We all know auto pay is super convenient. It means one less bill we have to worry about—and not having to relive that time when we, um, forgot about our electricity bill and spent days in the dark. Opps. It can even serve as a good way to build up your credit score. But, with endless subscriptions available there’s a good chance you’re overdoing it. As in you’re very likely throwing lots and lots of money down the drain every billing cycle. Worse, you probably don’t even realize it.
It’s easy to forget about how quickly we accumulate subscriptions that aren’t crucial. Think about all the magazines you get every month, gym membership fees, your ultra convenient meal plans, your Amazon membership, and maybe your top secret porno subscription (we won’t tell your mom). With all these subscriptions it’s easy to be spending money every week, month, or year, without even noticing until suddenly your checking account is a total bummer.
So, how do you save money on subscriptions?
- First, it’s important to do an audit of all your recurring bills and subscription services. Here’s how:
- Print out a copy of the last six months to a year of your bank statements
- Highlight every bill that’s a recurring payment
- Split them into two categories: essential and non-essential
- Then, give each non-essential bill a ranking of 1 to 3
A score of 1 means you have not used the service in the last 3 months or longer. A score of 2 means you’ve used the service within the last 3 months but it’s been sporadic, at best. Finally, a score of 3 means you’ve regularly been using the service. Basically, it’s moved from non-essentialinto part of your routine.
Cancel the 1s and work through the rest. Do this methodically to make sure you follow through because you might have to deal with customer service.
Since you likely won’t want to part with anything marked a ‘3,’ the next best thing is to look for competitive services offered by another company. But, if you’re planning on keeping these services, you’ll want to allocate a recurring category for them in your weekly and monthly budget. It’s easy to overlook these recurring bills and then have them cut into your budget when you need extra funds the most. (We once had a surprise yearly magazine subscription hit us when we were low on funds and it was not pretty.)
Next, ask yourself whether anything marked a ‘2’ is something you can fulfill in a different or cheaper, way. For example, can you go running outside instead of sporadic visits to the gym?
Ask yourself the following questions for each subscription:
To ensure you don’t fall into the same money-guzzling trap next time, note the start and end times for any trial periods and mark it on your calendar. Set a calendar alert on your phone to remind you of your “subscription end date.” If you plan ahead, you’ll have a checkpoint ~plus~ a date to re-assess whether that subscription sock service, meditation studio membership, bacon of the month club, or whatever, is something you truly want.