From Netflix, to Amazon, to Adobe, subscription services have become an inseparable part of our daily lives. And with more companies transitioning away from one-time payments, consumers are facing a rising burden of monthly payments to these subscriptions. With so many subscriptions, even the savviest budgeters will have a hard time keeping track of what services they’re subscribed to and what they’re spending on them. Thus, we’ll be covering how to navigate and manage this new payment paradigm and help you cut down on unnecessary subscription expenses.
Assessment and Categorization
To take control of your subscription spending, you first need to figure out exactly what you’re subscribed to. You can do this manually by pulling your credit card transactions, or by utilizing tools like Rocket Money and PocketGuard that do it for you. Once you have a list of your subscriptions, go ahead and categorize them into essentials and luxuries. For example, a Costco membership would be considered essential, whereas multiple streaming services (Hulu, Netflix, Prime, Peacock, etc) would be considered redundant and more of a luxury. You might be surprised by how many redundant or unused monthly subscriptions you’re paying for.
Budget Formulation and Realism
Once you’ve consolidated your essential subscriptions, create a clear and realistic monthly budget to allocate towards subscription services. Imagine this, let’s say you pay for Netflix and Amazon Prime, costing $30.48/month total at time of writing. You’re also busy at work, so you’re subscribed to Blue Apron. Depending on what option you choose, it’ll cost around $100 for 10 meals, so around $10/meal totaling to $400/month. But your work as a freelance creative requires an Adobe Suite subscription, which is $59.99/month for everything. You also want to stay active, so you’re paying $30/month for a local gym membership, plus dues. And let’s face it, just about everyone has a Spotify subscription that takes another $10.99/month. That’s $531.46/month. Every month. Before rent, before utilities, before phone and internet bills, before insurance costs, before transportation upkeep, before any additional groceries you might get (Blue Apron only covers 10 meals out of 21 in the week if you eat 3 meals a day). If you’re reading this article, you’re probably thinking $531.46 going out the door every month is unrealistic. But then what is the right budget? Which of your essential subscriptions are really essential?
Bargain Hunting
Beyond budgeting, you can also consider negotiating subscription fees and exploring discounted plans. You can also leverage free trial periods and keep a look out for promotions and bundle offers, both of which will lower your overall spend.
Conclusion
In essence, strategic management of subscription services demands intentionality and awareness. If you’re on a tight budget, do you really need a Netflix and a Hulu subscription? How often do you order off of Amazon that you need Prime? Or maybe you still have a subscription to the New York Times that you don’t read anymore and forgot to unsubscribe to. However you slice it, it's in your best interest to tackle and take control of your subscriptions to better manage your money and save yourself from the rising tide of subscription services.