Subscription Costs: The Silent Spender & How to Stop the Damage
By Kevin Sun and Mark Kalinowski
Are subscription costs the reason why you’re spending a lot more money than you expect every month? Recurring payments for phone plans, gym memberships, and streaming services are silent expenses that can slip through even the most careful budgets. With people paying over $800 (USD $640) on digital subscriptions in 2019, you could save a lot of money by improving your subscriptions game. Here are 3 ways to do just that:
1. Keep Subscription Costs in Sight and Mind
A tried and true personal finance hack is to set up auto deposits on your bank account so that a part of your pay cheque goes straight into your savings. As the saying goes: out of sight, out of mind. You won’t miss the saved money if you never see it in your spending account.
But when it comes to subscription fees, auto renewals are your worst enemy. That’s because not having to click the pay button every month makes it a lot easier to ignore or even forget the money leaking out of your wallet. The best way to keep subscription costs in sight and mind is to just turn off auto renewals. If that’s not practical, then set a calendar reminder to check your subscription a few days before it renews. When the reminder comes, go to the cancellation page, hover your mouse over the cancel button, and decide if paying another month for this service is really worth it. Repeat this as long as you keep the subscription.
While you’re at it, take the chance to review all your subscriptions. Make a list, record what they cost with a monthly expense tracker, and compare them. For example, if you’re watching most of your shows on Netflix, then do you really need Crave TV or Disney Plus on top of that? If you do want to watch everything, then you could always subscribe to only Netflix for one month, then only Crave TV the next month, etc. That way, you’re just paying the price of one subscription each month but will still eventually be able to watch all the shows you want.
Does Being Organized with Your Money Really Matter?
2. Control Subscriptions Instead of Letting Them Control You
Of course, keeping subscription costs down is not always as simple as bookmarking the cancellation pages. Many subscriptions, especially internet and phone services, don’t even have those pages and instead force you to call. Their goal is to make it as hard as possible for you to stop paying them, hoping that you’ll be too tired or confused to figure it out.
Don’t let companies control your wallet. Find out right now exactly how to cancel your subscriptions even if you don’t plan on actually doing it. Having this information handy will give you the push you need if you do eventually decide that one of them isn’t worth it. Also keep track of how you actually use what you pay for.
If you have to remind yourself to burn up your 10 GBs of phone data every month, then that’s a sign you don’t need that much data in the first place. If you get a gym membership to try to force yourself to exercise but don’t actually do, then you’re just giving your money away (tip: get into the habit of exercising before paying for a membership). Knowing how to trim unnecessary costs is key to staying financially healthy, especially when you’re paying off debt.
How to Stop Being Charged for Subscriptions When You Cancel a Service
When it is time to cancel, follow all instructions exactly and keep proof that you did so. For example, if you need to return an internet modem, then get a receipt showing that you made the return. If the company then tries to charge you because they say you didn’t return their modem, you can prove them wrong. If you’ve preauthorized charges to your credit card, you can ask your credit card company to block payments to a service provider if they don’t honour their cancellation rules. You many need proof that they agreed to cancel your service, so hang onto those emails or screenshots.
If you preauthorized a company to withdraw money each month from your bank account, putting a stop payment on those charges might cost you. To avoid stop payment charges in the future, set up a recurring bill payment in your online banking system instead. That way you stay in control of who takes money out of your bank account.
3. Make Sure Your Subscription Costs Are Really a Good Deal
When it comes to subscriptions costs, the only way to subscribe and save is to get a good deal that meets your needs. Many companies advertise themselves as having the cheapest unlimited data plans or super cheap phone plans, gym memberships, etc. But price tags can be deceptive. Instead of picking one service over another just because it costs less, look carefully at what they each offer and how much value they really bring to you.
One way to do this is to break down all the specific services included in a subscription. For example, getting a combined phone and internet plan might be cheaper than getting a phone and internet plan separately, which companies love to remind us of with big discount numbers. But does that phone plan have enough data for your needs? Does the internet plan have too much? Rather than get an all-in-one bundle that might include services you want more of or services you don’t want at all, it can be better to mix-and-match subscriptions to get exactly what you need.
In the end, your goal is to keep subscription costs within your budget while getting everything you want to use. Taking the time to do this right is definitely worth it as either the costs or the savings will add up every month.
What to Do When Managing Subscription Costs Feels Overwhelming
With our lives already so busy, untangling our subscription costs can feel like a huge chore. However, if you’re facing a financial challenge like growing debt, then lowering these costs might just give the extra boost you need to regain your financial wellbeing. And you don’t have to do it alone. Whether it’s about your subscriptions, your budget, or other financial concerns, a professional credit counsellor at a non-profit credit counselling organization would be happy to answer your questions and guide you towards the solutions you need.