Will Elon Musk be the straw that broke the monthly service fee payments back?
Probably not, as way too many Americans keep shoving money to the center of the service fee table. A case in point: Musk’s $8-per-month “blue check for the masses” gambit will surely have plenty of takers.
That’s the problem for forgetful subscription consumers.
The fact is, monthly fees are so easily obtained and can stack up so gradually, consumers may not realize they’re paying so much for those Amazon Prime, Apple TV, and New York Times (among others) monthly subscription fees.
According to a recent survey by the market analysis firm C&R Research, the monthly subscription cost U.S. consumers an average of $219 every 30 days. A separate study from Statista showed U.S. adults have an average of 12 monthly subscriptions, with millennials averaging 17 subscriptions on a monthly basis.
As crazy as that sounds, most Americans aren’t aware they owe so much cash for their subscriptions. The C&R study noted that survey participants believed they only owed about $86 per month for subscription fees – $133 less than they actually owe for those fees. Plus, with so many of those subscription fees on a consumer’s auto-pay account, 42% of all subscribers weren’t aware they were being charged for the service.
“If you can’t remember all the monthly service fees you pay without checking your bank statement, you probably have too many,” said SuperMoney.com financial planner Andrew Latham. “Feeling anxiety over your monthly service fees is another red flag for a consumer who needs to start making changes.”
Tackling Too Many Monthly Subscription Fees
There’s an old British military quote that says “Who dares, wins. Who sweats, wins. Who plans, wins.”
So it goes with your fight against aggressively accumulating monthly subscription fees. With a robust action plan and disciplined execution, you can curb, if not eliminate, those annoying monthly subscription plans.
Here’s a tips checklist to do just that.
Know where you stand. For starters, look through your monthly service fees (check your bank statements for the best results) and see how many subscription services you have.
“Then determine which services you absolutely can’t do without and consider paying for those on an annual or even bi-annual basis,” Latham told TheStreet. “You can often get substantial savings by paying in lump sums.”
Start scaling back on services you don’t need or use. Now it’s time to begin thinning the herd and canceling subscription services you either aren’t using or don’t need.
“For example, you really don’t need Netflix in 4K when you don’t have a high-end TV to match it,” Latham noted. “It’s also a good idea to negotiate with service providers for a lower fee or even share an account with a friend or relative.”
Hit the pause button. If you’re not sure whether a monthly service fee is worth the cost, take a break from the service for a month or two. “You may find you can do just fine with free alternatives, such as a library card, or an account with a free streaming service like the Roku Channel or Tubi,” Latham added.
Always keep an eye on costs. It’s always a good idea to check services that may have increased in price. “I recently negotiated lower cable and satellite radio prices just by calling customer service and asking for my old rates back after introductory promotions expired,” said Bankrate senior industry analyst Ted Rossman.
Go the DIY route first. While there are good mobile apps that help manage monthly subscription fees, try blazing your own subscription-curbing path first.
“There are some services such as Trim and Rocket Money (which absorbed the service previously known as Truebill),” Rossman told TheStreet. “However, they charge fees, so follow a do-it-yourself approach if you can.”
“It’s ironic to pay a subscription fee to help lower your subscription fees, but some people do find it useful to automate the process and get some outside help,” Rossman added.
While you’re at it, look for bigger savings. Once you’re in full-bore savings mode, go up the ladder and review your larger monthly payments to really save money.
“Monthly subscription fees can certainly lead to a lack of cash flow, but it’s not the automated expenses that are causing cash flow issues for people, it’s the manual ones,” said Carson Allaria Wealth Management partner Joe Allaria. “Cars, homes, travel, and food purchases are all non-subscription expenses that have made by far the biggest dents in many of the troubled budgets I’ve seen.”
That’s especially the case with Americans who are having cash flow problems.
“If you’re in that scenario, get rid of your $500-plus per month car payment, quit booking expensive vacations, and stop eating out so much,” Allaria said. “It’s much easier to shave multiple hundreds or thousands off your monthly budget by making a few big changes rather than trying to cancel every subscription you have, only to free up a small amount of cash flow at the end of the month.”
- Five Tips on Curbing Monthly Subscription Fees
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