Streamline & Save: Subscription Spring Cleaning

[00:00:00] Welcome to the More Sense Than Dollars podcast, where your host is Nick and Harry. Hey everybody, what's up Nick? A lot. I didn't ask if you were ready for this one. I thought it might get enough. I was ready for that question, but you didn't ask it.

[00:00:26] Pavlov's intro. Yeah. How many monthly subscriptions do you think you have? The ones I know about are too many and I'm sure. It's double digits, right? I might have more. Yeah. You break down annual subscriptions too. You include those.

[00:00:46] I think most of us are probably someone in the double digits, and that's what this episode's going to be about. Your monthly subscriptions, your annual subscriptions, all these recurring payments you have that you know about and I've been meaning to cancel or don't know about.

[00:01:01] We're going to talk through identifying those and making them an intentional part of your budget rather than these, you know, payments in the background that you're making on your credit card. But first, I want to hear your piece or give me your two cents. You mean yes.

[00:01:24] I was thinking recently spurred on by a topic that came up in a podcast. I was listening to how our the kind of base unit we think of when it comes to money,

[00:01:37] changes dramatically throughout your life and thinking back to middle school I remember asking to bar with quarter for someone at the lunch table was like asking for a thousand dollars alone or something. Yeah, it was like, dude, not much to come back.

[00:01:55] Maybe I'll give you my leftover five cents and you can stack a few of those up. But I could get a cookie for a quarter. I'm not just giving that away. And thinking how how dramatically that can change over the course of your life.

[00:02:08] Like I was like for a college student and my younger sister. I would have a hundred bucks for a concert ticket. And I was kind of, you know, I don't procrastinate or I get stuff eventually but I'm sorry. I was only 100 bucks. I also went to her eventually.

[00:02:25] I'm not trying to stiffer or it's just like, you know, you can float a hundred bucks, right? It's not too bad. But like thinking back, like a hundred bucks could like make a break a month for a college student. Oh yeah.

[00:02:36] When we were in college that that was a dramatic difference. But then like that clicked and I was like, oh crap. Like I'm kind of being an asshole. It's very relative. But it just yeah that that.

[00:02:47] Yeah, it's very relative the money amounts of money is so relative and just had a few moments recently that made me moment of clarity. I think it'll just remember I guess more. Because the same thing happens to you I hear, you know,

[00:03:04] see clips of like Dave Fortnight putting like 75,000 or bets on the same as you know, 10 for you. And it's like that's just so you can feel a little bit. I don't know like that. Yeah, what? It never stops. That's a good one. About years.

[00:03:24] Well, let me say I'm a capitalist but I do get a little bit annoyed when there are new like fun fads like pickleball. And all these companies are capitalizing and praying on people who want to get into it.

[00:03:39] The amount that places are charging for courts to play and the equipment, the memberships for gyms just to play. It's pretty crazy. I don't know. I get that there's there's demand for it and a market for it. But it's it makes some things like that pretty inaccessible.

[00:04:01] And I think that was the case with like 10s and some other more expensive sports where you needed like a dedicated court. But seeing that a lot with pickleball now and I like playing it, and it's hard to play. So bring bring back the free courts.

[00:04:19] So I was like, you're about to move to the suburb. I guess it's mostly a city thing. There are free ones in the suburbs. All right. So in our research for this, I was wondering, like what's the, what are people paying in subscriptions on average?

[00:04:41] Because each one individually is not that much. Right. A lot of them are 10, 15 a month. But when you add them up they get pretty. The number gets pretty big. And so you want to talk about the survey that we saw. How much on average people are actually paying?

[00:05:02] Yeah. Yeah. I wasn't sure it would just survey, but maybe I'll just be gone both. So one of them show that the average American consumer spends $219 a month on subscriptions. That in and of itself is a pretty high number almost 3000 years. Yeah.

[00:05:22] But kind of the kicker on this is that those same consumers estimated that they spend $86 a month on subscriptions. So people were off by two and a half times. Yeah. Like, well, I probably spend around 80 bucks. And then you had about 200 and. Yeah.

[00:05:45] It's a 100 in roughly 140 dollar difference per month. That's you know, that's a few thousand a year that you aren't really accounting for mentally. Yeah. Either you're not getting your money's worth for it. It's in the background or you just I don't know. You just didn't know.

[00:06:04] And I have some of those. We when we were going through ours doing this. We did this all of ourselves. And I had a few like, oh, I didn't cancel that free trial. Yeah. And then there was this other one from from Chase. Yeah.

[00:06:19] So we saw another one where Chase surveyed their customers. And 60% of them forgot about at least one recurring subscription payment. So that could be a lot more, but at least one of them. It's like, oh, I didn't know I still was paying that.

