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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.
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
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
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
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
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.
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