Updated: May 10, 2019
Companies love this and so do you.
You love it because your life is made easier with products / services being brought to you for a quick and easy monthly fee in replace of what used to be a single transaction. All without you having to worry about remembering to pay the bill via an automatic credit card charge. And companies love it because of greater revenue visibility. (See: higher valuation for de-risking future revenue growth). This seems to be a match made in heaven!
Monthly subscriptions appear to be the solution to the millennial crisis of actually having to run their own errands and god forbid, monitor the mail and make sure to physically write a check on time to not incur any late fees. But in reality, companies have designed this concept to ensure they get paid, even if you don’t actually use their services every month. Sounds pretty sweet to me.
This can be deadly, especially to your bank account and credit score.
Due to the automatic and stealthy nature of it all (automatically charging your credit card and then having credit card auto pay), these monthly subscriptions could be slipping under the radar and you could be blissfully spending a lot more than you realize. The individual charges are relatively small (Amazon Prime $12.99, Hulu $5.99, iPhone $37.00, Apple Music $9.99, meal kit $120.00, gym ~$175, personal styling ~$50) but can add up quickly for things that are not regularly used to their full capacity. Cue the "to die" for lush robes at the gym. I’m sure I’m not alone in fantasizing about roasting myself in the perfectly clean (and empty) gym sauna to rid myself of last night’s endeavors, after taking the *included* pilates class four times a week. But in reality, who has that kind of time to actually take advantage of all the gym perks and amenities that warrant the $175 monthly fee.
Don’t get me wrong, some services are beneficial to our lives and wallet, but be buyer beware: if not regularly used to their full capacity, monthly subscriptions can be a huge money suck that can go dangerously unnoticed.
Take a few minutes to look at your credit card bill and see where you are shelling out money on monthly basis. If, in this process, there are services you’ve forgotten about, these could be great first candidates for the chopping block. Others may be more difficult to get rid of (yes that sauna does sound great right now), but at least your making an informed choice, rather than having another monthly stealth charge. Sit down with yourself to see how often you actually use the product / service and figure out what the “per use” value is (monthly fee divided by the number of times used per month). Keep it around if that fee seems reasonable.
Regardless if you don’t spend hundreds a month on subscriptions, actually taking the time to review and identify them could save you hundreds a year, which could add up: enter Euro trip 2020.
How much do you spend in monthly subscriptions?