How to manage subscription overload

[November 15, 2022]  By Chris Taylor

NEW YORK (Reuters) - For Michael Whitty, it all started with one question: "I wonder how much this is all adding up to?"

That is what the Chicago estate planning attorney asked when he kept getting email notifications about subscription renewals. For a few apps, some magazines, wine sites and software charges, "I was spending something like $150 a month on subscriptions," he said.

That prompted Whitty to create the mother of all spreadsheets, tracking every single subscription. Nowadays he can sort them by price, frequency and importance. It has helped him chop a bunch of them since last year, saving him hundreds of dollars.

The flood of small monthly charges is no accident. Many companies have moved toward a subscription-based business model, which not only ensures an ongoing revenue stream, but banks on you probably not paying attention to those fees.

Americans on average had 12 paid digital/entertainment subscriptions in 2020, according to Statista, which tracks consumer data.

"No wonder people forget about a few," noted Teresa Murray, consumer watchdog for the advocacy organization Public Interest Research Group (PIRG). "Up to 60% of consumers in various surveys say they've forgotten about at least one recurring monthly subscription."
 

When budgets are stretched, and the price of everything seems to be going up, the last thing you need is a guaranteed monthly charge that will continue in perpetuity.

Here are few ideas to manage subscription overload:

USE A SERVICE TO HELP YOU

Not everyone can be as meticulous as Michael Whitty in creating a spreadsheet. But some services like Rocket Money, formerly Truebill, help you. The app links to your accounts, identifies recurring charges, and tells you how to cancel them, or even does it on your behalf.

"When you see all your subscriptions in one place, most people are shocked at how many they have," said Yahya Mokhtarzada, Rocket Money's founder and chief revenue officer.

Rocket Money's users have saved over $150 million since its launch in 2016, he said. "One study found that people are spending around $200 a month on subscriptions, but only think they are spending $80."

Members exercise inside Chelsea Piers Fitness, Manhattan's largest fitness facility on the first day of the re-opening of gyms in New York City following the outbreak of the coronavirus disease (COVID-19) in New York, U.S., September 2, 2020. REUTERS/Mike Segar/File Photo

AVOID FREE TRIALS

These are the gateway drugs of monthly subscriptions: You sign up because there is no initial payment, which sounds terrific. But the odds are you will forget when the free trial quietly flips into a paying membership.

Unless you are poring over your monthly credit card bill, you may not be aware that conversion has taken place. One tip: Using a prepaid debit card is one way of making sure your credit card will not be charged for eternity.

"I hate free trial subscriptions," said PIRG's Murray. "They often come back to bite you. If you do get one, always put a reminder in your phone to cancel."

NEGOTIATE

Do not assume that every recurring monthly charge is forever fixed.

"A lot of things are negotiable," said Rocket Money's Mokhtarzada. "We have a service that looks at bills and identifies hidden promotions, or loyalty discounts, or alternative pricing that is available, which can be applied to your account without even changing your service."

CANCEL, CANCEL, CANCEL

Gym memberships are infamous for being very tough to cancel, and others seem to be following their lead. PIRG has joined other consumer organizations in filing a complaint to the Federal Trade Commission about Amazon Prime making it an "ordeal" to end a membership.

But do not give up, even if companies try to make it as confusing as possible. At stake is not just, say, a measly $5 a month: it works out to $60 a year, or $300 over five years, and so on until you are dead and buried.

Multiply that by 10, 20 or 30 subscriptions and this is a serious matter indeed, for you could invest the money instead.

That is why on Michael Whitty's spreadsheet, he has a special column for each subscription which includes the exact link where he can cancel.

"Pay attention," he advised. "I think most people would be very surprised at how much they're spending."

(Editing by Lauren Young and Richard Chang; Follow us @ReutersMoney)

[© 2022 Thomson Reuters. All rights reserved.]
This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.