[00:06:37] Because when it's on autopay, it just gets charged to your credit card. And it might be 10 or 15 bucks. You don't notice it. You know, that quickly becomes a few hundred dollars a year.

[00:06:49] So that's why we want to do this episode is because we're most of us are paying some level of subscriptions. Everything's software as a service these days. And we want to make sure you know about the ones that you're paying for.

[00:07:02] I guess we should start with how do I know which ones I'm paying for? I'm paying for them across different credit cards. Some of them are through my phone and apps.

[00:07:17] So what is a lot of the sources you could be paying right like through the app store directly or through the app or online. Where are you signed up? Yeah, it's all that's so disparate. So what are some ways for us to get all these together?

[00:07:32] So I can add up how do I compare to this two hundred and nineteen? Yeah, there's a few different things you could do here. There are services that are apps that are dedicated towards this problem. Rocket money being one of them.

[00:07:50] Their entire value prop is helping you identify and save money on monthly subscriptions. So, you know, if we take a step back again to one of them, we were just talking about how prevalent other problem this is.

[00:08:03] It's a big enough problem that there's an entire company who's only. You know, offer is to help you manage your subscriptions. Yeah, and they're leaving like negotiate for you too or cancel them if you want.

[00:08:17] Like yeah, they do more than just identify right but it's all services relevant to monthly subscriptions. They may be able to get a cheaper rate or they will cancel it for you because canceling is not always a straightforward process.

[00:08:32] Or there's enough of a demand for that type of a thing for a service like that to exist. So that's what we'll call out. Also say just having a monthly budget that you track, sure to identify these things if you are categorizing your transactions.

[00:08:50] Yeah, this helped me the episode we did one episode helps another. The episode we did on budgeting apps. I got the co-pilot app and they have a subscriptions. It automatically pulls the ones that are recurring every month for the same amount from the same company.

[00:09:06] And it gave me a whole list of them. Here's the amount, here's how much your paying for each one. So that's a me a lot of time just by having. Yeah, and then they're not the only ones that do that.

[00:09:17] I'm still in the process of switching from you need a budget to monarch. But this is not a feature you need a budget has, but monarch does where it will automatically identify and group. That's nice. Subscriptions. So that's something there.

[00:09:34] You might have an app that identifies these things automatically. Or you may just be using the app to keep a budget where you're categorizing transactions. And you're going to find that way. I was telling you before I show.

[00:09:46] I have a not my budget broken out into needs wants and goals. But actually have another grouping, another category group called wants recurring. And I actually use that to separate out all of my subscription monthly.

[00:10:06] Or you know all of my expenses filter by that category and see them that way too. Right. And I can just highlight that category and it shows me okay this is how much I'm putting aside every month.

[00:10:15] You know either spending on monthly subscriptions or putting a little bit aside to prepare for enough coming annual subscription. I think some of the credit like credit card companies and banks are getting into this too.

[00:10:29] I think I saw something on Chase for it where they built start to identify the recurring ones for you. Ally might as well. So you can, if you need to you can manually check your statements and see which ones are occurring.

[00:10:44] But there are, I think there are enough ways out there for places to group them for you that you can find out.

[00:10:52] Like the ones that you sign up for on your phone if you need to check manually within the iPhone like if you go into settings and then under your name. There's a thing subscriptions and so you can see them all there and even canceled them there.

[00:11:08] And Android has the same thing in the Play Store. Yeah, so that could be something to it. It would be tough to consciously or you know it'd be tough to consolidate all of your subscriptions through one of those services. Right.

[00:11:23] But if you did make a decision, you were like, okay, I'm going to pay for as many of them as I can through the App Store. You may, you know, that could be a place you checked to. Yeah. All right. So now we've got our total.

[00:11:37] So I'm spending let's say, oh my God, it's it is 300 a month. I didn't realize it, but between credit card annual fees and my streaming services and my budgeting app and my gym membership. I'm at 300 a month.

[00:11:53] I didn't realize that. I thought it would be, you know, 150 maybe. Now what? How do we call this down to the ones yet? There's there's a few. You know, first I would say like take deep breath.

[00:12:10] Don't freak out. They're just because the amount might be higher than you're expecting doesn't mean it's not worth it. You know, it could be there's two kind of pieces of information you could get from this exercise.

[00:12:23] Which is, you know, the overall amount that you're spending could be more or less in your expect to wake up call. And you may also find subscriptions you didn't know about.

[00:12:32] And so those are two different, you know, there may be ones that you didn't realize you were paying for and you don't use or it was a trolley you forgot about.

[00:12:40] And that's something you can just cancel. You know, you know, that's not that that's not something I need to work into the budget. Kind of stupid I was paying for it and not using it, but let's just get rid of that.

