming services – each signing up for one and sharing access rather than everyone having their own logins with extra profiles going unused. 

Gone Doesn’t Mean Forever.

As you begin to understand just how much you’re spending, you may decide it’s time for you to part ways with some subscriptions or services. This doesn’t have to mean forever, though; some may even offer discounts to get you back or if you try to cancel, saving you money in the end anyway. 

The most important thing is you’re checking in to make sure you have a handle on how much you’re spending compared to what you need and moving forward with what will best support your overall financial goals. If you would like help determining those goals or maybe readjusting given any significant life changes that happened recently (marriage, children, career change, etc.), reach out to a financial advisor. They will help make sure you’re set up for financial success.