See more from Finance

Advertiser Disclosure

Why You Need To Take A Closer Look At Your Monthly Subscriptions

Spread the love
Jaime Mountford Article August 12th

I remember when I was a little girl, my grandmother always gifted me a subscription to a magazine for Christmas. For a few years, I received Highlights, then Ranger Rick. Eventually I moved on to more “sophisticated” magazines like Teen.

I loved getting those magazines in the mail every month. I read them cover-to-cover and saved them in big stacks in my room. I don’t know if it was the monthly anticipation or the actual glossy paper in my hand, but they were special. 

Back then, magazines, newspapers, and I suppose cable TV (we didn’t have it) were the main things to which people subscribed. The internet was new, online shopping didn’t exist, and shipping still cost a lot of money. 

Not so today. You can get a subscription to pretty much anything you want. Paper magazine and newspaper subscriptions are actually on the decline, but online entertainment, phone apps, and cute little packaged products top the lists. 

How many subscriptions do you have? More importantly, how much do you spend on them? It just may surprise you. 

Subscriptions in Numbers

A study by West Monroe determined 84% of people grossly underestimate the cost of their subscription services. The average monthly cost was $237.33 a month, whereas people guessed closer to $80. 

However, when I dug closer into the study, I realized they included mobile phone and Wifi services, which account for $150 of the average. I am not begrudging anyone those 2 highly used services, so I am ignoring them. 

But what about the remaining $87.33 on average? This includes movie, gaming and music services, monthly boxes, food services, and phone apps. 

In fact, 46% of consumers subscribe to an online streaming service, while 15% anticipate a monthly subscription box delivered to their door.

Here’s where things get real. Even we are not immune to these subscription traps. We have paid for Netflix, monthly toothbrush kits, kids’ subscription boxes, and fitness apps. 

Is this all bad? Should we cancel everything and return to in-store shopping for every item and rent movies one-by-one?

Not necessarily. But there are some questions to consider for every subscription service, whether you have just signed up for it or have subscribed for years.

The Tough Questions

  1. How often do I use this service?

I ask myself this question regularly. We used to get DVD Netflix service because the movie choices were so much better than streaming. But we rarely even watch movies. When I did the math, I realized each disc was costing as much to “rent” from Netflix as purchasing it would, since it took us so long to watch it. 

So we cancelled it. Now, we have free Netflix streaming through our T-Mobile phone service, and if we just must watch a movie that isn’t on it, we rent it from Amazon Prime. 

Speaking of Amazon Prime, we use that regularly, some for streaming, but mostly for free shipping privileges. That’s a subscription worth keeping, for us anyways. 

What about you? If you objectively look at how often you use a subscription, what does it cost you per use? That game app on your phone—maybe it cost $5 a game. Or that old streaming service—when is the last time you even used it?

  1. What is the cost versus value? 

Many of the subscription boxes are really not worth the money they cost. There may be some value in convenience, but it is hard to justify an expensive subscription service just to save you some time. 

Let’s talk about Blue Apron, for instance. I have never subscribed to a food box service like this, but I did have Blue Apron gifted to me for a several day trial. And what an eye-opener.

Their website touts “starting at $7.49 per serving.” First of all, that is a lot of money per person, per meal. And secondly, a serving is NOT what you envision. This is not a heaping restaurant portion—it is the proper amount specified by packaging. 

The trial boxes I received had things like tiny little bags of lentils, one carrot, and a few ounces of meat. Once I waded through all of the wasteful packaging, it was like a joke. 

Trust me, food subscription boxes are an incredibly expensive ripoff. Just go grocery shopping—you can purchase easily twice as much food for the same price. 

However, we have had a subscription box we really loved. We got MEL Science chemistry kits for our son. They were a little pricey, but the value of the activities and chemicals (which would be difficult to obtain otherwise) made them worth it. 

Look at your own subscriptions. Okay, maybe it’s fun to receive a box in the mail, but are those dog toys or trial-sized beauty products really worth the money?

  1. Is there a free version?

This one is almost a no-brainer. Why pay for something you can get for free? Many services (streaming, music, apps, games) offer free versions. They usually include annoying ads, yes, but unless you are spending an exorbitant amount of time using it, a few ads won’t kill you (or your wallet). 

Also beware of free trials—they end, suddenly costing money you may not even remember you are spending. Avoid them if at all possible, and look at your credit card statements monthly for random new expenses. 

  1. Am I just being a consumer?

This is probably the most heart-searching question. It’s easy to count the frequency or value of a service to objectively justify (or not justify) spending money on a subscription. 

But asking yourself if you have been suckered into a consumerism trap? That’s a little touchy. 

I almost fell for this one: all my friends were talking about their StitchFix subscriptions, and how their adorable outfits came in the last box. I thought to myself, “Maybe I need to get this, too.”

So, I researched it, went through the whole litany of questions about style, size, etc., and then came to my senses. I did not need to have new clothes delivered to my door every month. I have a closet with plenty already. 

If you find yourself purchasing subscriptions because it’s trendy, step back a minute. People living a Minority Mindset aren’t trendy—they are smart. Smart enough to recognize when they are wasting money on a consumerist lifestyle. 

Ask yourself: Am I just being a consumer? Does this subscription make me smarter, truly save me time or money, or really help me fulfill my financial/career/recreational dreams? If not, cut it. 

By next month, you probably will forget you even received it anyways.

Life Beyond Subscriptions

Once you have greatly reduced the number of subscriptions you receive, you may notice you have extra money floating around. Great! That is partly the point. Put the money towards your emergency fund, investments, or other immediate savings goals. 

Or have fun with it. Only make sure what you do is worth the price, time, and packaging involved.

Contributor’s opinions are their own. Always do your own due diligence before investing.

Keep Reading:

Get Richer Sleeping eBook & Financial education emails

More From Finance