Bad habits. We all have them. And while some are relatively harmless (biting your nails, snapping your gum), others aren’t so benign. For instance, if you’re in the habit of setting and forgetting subscription services (like video and music streaming, weekly meal kits, or endless others), your habit can lead to serious consequences.
That’s why we’re here to be your ally. Not only will we help wrestle your subscription service habits to the ground, but we’ll also help you build better habits when it comes to your money.
The Era of Subscription Services
You have your typical streaming services, like Netflix, Hulu, Spotify, and YouTube Music. But even more companies are jumping onto the subscription bandwagon — clothing, meal kits, even razors and toothbrushes, can all arrive at your doorstep via subscription services.
And let’s not forget offline subscriptions to things like gym memberships and home security systems.
It’s likely that you pay for these services with automatic payments. Your credit card is charged a predetermined amount or your checking account is debited each month, and the delivery of your choice arrives on schedule. Convenient, yes — but dangerous, too.
The Dark Side of Autopay
With all these subscriptions to manage, how can you keep track of how much you’re spending? Each monthly fee may be small, but when you’re paying for multiple services, they can add up — fast.
Losing track of the total cost of your automated payments could leave you with an overdraft charge or a credit card bill that you can’t afford to pay in full. Other potential dangers include a price increase that goes unnoticed or a billing issue where you’re charged more than you should be.
Try these tips to successfully stay on top of your subscriptions:
- Make a list. Would you be able to name all your subscription services and how much you pay for them? Do a self-audit of the services you subscribe to — a good way to catch them all is to simply go through your monthly statement from your checking account and credit card and write down the recurring payments.
- And check it twice. Set a monthly alert on your phone to review and update your subscription list. Make sure you’re still regularly using everything you’re paying for. If not, cancel. Double check for redundancies, too. (Are you really binging HBO, Hulu, Netflix, and Amazon Prime Video?) If you find yourself missing any of the services you’ve canceled, you can always start it back up again — as long as it fits into your budget.
- Examine your financial statements, too. Double check that you’re getting charged the correct amounts and that prices haven’t increased by taking a couple minutes to cross-reference your checking account or credit card statement with your subscriptions list.
- Stay two steps ahead. Online banking and mobile apps, like ours, make it easy to check in on your accounts daily. Before your automated payments are due, keep an eye on your outstanding credit card balance and verify that you have enough funds in your checking account to cover your withdrawals.
- Build a smart budget. When building your budget, make sure you factor in your subscription services. When you see all those monthly costs next to each other, it may help you decide which services are really worth the money.
Subscriptions can certainly make life easier, but if you’re not careful, the convenience can be costly. Keep an eagle eye on the total lump sum cost for the reality check you need to subscribe smarter.
It’s easy to fall into the bad habit of getting carried away with autopay — but by following our tips above, you’ll be five steps closer to building a better habit when it comes to your subscription services.