Several years ago, subscribing to streaming services was seen as a way to cut the cable and save money. With Covid, people turned to home delivery services for meals or groceries. Suddenly what started as a $20 per month way to beat cable or have a meal delivered has turned into a $200 per month drain on your budget. How can you whittle down your subscriptions to a more manageable (and budget-friendly) amount?
How bad is it really?
According to myfico.com, in 2021 consumers spent an average of $273 on subscription services. Perhaps more concerning, among consumers who participated in the survey, 100% of them were unaware of how much they actually spent per month.
How do you compare?
To manage your subscriptions, you need to first tally up how many you have and what you’re spending on each. This shouldn’t be too hard – a simple review of your credit card or bank statements should show recurring charges for each subscription. Don’t forget those subscriptions you only pay for annually; to get a complete picture, you’ll want to research your spending for at least the past year.
What’s important to you?
Once you’ve compiled a list, it’s time to figure out what subscriptions are important and which ones you can cancel. Some of this may be easy; if you find a subscription you’ve completely forgotten about, just cancel it and move on.
Then consider which ones you rarely use. For instance, if you signed up for a streaming service for a particular show, have you watched all the episodes of that show? Are you viewing anything else using that service, or is it still active just in case you might want to watch something in the future? While you may get a discount by signing up for a year term, streaming services are made to cancel and then reup if you find you want it back.
In our household, we sign up for YouTube TV in the fall for football and continue it until the Super Bowl. The first year we did this, we were concerned that we would miss having live TV in our home after halting the service. However, even during the football season, the only live shows we watched were sports, so canceling it in February caused no hardships.
More than just streaming
You should consider your usage with any subscription you have, whether it’s a gym membership or a food delivery service. Do you order enough from Amazon to pay for the convenience of two-day shipping? Or perhaps you stream shows on Prime to make it worthwhile?
Are you still ordering as much food to be delivered as you were during Covid, or is it more an easy replacement for having to plan a menu for the week? Ask yourself tough questions to determine whether the service is just there as a convenience or as something you actually use.
One method to determine a subscription’s worth
Louisiana Federal Credit Union has a chart showing use and cost versus whether you should keep the subscription.
| Category | Cost and Benefit | Keep or cancel |
| High cost, high use. | $21 or more monthly. Use more than 10 days per month. | Consider keeping |
| Low cost, high use. | $20 or less monthly. Use more than 10 days per month. | Keep |
| High cost, low use. | $21 or more monthly. Use less than 10 days per month. | Cancel |
| Low cost, low use. | $20 or less monthly. Use less than 10 days per month. | Consider canceling |
The website cites a subscription to YouTube TV, which is currently around $75 per month. If you are like us and use it repeatedly then it could be worth the cost. However, if it’s just another option to “see if anything’s on” there are lower priced streaming services that could fit the bill.
Other examples include Netflix, which may potentially reside in the low cost, high use area (makes sense to keep); and meal delivery or a gym membership in the high cost, low use area (makes sense to cancel). Many low cost, low use subscriptions may be those you’ve forgotten about (such as apps on your phone).
What have you budgeted for subscriptions?
Some people start with this when talking about subscriptions. They think if you’ve budgeted $200 per month then as long as you’re below that amount, you’re fine. However, I believe if you’re not using the subscription, you’re throwing money away. Why waste an extra $20 per month just because you’re below budget?
If you haven’t budgeted for these services, you need to determine how much you’re willing to spend after you’ve whittled down the list to those you truly enjoy and use.
Keep an eye on free trials
One thing to keep in mind – free trials are provided because services know how easy it is to forget about the end of the trial, so you end up paying for something you may not have wanted. If you agree to a free trial, set a reminder the day before it ends to cancel the subscription if you don’t want it. Many services keep the trial running until the end date, not the day you cancel.
Lean toward canceling
If you end up with a few subscriptions that you simple can’t make a decision on, cancel them. Unless you’ve received an incredible deal or sign-up bonus, there’s usually no large up-charge for canceling and restarting a couple of months later. Plus canceling gives you the opportunity to really see if you will miss the service.
It seems that more products and services are using the subscription model, so maintaining your costs will continue to be important in the future. Set a budget for what you’re willing to spend, check at least twice a year to make sure there are no ghost subscriptions you’ve forgotten about, and be willing to cancel and try others if you find you aren’t using what you have. Worst case you end up signing up again in a couple of months.
Photo by Oscar Nord