[00:12:53] So then you kind of left at that point with the ones that you're actively using. You will feel to some degree the absence if you were to get rid of it.

[00:13:04] I think that's a good actually a good test, like a litmus test of like, will I notice if this is gone or not? That's really good way to decide like because that is basically saying do use it or not. And if you use it, you'll notice.

[00:13:19] I like that. Yeah, so how often you use it is a good measure.

[00:13:25] One way is like if you wanted to get really scientific with it, you could divide out like the per cost per use of like having to charge my using it per month and divide that by the total.

[00:13:39] And it's like, you know, I only watch Netflix once a month paying $20 a month for it. Is that one or two hours I watch it worth the $20? I don't know. Right. That's your own decision, Bank. There's one thing that you could potentially do there.

[00:13:56] This isn't necessarily the case for all of the potential monthly subscriptions like a budgeting app, right? Something like that is intended to be used regularly and for a long period of time.

[00:14:07] But for a lot of the streaming apps, you're not locked in when you get the monthly subscription. Yeah. I know people personally that when something comes out or show they watch the new season comes out, they sign up again.

[00:14:22] And they pay for a month of Netflix, they've been into the show and then they cancel a subscription until something else comes out that they want to watch. They're not using it to watch office reruns or parks and wreck and things like that.

[00:14:38] I think those are probably bad examples because that I'm not sure they're even on Netflix anymore. But they were at one point, but you get the idea, you could maybe is this something that you need to be paying for every month?

[00:14:51] Is it possible that you could potentially get the same amount of use you're getting out of it with doing less than 12 months a year type of good idea? They'll often like keep your account too.

[00:15:04] So it's not like you have to recreate an account every time you just re-subscribe. They'll probably be sending you things to re-subscribe in the meantime too. Please come back. Sometimes you can get good deals.

[00:15:19] Another one is that all these companies are getting together and consolidating for better or for worse, but there are a lot of bundling options now, where you could get like Disney, ESPN, Hulu all together.

[00:15:34] If you're actually using all of those, maybe you're subscribed to all them separately right now, then it's a little less for each one per month if you bundled them together. So see if the services that you're using are in any of the bundling options.

[00:15:54] Right, we're back to the days of the cable bundles. It's it's coming back. There's a new one that just got announced. It's I think it's peacock, Netflix and Apple TV. They're getting together in their own bundle.

[00:16:09] So yeah they're out there but you might as well take advantage of if you can. If you have those together at least they're less expensive. We were talking about this before. I think a good one is that some of them offer discounts for annual subscriptions.

[00:16:26] So if it's something you definitely use, you may get what a few months free or something for paying for it all at once. Right. In that discount there's some of our bigger than others for the annual subscription.

[00:16:39] But that savings pays potentially pays for some of your other subscriptions. Yeah, you can bundle and keep everything you have because you do use them. One thing I've talked about this before one thing I would recommend for those annual subscriptions.

[00:16:57] Whether that is your budgeting app or a credit card annual fee or Amazon Prime. If you're paying for it annually, I would still break it down monthly in your budget.

[00:17:11] In every month, put one to 12th of that away so that the next time the annual subscription fee rolls around. You already have the money set aside to pay for it. It's not a huge expense just for that month.

[00:17:27] Right. And because it rates easy to justify the annual subscription if you know you're going to use it because of the savings. But you don't want to forget about it and then get hit with a surprise.

[00:17:36] It's how much multiple hundred dollar charge a year from now because you forgot to forget that the cost is coming back up. Cool. All right, so I think that's that's the spring cleaning exercise is being intentional. Do I use this or not? Is this worth keeping or not?

[00:17:57] Just shining a light on all of your subscriptions and giving them a place within your budget. I mean, you're probably affording all of these right now. So I'm not going into credit card debt with all these subscriptions.

[00:18:12] But you're affording it. It's really just like that money could go, I'd rather go towards other things. And so this is the opportunity to cancel the ones you're not using. You mentioned earlier sometimes canceling can be annoying.

[00:18:26] They make you jump through hoops because they really don't want you to cancel. But they have to let you. So cancel the ones you're not using. I often find when I go to cancel a subscription they'll say,

[00:18:43] Wait, we can we can have the price or we will give you because to them the hosting is not that expensive. This is true, especially with like New York Times, Series XM, like these companies where it's not expensive to offer it.

[00:18:59] They'd rather get a little something from you than nothing. Maybe the price is for New York Times for me. The price is worth it at $5 a month, but not at $20 a month. And so when I go to cancel they give me that price again.

[00:19:12] So you might get a discount or free months if you go to cancel, but you gotta be willing to cancel if it's not worth it at the full price. Yeah. I said, and don't be afraid to cancel. No, your options. You can always re-sign up. Yeah.

