By Younas Chaudhary
I am convinced that subscribing to multiple services from streaming to meal delivery ruins our finances. Take me, for example. I recently turned on one of my home televisions (I hardly watch TV) and found out that I have HBO Max, Netflix, Fubo, Infinity Stream, Hulu, Peacock, Vudu, ESPN, Amazon Prime, CNN, You Tube Premium ….and so many others that I don’t even remember their names! I am paying hundreds of dollars a month on auto pay for these services and I rarely use them.
I hardly watch television and I purchased these for my kids and grandkids when they are visiting my home. I feel guilty that I am paying so much despite being able to afford it. Many years ago, I subscribed to basic cable at around $15 a month and would worry how I would make ends meet to pay for it!
Our affinity towards subscription services is eroding our monthly earnings. We do not notice it because we put them on auto pay. And everyone from Amazon to Coursera knows the bait and switch trick to get us signed up with our credit cards so that they can bill us forever.
If you are spending $300 per month on subscription services, it comes to $3600 a year. This is precious money that you can use to pay down your home mortgage, close credit cards, or pay off other loans. Better still, you could invest in your child’s education rather than give it to some company whose services you are hardly using.
Unfortunately, the subscription model has become addictive for a lot of us with Netflix setting the trend, but we never pay attention to how many times Netflix has increased its rates over the last 5 years! The latest subscription fads include fresh meal kits being delivered to your home. Unless you use them, the food will get rotten in the fridge, and it will become another foolish expense out of your pocket.
Perhaps the greatest culprits are computer software vendors, especially the anti-virus ones that keep on threatening me as if the world will end if I do not subscribe to their services immediately. This is sheer annoyance, an intrusion on my privacy, and a constant disturbance whenever I am working on my laptop.
Starting with magazines, the subscription model is good for businesses as they can charge a specified amount of money over the long term and increase their bottom line. This business model generates recurring revenue that yields predictable cash flow and the more it goes on, the better for the company.
According to an article in the Harvard Business Review, the subscription economy grew more than 300% from 2012 to 2019. Subscriptions become successful when they have the capacity to create habits for consumers so that using the product becomes habitual, for example, watching Netflix every day after work.
I believe that blindly subscribing to services we hardly use will lead us to financial ruin. So, I urge you to audit all your home and work subscription services across all categories- food, magazines, software, clothes, electronics, etc. and determine how many you are actually using. You will be shocked to see that you have not been using some services for ages, but your money is being drained consistently. Cut off all those that you do not need, keep to the bare minimum, and discover how much you can save in a month. Use that money for something worthwhile. Stay blessed.
Disclaimer
The views, thoughts, and opinions expressed in this article are my own and do not represent the opinions of any entity with which I have been, am now, or will be affiliated. Further, I make no warranty regarding the accuracy or effectiveness of my recommendations, and readers are advised to consult other advisors as well as their own judgments in making business decisions.
YBC Foundation 