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How to escape the monthly subscription cycle

Written by:
Accredited Financial Counsellor Canada® & Certified Professional Financial Coach

It’s no secret that businesses do what they can to stabilize their monthly income. Many are using the monthly subscription model to help with this. It’s not shocking that there are monthly subscription services to just about anything. The options vary from movies and sports channels to subscription boxes filled with treats for your four-legged friends. What may surprise you are some of the statistics from a recent survey about subscriptions conducted by Hardbacon!

Let’s break down some of the survey’s most unexpected highlights. Then, let’s dive into how you can break free from these statistics if you see yourself in them because we all want to save money!

How are we paying for our subscriptions? 

While the payment method you use doesn’t impact the cost, it can impact our awareness of our subscription costs. Expenses tend to have a greater impact when they come out of our bank accounts because they are more immediate. Using your credit card can also potentially lead to extra fees as well. It’s worth keeping that in mind next time you sign up for a new monthly charge. If you want to try out a new way of paying, here’s a breakdown of the most common subscription payment methods.

  • Credit card payments were at the top, with 47%
  • Visa or Mastercard debit, at 27%.
  • PayPal at 11%
  • pre-authorized debits at 7%
  • pre-paid credit cards and others both coming in at 4%.

How many is too many?

While there’s no definitive answer to how many is too many, A good rule of thumb is if you don’t remember all your subscriptions, you’ve got too many! Respondents initially thought they had an average of 4 monthly subscriptions. When they started to indicate which subscriptions they had in specific categories, they actually had an average of 8! As a little icing on the cake, 66% of respondents have paid for a subscription they didn’t remember they had!

How can you take action?

Take 10 minutes to do a household subscription audit. 

  1. Review transactions for the last month for your bank accounts and credit cards.
  2. List out each subscription. Include the date and amount for each one.
  3. Review the list and decide if you are getting the value out of each one based on the monthly cost.
  4. List any you are ready to cancel because you aren’t using them at all, or enough to make the cost worth it.
  5. Set aside time once a year to review and manage your subscriptions and avoid any recurring payments for things you aren’t using. Subscription management isn’t fun, but taking the time to review them will save you money in the long run. 
  6. Bonus points to you if you are also looking at your bank fees and charges during your review! If the fees are more than you anticipated, maybe it’s time to consider a digital banking option.

I tried to cancel but…

The survey shows that we often want to cancel, but the businesses that dip into your money each month don’t want you to do that. The results showed that the complex process of cancelling delayed 55% of respondents from ending their subscriptions. A few of the biggest hurdles were, 32% couldn’t find the option to unsubscribe and 28% said the number of steps to unsubscribe was excessive. All this to say, it’s not you! Don’t blame yourself or be hard on yourself. Stick with it. It’ll be worth it in the end.

Top cancelling tips! 

First, it’s all about the timing, as 73% signed up for a free trial or promotional offer and never cancelled. We all love to get something for free or for a great deal, but that is often how they get us. To avoid charges after the free trial or promotional rate ends:

  • Add a reminder to your phone to cancel when the promo period ends, and give yourself 3 or 4 day’s notice so you have a little wiggle room.
  • As soon as you sign up, see if you can cancel right away and still get access until the promo ends. If you can, jump on it, and don’t wait to cancel!
  • Go in knowing that in some cases cancelling can take some determination. Don’t let up until it’s done.

As someone who recently thought I had cancelled and later found out I had missed a step, here are my recommendations.

  • Have a clear list of any subscriptions you want to cancel.
  • Set aside some time to cancel them, and try and make it enjoyable. Grab a coffee, invite a friend to a subscription-cancelling hangout, or put on a good show (maybe using one of your subscriptions).
  • Start with the subscription that will have the payment coming out next.
  • Dig into your account and review how to cancel each one. Some are easy to cancel through their mobile app. Others are easier to cancel by finding options online through your web browser.
  • Commit to staying the course until your list is complete. You can even add an extra motivator so that when you do, you get a little treat.
  • If you can’t find the cancel option check out the help centre, look for an online chat, or a specific email address for cancellation requests.
  • Some subscriptions made through the app store need to be cancelled there as well.
  • Double-check that you have cancelled everything on your list because there can be sneaky steps we miss.
  • Keep an eye on your bank account and credit card transactions to confirm you’re no longer being charged.
  • If you are charged, triple-check that you have cancelled, and then if you have, reach out about getting a refund and making sure you aren’t charged again.
  • Even if you find out you didn’t actually cancel, you can always reach out and see if they will refund you. You never know unless you try.

    The final word

    Cancelling subscriptions isn’t going to get you rich. That being said, spending 30 minutes to cancel a $20/month subscription will save you $240/year. That’s a really good return on your investment of time! That’s a good chunk of money that could be used in a lot of different ways. You can buy two fancy coffees/month, reach a savings goal even sooner, or pay off high-interest debt.

    Cheers to saving money by whittling down your subscriptions!

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