How to avoid drowning in subscription fees
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You’re likely signed up for more than one subscription service, between Netflix and Hulu to Amazon Prime and Spotify. While each service on its own may not cost much, the collective charges for these modern conveniences add up. Before you know it, a significant chunk of change is disappearing each month.
“People underestimate the impact that recurring subscriptions will have on their budget,” said Chane Steiner, CEO of Crediful. “Throw in a cable provider and the total can easily exceed $1,000 per year spent on providers that offer similar services.”
Drowning in subscriptions? Here’s how to get back in control.
Determining if you have subscription overload begins with identifying how many subscriptions you’re signed up for and what they’re costing.
“The vast majority of streaming services like Netflix and Spotify don't send you a monthly receipt to tell you how much you're spending with them or when they are billing you,” said Derek Szeto, co-founder of Butter, an app that helps users find, track and manage subscriptions.
It’s up to you to review your accounts and bills on a regular basis. One way to do this is through an app like Butter, that automatically tracks recurring purchases. Others include Truebill and Outflow.
Subscriptions are great because they provide users with access to services one may not otherwise be able to afford. But another important part of controlling these expenses is determining whether you’re actually using each service.
To identify which subscriptions to nix, keep track of which ones you use for two weeks or more. Keep record using a spreadsheet, said Jerry Brown, owner of Peerless Money Mentor.
Once the two weeks are up, eliminate any subscriptions that aren’t getting much use.
Another approach to paring down your subscription spending is to ask this simple question: Do you really need multiple streaming services that provide essentially the same thing? It may be time to cut the ones you no longer use
“Resolve to only pay for one subscription per product or service you need,” said Logan Allec, founder of personal finance blog Money Done Right. “One subscription for music, one for television and one for news.”
It’s important to prevent yourself from falling down the rabbit hole again, said Cynthia Pruemm, vice president of SIS Financial Group.
“Before you even sign up for that free 30-day trial, set a reminder on your phone for 20 days from then to cancel the trial,” said Pruemm. “Twenty days should be plenty of time for you to determine whether that subscription is one you want to keep or not.”
Learn more about the dangers of risk-free trials here.
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