How Subscriptions Are Impacting Your Budget
We are delving into a topic that hits close to home for many of us – the potential pitfalls subscribing can have on your spending. It's a phenomenon that's becoming increasingly common in our consumer-driven world, but is it really helping or hurting our financial well-being?
We live in an era where subscriptions are everywhere, from streaming services to monthly subscription boxes for everything imaginable. And yes, this trend has crept into our spending habits as well. Subscriptions may seem convenient and even fun, but let's take a closer look at some of the potential downfalls.
1. One of the biggest downfalls of subscription spending is the potential for those costs to accumulate or sort of grow without you realizing. Sure, each individual subscription might seem affordable, but when you add them all up – streaming services, beauty boxes, meal kits – it's easy to overlook just how much money is leaving your bank account each month. These seemingly small expenses can chip away at your financial goals without you even realizing it.
2. Subscription services can also encourage impulsive spending. The allure of receiving a surprise package every month can lead to making purchases you might not have considered otherwise. It's like giving in to that instant gratification itch on a regular basis. This can be a slippery slope, as impulsive spending can quickly spiral out of control, jeopardizing your financial stability.
3. Let's not forget the physical aspect of subscription spending – the accumulation of stuff. Whether it's clothes, gadgets, toys, or novelty items, subscription boxes can contribute to clutter in your living space. This clutter not only takes up valuable physical space, but it can also clutter your mind and contribute to feelings of overwhelm.
Ask yourself, do you really need the monthly pet toys delivered? Do you really need that many? Or could you maybe pick up one toy when you do your grocery shopping and spend $10 versus $30 a month for a subscription?
Same for baby toys for your child? How many toys do they really need? Do you need a subscription box for that? Or can you do like the pet toys and buy a toy when you go to get groceries and just one, and maybe just once in a while?
4. Subscribing can also lead to a sense of detachment from your purchases. When you're constantly receiving items in the mail or enjoying digital content without actively choosing it, you might basically lose touch with the value of what you're getting. This can lead to a mindset where you're no longer making conscious, deliberate choices about your spending. You are on auto pilot.
And there are other places that make shopping easy. How easy is it to hit that submit button? You can even get monthly deliveries on sundries and such. You can push a button and get more laundry detergent. You can subscribe to your vitamins and have those delivered monthly.
It’s the same thing here with that detachment and not even truly realizing how much you are spending.
5. For those attempting to stick to a budget, subscription spending can pose a real challenge. Trying to keep track of multiple subscription payments and their due dates can really be overwhelming. This can lead to budget fatigue, where you just throw your hands up in frustration and maybe give up on a budget altogether… what does that do? It leaves your financial goals in the dust.
This exact thing could contribute to your mental health issues as it relates to your
finances.
6. Many subscription services require you to commit to a certain period of time, or sign a contract that can often be a year or more. While this commitment might seem harmless at first life is full of surprises. Circumstances change, financial priorities shift, and you might find yourself locked into payments for services you no longer need or want. Or they renew and you don’t really think about it. You just let them continue and you may not even realize you are still paying it.
7. Here’s a big one for so many people… How often are you using food delivery services?
Did you know that the cost of your food is actually higher for delivery than if you went to the restaurant and purchased there? Even if you are paying an annual fee for that, and that’s just another subscription, you are paying more for the food AND you still have to tip the driver. Most likely, you will end up paying at least 1/3 more for delivery of that meal than if you went to pick up yourself. A $20 fast food becomes probably more like $40. More expensive restaurants will cost even more. So besides the annual fee, it’s still costing you more.
8. Perhaps the most significant pitfall subscribing can have to your spending, is that it can hinder your progress toward your larger financial goals.
The down payment on a house, paying off debt, building your emergency fund, even vacations or getting married or starting a family can be affected. All this spending can really impact your ability to reach those goals.
When you look at those subscription boxes, how many are really a need? Not a convenience, a need. Your needs have to come first, then your deal with your wants.
Is it time to take a hard look at your subscription spending? Is it time to decide if it’s worth what you're sacrificing in the pursuit of convenience and novelty or even status?
It’s easier, it makes your life easier, but sometimes you have to ask yourself the question… is it worth it, especially if that spending is keeping you from reaching your goals?
We recommend taking a moment to evaluate the services you're currently subscribed to. Do they align with your values, goals, and financial priorities? The goal here is to strive for a mindful approach to your spending that ensures your hard-earned money is being used in ways that truly enrich your life.
Look we get it, the economy right now is hard. It has been difficult on most of us. And it’s hard to give up things that you enjoy. And you’re tired and that convenience is really appealing when you’re tired. But subscriptions are one of the biggest ways people are seeing money, just sort of seep out of their accounts, often without even realizing it.
BONUS TIP
Periodically check your subscriptions. There may be ones you forgot about that you no longer use. You may have signed up for a trial membership and forgot to cancel it.
If there is a streaming service you aren’t using. Turn it off. You can always turn it back on later if you want it again.
A great way to do this is to check your bank and credit card statements and if there are charges for services you no longer need, take care of cancelling them.
Make sure they are in your budget, write them all down. It will give you a good visual to see how much you really spend and therefore easier to make the decisions of which ones to get rid of.
Any little changes you can make can add up to big differences in the long run.
Remember… healthy finances are a marathon not a sprint!