Subscription services are things that we mostly can’t do without (or we think so), and it seems cheap. But when you take into consideration the amount of money you use to watch shows, stream music, and store photos online, it becomes quite expensive.
About 84% of people underestimated what they spent when they were told to guess how much they spend on subscription services.
This just goes to show that convenience is not a cheap luxury because streaming music, TV shows, movies, signing up for subscription boxes that deliver groceries is draining you of more money than you think.
Purchasing countless subscriptions, and online purchasing as a whole, is also linked to release of dopamine in the brain that can be quite addictive. The gaming industry is notorious for playing the dopamine card using the near miss effect in their playing machines.
In the study, researchers first asked a set of people to give an estimate of how much they spend on subscription services monthly and they had to answer in just ten seconds. The average of the first guess was $79.74 per month.
Secondly, they were given more time to think and consider all the services they opt for including Spotify, Netflix, Xbox Live, PlayStation Now, and many more. This time, the estimate rose to about $111.61, which is a 40% increase from their initial estimate.
Finally, they were helped to calculate the actual amount they spend on tech subscriptions, which was expanded to include everything ranging from video and music streaming, gaming services, cloud storage, meal services, wellness, and other apps, home security systems, to even the Wi-Fi and cellular services needed to use the other services.
At the end of the process, the subjects were shocked to see that the average estimate of what they spend per month rose to $237.33, which is a massive 197% increase from their first estimate.
It was realized that why the total of money spent on these subscription services adds up fast is because each service is usually cheap individually; Hulu and Netflix go for $8 a month, Amazon prime is $119 per year, and this turns out to be less than $10 per month.
You can opt for a Dollar Shave Club subscription for as little as $3 per month. Meal kits go for about $20 a box, or $60 a week if you order three meals.
You also tend to forget that you are paying for these services if the subscriptions and subsequent orders are automatically deducted from your account or charged to your credit card.
So, it shouldn’t come as a shock that there are people who constantly drop about $200 per month on subscription services.
Most times, many of these subscription services stop registering as things that are paid for, especially those under $20.
Things like Audible, Netflix, Spotify and many more now seem like a vital part of life that they become a purchase you make unconsciously.
Tips to reduce your spending on subscription services
A lot of people are usually shocked when they go back to their credit card and find out that they are registered to some services that they no longer use.
You have to track your monthly subscription charges and see how much they cost. If you want to be serious about this, then you can date back to about a year and check for subscription charges.
You can opt to cancel your subscription on the 3rd day of the month and still enjoy their services until the 25th of that month. There is no reward for waiting until the 24th day to cancel the subscription.
With the right knowledge, you can get the hand of managing your active subscriptions. Let’s say there is a 7-episode show on Disney Plus once a week and you have an active subscription.
You could set a calendar reminder to end the subscription a few weeks before the show ends. If the calendar reminder pops up and you still need the subscription, you can continue paying and reschedule the calendar reminder.
Let’s say you need to have a Netflix and Disney Plus subscription, you could pay for the Netflix and invite your friends over for a TV show watching session.
While your friend can pay for the Disney Plus subscription and invite you over to watch a movie. This has proven to be a great way of expanding your entertainment options at a lower cost.
Read next: The Surprisingly Long History of eSports (infographic)
Featured photo: Pixabay.
About 84% of people underestimated what they spent when they were told to guess how much they spend on subscription services.
This just goes to show that convenience is not a cheap luxury because streaming music, TV shows, movies, signing up for subscription boxes that deliver groceries is draining you of more money than you think.
Purchasing countless subscriptions, and online purchasing as a whole, is also linked to release of dopamine in the brain that can be quite addictive. The gaming industry is notorious for playing the dopamine card using the near miss effect in their playing machines.
2018 Study
A study which was conducted in June 2018 by consulting firm Waterstone Management Group, showed how wide the gap in perception and reality is when it comes to spending on subscription services.In the study, researchers first asked a set of people to give an estimate of how much they spend on subscription services monthly and they had to answer in just ten seconds. The average of the first guess was $79.74 per month.
Secondly, they were given more time to think and consider all the services they opt for including Spotify, Netflix, Xbox Live, PlayStation Now, and many more. This time, the estimate rose to about $111.61, which is a 40% increase from their initial estimate.
Finally, they were helped to calculate the actual amount they spend on tech subscriptions, which was expanded to include everything ranging from video and music streaming, gaming services, cloud storage, meal services, wellness, and other apps, home security systems, to even the Wi-Fi and cellular services needed to use the other services.
At the end of the process, the subjects were shocked to see that the average estimate of what they spend per month rose to $237.33, which is a massive 197% increase from their first estimate.
It was realized that why the total of money spent on these subscription services adds up fast is because each service is usually cheap individually; Hulu and Netflix go for $8 a month, Amazon prime is $119 per year, and this turns out to be less than $10 per month.
You can opt for a Dollar Shave Club subscription for as little as $3 per month. Meal kits go for about $20 a box, or $60 a week if you order three meals.
You also tend to forget that you are paying for these services if the subscriptions and subsequent orders are automatically deducted from your account or charged to your credit card.
So, it shouldn’t come as a shock that there are people who constantly drop about $200 per month on subscription services.
Most times, many of these subscription services stop registering as things that are paid for, especially those under $20.
Things like Audible, Netflix, Spotify and many more now seem like a vital part of life that they become a purchase you make unconsciously.
Tips to reduce your spending on subscription services
Make a list
It is not your fault if you forget the subscriptions you are registered for because they seem relatively cheap.A lot of people are usually shocked when they go back to their credit card and find out that they are registered to some services that they no longer use.
You have to track your monthly subscription charges and see how much they cost. If you want to be serious about this, then you can date back to about a year and check for subscription charges.
Cancel the subscription on time
Most people are victims of waiting until the final minute before canceling a subscription, but there are no consequences to ending payments before the time they are due. Take Netflix for example, say they bill you on the 25th of each month.You can opt to cancel your subscription on the 3rd day of the month and still enjoy their services until the 25th of that month. There is no reward for waiting until the 24th day to cancel the subscription.
With the right knowledge, you can get the hand of managing your active subscriptions. Let’s say there is a 7-episode show on Disney Plus once a week and you have an active subscription.
You could set a calendar reminder to end the subscription a few weeks before the show ends. If the calendar reminder pops up and you still need the subscription, you can continue paying and reschedule the calendar reminder.
Share the cost of the services with friends
If you have a group of friends, then you can assign each person to pay for a particular subscription, which will make paying for subscriptions relatively affordable.Let’s say you need to have a Netflix and Disney Plus subscription, you could pay for the Netflix and invite your friends over for a TV show watching session.
While your friend can pay for the Disney Plus subscription and invite you over to watch a movie. This has proven to be a great way of expanding your entertainment options at a lower cost.
Read next: The Surprisingly Long History of eSports (infographic)
Featured photo: Pixabay.
