The contents provided on this page are for informational purposes only and do not constitute financial advice.
Did you know that subscription services date as far back as the 1800s?
The concept of subscriptions started with payment for the regular delivery of everyday essentials, like milk and newspapers. These days, everything we consume seems to be offered on a subscription basis - from streaming services and gym memberships to food and grocery deliveries!
But while the cost for a single subscription service may seem nominal, it can quickly and easily add up if you’re signed up to multiple services.
With rising costs and inflation, it’s a timely opportunity to spring clean your subscriptions. Here are 4 reasons to consider reviewing your subscriptions and some ideas for how you might be able to save.
1. Subscription services can add up
More subscription services have emerged since COVID-19 lockdowns as businesses looked for alternative ways to deliver goods, services and value to customers. The increased variety of these services means people have also been spending more on subscriptions.
A 2021 research study found that 78% of Australians have at least one subscription service, which grew throughout COVID-19 lockdowns. A ME Bank Customer survey revealed that more than half (52%) of Australians signed up to more subscriptions during lockdown, and it all adds up.
Recent Beforepay spending insights from May to July 2022 shows registered Beforepay users currently subscribe to entertainment streaming services, food/meal services, and health/gym memberships.
On average, Beforepay registered users are found to be spending $35.05 per month on streaming services, with the most popular being Netflix, followed by Spotify and Stan.
The same data showed Beforepay registered users who had a health/gym membership were spending an average of $80.04 every month, while those who subscribed to food/meal subscriptions were spending an additional $83.46 per month.
If we consider one person is subscribed to all of the above ($35 on streaming services, $80 on a health/gym membership, $83 on food/meal subscription), that’s a potential monthly expense of $198 per month that adds up to $2,376 across the year. And with the cost of living on the rise, as the August 2022 Beforepay Cost of Living Index revealed a 25% month-to-month jump in daily spending to $83.27, this could eat even more out of your budget.
Considering how multiple subscription services can add up, it’s worthwhile reviewing your subscriptions so you can be certain you’re getting your money’s worth.
What you can try
- Review your subscriptions to understand how much you are spending, prioritise the services you need, and identify services you may be able to turn off because you’re only using them once in a while. You can do this by looking at past transactions on your bank statements, or using the Insights dashboard in the Beforepay app.
- Budget for your subscriptions. It may help to carve out a spending category for subscriptions as part of your budgeting process. This way you can have a more accurate understanding of the way your money moves, streamlining how you track your income and expenses, making it easy for you to plan and adjust your spending as you need to.
If you don’t have a budgeting app or system already, you can use the free budgeting tool in the Beforepay app.
- Use one account to pay for subscriptions. Whether it’s a debit card or credit card, having all your subscriptions come out of one place will make it easier for you to monitor and review them later.
2. You may have stopped using one of your subscription services (and forgotten!)
Because subscription fees seem so small in comparison to larger and more frequent expenses, like bills and groceries, it can be easy to let them tick over every month without questioning them. But what if you were paying for something you’re not actually using?
Let’s take the gym membership costs above as an example.
If you signed up to an $80/mo gym membership in January because your New Years’ Resolution was to get fit (we’ve all been there!), then stopped going after 3 months, you could potentially be losing an extra $720 a year.
ME Bank found that over a third of Australians were losing $200 annually on unused subscriptions. This figure increased to $570 for those aged 35-54, with most people saying they had simply forgotten about at least one recurring subscription service.
One common reason you might lose sight of what you’re paying for on a regular basis is the way subscription services offer direct debit and auto-renewal options when you sign up. This set-and-forget approach means you can literally forget about that thing you signed up for six months ago and still be paying for it without realising.
What you can try
- Consolidate your subscriptions so you’re not paying for multiple platforms that provide you with the same service. For example, if you are paying for a number of entertainment streaming services, stick with the one that gives you the best value for your money, and cancel the other. This will not only help you cut costs, but can also help you declutter the number of things you need to keep track of in life!
- Check for auto-renewal settings on your subscriptions. Auto-renewal does make the payment process much smoother, so you might not want to turn it off, but you could consider putting a reminder in your calendar for a couple of days before your regular payment is due. This way you’ll be prompted to evaluate and be more mindful about your subscriptions on a more regular basis.
