6 Subscription Traps Draining Millennial Budgets This Year (And How To Cut Them)
If it feels like subscriptions are quietly draining your bank account each month, you’re not alone. According to Deposit Accounts, the average American pays for about 4.5 digital subscriptions, spending roughly $84 monthly.
If you want to make sure you’re truly getting value for your money, now is a great time to take a closer look at your finances. Here are six common subscription traps experts say to watch for — and how to regain control.
Read Next: Try Doing These 5 Subscription Hacks That Can Help You Save Money Without Missing Out
Find Out: 9 Subtly Genius Things All Wealthy People Do With Their Money — That You Should Do, Too
1. Wasteful Spending on Streaming
“Streaming tends to be the elephant in the room when it comes to wasteful spending,” said Brandon Gregg, certified financial planner and advisor with BBK Wealth Management. “Many folks cut the cable cord many years ago in search of cheaper options.”
Gregg said the problem is that every channel or company has individualized offerings, requiring you to spend money on multiple items just to get what you used to have in one place. Over time, this tends to lead to higher spending. One way to avoid this is to think carefully about what entertainment options you really want before signing up for a subscription. You may find that a bundling deal is your best option.
2. Weeklong Free Trials
“The top trap in my opinion is the seven-day free trial,” said Marcus Sturdivant Sr., managing member of The ABC Squared. “It’s a great thing to check out a service, but most people forget they even have these subscriptions.”
Sturdivant said the answer for this one may be simple – do a budget breakdown, and you may just find a subscription or two that you didn’t even know you still have. Another idea is to mark on your calendar one day before the free trial ends so you can remember to cancel.
3. Difficult Canceling Procedures
“Sometimes companies make it extremely or even mildly difficult to cancel subscriptions if you make it beyond the free trial,” Sturdivant said. “You may automatically become enrolled in a year-long subscription.”
His advice? If you’re a person who does a lot of free trials and forgets about them, do the ones that do not require a form of payment to sign up.
4. Pause Options
If we’re being honest, this can be an easy trap to fall into when it comes to subscriptions. You try to cancel and the company gives you two to three free months to stay.
“You agree, forget and the billing restarts,” said Andrew Lokenauth, founder of Fluent in Finance. “Many companies all run this same playbook. The fix is a subscription audit every 90 days, where you pull up your statements and cancel recurring charges you no longer need to incur.”
5. Unused Gym Memberships
“So many people have gym memberships they never use and are donating money to gyms and fitness centers,” Sturdivant said. “Also, when people have memberships to multiple gyms, it truly compounds the issue.”
Sturdivant suggested having just one or maybe two gym memberships. For example, you may use one fitness center to do training and another for martial arts.
6. Impulse Buys
Don’t worry – you’re not the only one who’s made an impulse buy when it comes to subscriptions.
“It’s easy to pay for something and forget about the recurring payment when it’s cheap,” said Dr. Annie Cole, money coach and founder of Money Essentials for Women. “The next time you’re about to subscribe to something, ask yourself if this is how you want to spend this dollar amount. You may find it helps you stop those impulse buys.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
