How many subscription services do you use, and how much are you paying for them each month? You might not know the correct answer to those questions, and that’s a problem. Americans are spending more on subscription services — some that they don’t even use — and it’s impacting budgets in a big way.
According to a study by the McKinsey research firm, 46 percent of Americans subscribe to at least one streaming service. The same report found that the e-commerce subscription market has ballooned by more than 100 percent over the past five years. But while more people are subscribing, they still don’t know how much they’re spending. CNBC reports that one study of subscription services found 84 percent of people underestimate what they’re paying. When the study’s participants were asked to guess how much they spent on subscription services per month, the average estimate was $79.74 a month. Yet when the researchers mentioned specific services, like Netflix and Spotify, the guesses increased to an average of $111.61.
The problem with subscription services is that the charges are often small — $5 here, $10 there — so you don’t consider them a problem. Then, little by little, those charges add up. The other issue with subscription services is that they take a big chunk out of your paycheck every month, leaving you with fewer options and less to save. The good news is the solution to this problem is fairly simple. You just need to track your subscriptions and eliminate the ones you don’t use. If you find that you miss using the service, simply add it back. Monitor your subscriptions monthly and chances are you’ll end up saving some cash.
This article was originally published by Chris O'Shea on SavvyMoney.com