Tips & advice on getting your finances back on track.
Subscription services were making a slow, but steady, rise in popularity prior to the pandemic. Since March 2020, the rate of growth of these shop-at-recurring services has exploded with little sign that they are slowing down. In fact, in the face of the recent hike in inflation, consumers in the US are more likely to cut back on eating out, groceries, and buying new clothes than stop any of their streaming services like Netflix.
The most popular subscription service is Amazon prime with 51% of Americans enrolled according to Statista. This is hardly surprising given the wide scope of services provided by Amazon Prime, which includes video streaming, music, special shopping deals, and one-day shipping.
We as consumers will happily subscribe to all kinds of services, especially if it comes with the convenience of not having to leave our homes. The rise of pet product subscriptions like Chewy and Barkbox has reached over 8% of all US homes (only 70% of us have pets so it’s more like 15% of pet owners).
The convenience of clicking a subscribe button on your phone and having products and services magically arrive at your home or streamed into your living room is intoxicating. However, a study by C+R Research shows that consumers underestimate the actual cost of their monthly subscriptions by over $100. Many subscriptions are automatically charged to your credit or debit card so if you’re not paying attention, these charges can creep up.
Read more: Pay Day Loans and Better Alternatives
There are several subscription trackers that can help you keep an eye on your recurring charges. Rocket Money (formerly TrueBill) for example helps track your subscription services and finds better deals for you. Heads up! This is a paid app, but the reviews and number of users speak to its popularity. If you’re looking for a free app, try SubsCrab which is highly rated and has a clear easy-to-use interface.
Let’s circle back to the rise in inflation and the impact that has had on the cost of living. The average household has felt the bite of rising prices at the grocery store and at the gas pump. Two-thirds of consumers are looking to ease back on their expenses and taking a closer look at their recurring expenses is a great place to start.
While you may not be willing to cut ties with your streaming services, perhaps you can unsubscribe to the one you watch least. Do you go to the gym enough to warrant the monthly fee? What about that meal kit subscription that you still have to cook yourself? Scrutinize your credit card statement for other small but sneaky subscriptions that you have forgotten about. Are there any extra channels you subscribed to just to watch that one series that you finished binging long ago?
Even without the current inflation rate, checking in every six months or so with the recurring charges hitting your bank account is a good habit. Forgotten subscriptions add up over time and wouldn’t you prefer that money to be adding up in your savings account?
Lori Stratford is the Digital Media Manager at Navicore Solutions. She promotes the reach of Navicore’s financial education to the public through social media and blog content.