- If you subscribe to a digital service, it might show up in your App Store or Play Store subscriptions. This gives you a quick and easy place to view and manage your subscriptions. To check your subscriptions in:
- iOS - Open your Settings app > Tap on your name at the top of the screen > Tap on ‘Subscriptions’
- Google Play Store - Open the Google Play app > Tap your profile icon in the top right of the screen > Tap on ‘Payments and subscriptions > Tap on ‘Subscriptions’.
3. Subscription services are changing
As more people look to switch off their subscriptions to cut costs amid rising inflation, subscription platforms are changing up their services to offer more cost-effective alternatives.
Netflix, for example, is expected to release an ad-supported plan option to offer viewers a lower monthly rate. This could be a great option if you don’t mind sitting through a few advertisements while watching one of your favourite shows.
Other services may also start to move towards bundled subscription packages, which means you could get access to more for less. Amazon Prime is a good example of this, offering customers free shipping, music streaming and TV/movie streaming services for a single subscription fee. For some, this one-stop shop solution may not only be a cheaper option, but even more convenient than managing multiple subscriptions.
What you can try
- Shop around for subscriptions that will give you the most bang for your buck. Think about what you really need, the value and convenience you are looking for in a subscription service, and where you can compromise if it means saving money in the long run. For instance, if you can accept hearing a few ads between your favourite tunes, you could save on monthly costs by opting for a free plan instead.
- Use comparison sites like finder.com or canstarblue.com.au to compare prices on various subscription services. These websites do all the work for you to simplify the process of finding a service that works for both your wallet and your lifestyle!
- Look for subscription options that offer multiple services in one platform, like the Amazon Prime example above. This could help you consolidate your subscriptions and save by paying a single, slightly higher fee than multiple mid-range fees.
4. You could save money on subscriptions by changing how you pay for them
Subscriptions typically come with a periodical payment structure (weekly, fortnightly, monthly, annually) that you agree to when you sign up. This gives you the flexibility to change or cancel how your subscription is set up before your next scheduled payment date.
For instance, some services offer family plans or annual subscriptions that work out to be more affordable than paying for something on your own, on a regular basis. With subscription services, it’s easy enough to shift to one of these payment methods when you need or want to.
Changing the way you pay for subscription services means moving away from the “set-and-forget” mentality and being more mindful and deliberate when it comes to what you’re using and how you’re paying for them.
What you can try
- Take advantage of free trials and try out different platforms before committing to one. This can help you save on extra expenses upfront, and determine what you really need and want, before actually laying out any money.
Just make sure you set a reminder to cancel your subscription before your trial is up so you don’t end up accidentally paying for a service you don’t actually want or need.
- Share your subscriptions with family (pending T&Cs). That way you can each pitch in a smaller amount of money and maximise your use of the service.
- Stick to one streaming platform and pay for an annual subscription. The upfront payment may look steeper than a monthly fee, but can actually work out cheaper in comparison because some services offer a discount if you pay annually.
For example, the minimum monthly cost for Disney+ in Australia is $11.99, which adds up to $143.88 over the year. They also offer an annual subscription at $119.99, which works out to a saving of $23.89, or 16.6%.
If you need a boost, you could also consider Cashing Out with Beforepay for a fixed 5% fee to help you pay for your annual subscription now, so you can enjoy saving the extra dollars later!
Subscription services offer convenient ways to access what you want, when you want it, but this also means it can be easy to spend more than what you need to.
Taking stock of your subscriptions now can help you make the adjustments you need so you can save later.
Some of the things you can try to help save on your subscriptions are:
- Review your subscriptions and pause or cancel those you’re not using frequently.
- Put a reminder in your calendar a few days before each subscription is due for renewal so you have enough time to evaluate and cancel a scheduled payment if you find you’re not using the service.
- Consider subscription services that offer multiple services to ensure you get the most out of your money.
- Think of different ways to pay for your subscriptions that will save you money, like sharing a subscription with family or shifting to an annual subscription.
Disclaimer: Beforepay Group Ltd, ABN: 63 6933 925 505. Beforepay allows eligible customers to access their pay and provides budgeting tools. Beforepay does not provide financial products, financial advice or credit products. The views provided in this article include factual information and the personal opinions of relevant Beforepay staff and do not constitute financial advice. Beforepay and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this blog post and do not accept any liability for any loss whatsoever arising from the use of this information. Please read our Terms of Service carefully before deciding whether to use any of our services.