[00:19:30] One thing I would keep in mind if costs have changed be aware that you may not be able to sign back up. If you're grandfathered in at a lower rate. Oh, yeah. A try to discourage canceling but if you are going to strategically cancel,

[00:19:49] look at your subscriptions holistically and maybe using comparisons which ones could I sign back up at? At the same price I'm currently canceling. Is that going to inform your decision on what direction you go? All right. So we've identified them with cancel the ones we don't want.

[00:20:09] Now we gotta ask, how do I prevent this from happening again? And how do I limit the amount that gets added as new cool subscriptions come out? And I want to sign up for something and this show comes out on this service.

[00:20:24] How do we prevent the accumulation of all these monthly subscriptions? One idea is to, if you're signing up for free trials for something, set a calendar reminder for when that free trial is ending. So remind you to cancel it before you're being charged.

[00:20:43] They're relying on the fact that you'll sign up and forget to cancel before you get charged. And that's how they, you know, renew renew. It's happened to me with audible. It's happened with a lot of them for me. You can just forget to cancel it.

[00:20:58] And so now I've started sending calendar reminders. What else would I also think you can do that? That's, I was just saying that's big one for me too. I because of the budget and then the monthly, you know, I usually sand top my expenses monthly.

[00:21:14] But that doesn't mean I'm remembering to cancel it. You know, I noticed the first month of them charged. Like a crap. I got charged. Yeah. If that does happen oftentimes, you can potentially cancel and get some of that money back,

[00:21:30] especially if there were new will hit at an annual rate. You know, and you're only a couple days into it. You can potentially cancel, so that's something to look into too. Another thing I do is look for subscriptions that you're using that have family plan offerings.

[00:21:49] Spotify, for instance, can let you buy it up to five people can use that Spotify account or what 15 bucks a month. Yeah, I guess price prices have gone up a little bit around there. That's what you do.

[00:22:03] You know, even for two people, it can be cheaper to have that family bundle. And if you have up to five or six or whatever the number that the service lets you split between, can get even cheaper. Yeah, you're saving a few bucks a month per person.

[00:22:19] Do that across a bunch of subscriptions and there's some of them are paying for themselves. Right. A lot of companies are getting a stricter on this like the whole Netflix. If you ask go with sharing households.

[00:22:32] Yeah, but the ones take advantage of the ones that do allow it while you can. I would say. Yeah. A lot of independent some of the like some of the budgeting apps we've mentioned support. Multiple accounts on the same or multiple users on the same account.

[00:22:51] You need a budget in monarch. I know both do that. You basically can each have that service for the same price. I think the on we always say this ongoing.

[00:23:04] But the ongoing maintenance to make sure you don't get caught off guard again is to every month as part of your monthly budget. Look at all your subscriptions and do this sort of audit like did I use this month? Am I planning to use it the next month?

[00:23:21] That's probably the best way to prevent all of this build up, right? Yeah, I think if you're in a spot now where you really have no idea how many you have and then this is kind of you maybe you do want to do a spring cleaning type audit.

[00:23:36] You're looking at the past year and evaluate it. But I think a lot of these problems are addressed with some of the other good financial habits we've covered on the podcast. If you're keeping an eye on your spending.

[00:23:52] If you're budgeting your categorizing transactions, you should notice these things and then maybe the issue then is just having a plan for what you do when you notice recurring subscription. Yeah, that's good. Because you definitely could be like, oh man, Netflix again. I'll get around to this month.

[00:24:12] I should stop paying for that. But then you just cancel Netflix wasn't on your plan for the day doing your budget was. That never ends up happening. So maybe go into that process with the intention to cancel anything you need to be canceled. I like that.

[00:24:31] Also, if you are relying on credit card, I could see someone could just be paying them monthly minimum on their credit card and is afraid to look at where they're spending. Those subscriptions can definitely build up. So I was one of those if you are.

[00:24:51] Keep an eye on what you're spending for month, you're paying off your credit card in full every month. I think all these are all these good habits are going to make you less likely. All right, so it's getting intertwined budgeting the budgeting apps.

[00:25:06] Yeah, it's like where the questions crossover. The marvel the Avengers are coming together. It's all building the foundation for good personal finance. Yeah, we may have known. No, not a little bit what we were doing when we said that.

[00:25:22] All right, so good luck doing your spring cleaning your audit. I know this exercise helped save me. I'm up to like almost $50 now. But I'm saving per month in subscriptions that I found that I didn't remember or know about. So good luck with yours.

[00:25:38] Let us know if you have any questions about canceling and please subscribe. Comments, rate the podcast and we will see you in the next one. Thanks everybody. You've been listening to the more sense than dollar podcasts.