Will Elon Musk be the straw that broke the monthly service fee payments?
Probably not, because too many Americans continue to shove money into the center of the utility bill. Case in point: Musk’s $8 a month “blue check for the masses” gambit is sure to have many supporters.
This is the problem of forgetful subscription consumers.
The fact is, monthly fees are so easy to come by and can add up so gradually that consumers may not realize they’re paying so much for those monthly subscription fees for Amazon Prime, Apple TV, and the New York Times (among others).
According to a recent survey by market analysis firm C&R Research, a monthly subscription costs US consumers an average of $219 every 30 days. A separate study by Statista showed that US adults have an average of 12 monthly subscriptions, while millennials have an average of 17 monthly subscriptions.
As crazy as it sounds, most Americans don’t realize they owe so much money on subscriptions. The C&R study noted that survey participants believed they only owed about $86 a month in subscription fees, which is $133 less than they actually owed on those fees. Additionally, with so many of these subscription fees on a consumer’s autopay account, 42% of all subscribers were unaware they were being charged for the service.
“If you can’t remember all the monthly service fees you pay without checking your bank statement, you probably have too much,” said Andrew Latham, financial planner at SuperMoney.com. “Feeling nervous about monthly service fees is another red flag for a consumer to start making changes.”
Avoiding excessive monthly subscription fees
There is an old British military quote that says, “He who dares wins. He who sweats, wins. He who plans, wins.”
This also applies to your fight against the aggressively charged monthly subscription fees. With a solid plan of action and disciplined execution, you can limit, if not eliminate, those annoying monthly subscription plans.
Here’s a checklist of tips on how to do it.
Know where you stand. First, look at your monthly service charges (check your bank statements for best results) and see how many subscription services you have.
“Then determine which services you absolutely cannot live without and consider paying for them annually or even biannually,” Latham told TheStreet. “You can often make significant savings by paying lump sums.”
Start cutting back on services you don’t need or use. Now is the time to start thinning the herd and cancel subscription services that you either don’t use or don’t need.
“For example, you really don’t need Netflix in 4K if you don’t have a high-end TV to match it,” Latham noted. “It’s also a good idea to negotiate a lower fee with service providers or even share an account with a friend or relative.”
Press the pause button. If you’re not sure if the monthly service fee is worth it, take a break from the service for a month or two. “You may be fine with free alternatives like a library card or an account with a free streaming service like Roku Channel or Tubi,” Latham added.
Always keep track of costs. It is always a good idea to check services that may have increased in price. “I recently negotiated lower rates for cable TV and satellite radio just by calling customer service and asking for a refund on my old rates after the introductory promotions expired,” said Ted Rossman, senior industry analyst at Bankrate.
Go the DIY route first. While there are good mobile apps to help you manage your monthly subscription fees, try to create a way to limit your subscriptions first.
“There are some services like Trim and Rocket Money (which absorbed the service formerly known as Truebill),” Rossman told TheStreet. “They charge a fee though, so do it yourself if you can.”
“It’s ironic to pay a subscription fee to help keep the subscription fee down, but some people find it helpful to automate the process and get outside help,” Rossman added.
While you’re at it, look for more savings. Once you’ve fully saved, go up the ladder and review your biggest monthly payments to really save money.
“Monthly subscription fees can certainly lead to a lack of cash flow, but it’s not automated expenses that cause people cash flow problems, it’s manual expenses,” said Joe Allaria, partner at Carson Allaria Wealth Management. “Cars, houses, travel and food are the non-subscription expenses that have put the biggest dents in many tight budgets I’ve seen.”
This is especially true for Americans who are struggling with cash flow.
“If you find yourself in this scenario, get rid of your car payment of more than $500 a month, stop booking expensive vacations and stop eating out so much,” Allaria said. “It’s a lot easier to shave hundreds or thousands off your monthly budget by making a few big changes than trying to cancel every subscription just to free up a little cash flow at the end of the month.”