KIMBERLY PALMER: Detox subscriptions to plug budget leaks [Column] | Company


When Sarah Pekkanen let her son sign up for a free trial of an online education subscription, she figured she would cancel the subscription before the fees started and in the meantime her son, now aged 12 years old, would learn mathematics. But she forgot to cancel, and soon the charges began to pile up.

“I paid for something we never used,” says Pekkanen, novelist in Chevy Chase, Maryland. When she finally noticed the charges and tried to quash, it ended up taking a few hours over several days.

With the growing popularity of subscriptions to streaming services, monthly product boxes and more, the Pekkanen experience is becoming more and more common. UBS Group, a financial services company, predicts that the subscription economy targeting consumers and businesses will have a growth rate of 18% and be one of the fastest growing industries in the world by 2025. Many subscriptions renew automatically, which means consumers can waste hundreds of dollars a year on products or services they barely use.

TRY A DETOX SUBSCRIPTION

To put an end to this kind of wasting, consider a subscription rehab: cut each subscription from your budget as soon as you can to find out what you’re really missing.

“When you cut them all out, you get to choose what to add,” says Allison Baggerly, founder of the money-saving website Inspired Budget and a Houston resident. She suggests giving yourself time not to subscribe as well before re-subscribing for anything.

Indianapolis-based Certified Financial Health Advisor and Money Coach Zina Kumok likes to do this kind of financial spring cleaning quarterly.

“The best way to combat the inertia of auto-renewal is to create awareness of what you actually use and enjoy,” she says. Kumok took out a makeup subscription, but then realized that she was barely using the products, so she canceled it.

It’s also worth calculating what monthly subscriptions are costing you per year, as it adds up: a $ 10 per month subscription might not seem like much, but you could instead have an extra $ 120 in your bank account at the end of the day. the year.

A LESS RADICAL APPROACH MAY ALSO WORK

If a total detox seems too extreme, you can try a more gradual method: take a close look at each subscription you currently have and remove the ones you no longer want.

“Take a look at your card statements and determine how much you are actually spending,” says Delia Fernandez, a certified paid financial planner in Los Alamitos, California. She also suggests finding your subscriptions in the App Store on your phone and, if you’re an Amazon customer, looking for subscriptions like Audible or Amazon Music.

The next step, she says, is to manually check each subscription to determine when it renews automatically and how much it costs, then cancel it if you no longer want it. Fernandez adds that some apps, like Truebill and TrackMySubs, will do this job for you, but they often have to be paid for.

Dropping out of a membership can be especially difficult when it’s related to how you see yourself, like a fitness-related membership, says Bobbi Rebell, host of the “Money Tips for Financial Adults” podcast .

“You want to be the person who uses them, so you don’t want to cancel them. It’s an admission of failure,” she says. To combat this trend, she suggests canceling subscriptions you haven’t used in the past month and then adding them back sparingly.

“Get high when you sign up for a free trial,” Baggerly says, and be sure to put a note on your calendar before the auto-renewal date so you have time to cancel. Remembering to cancel can be especially difficult with annual subscriptions because the renewal date is so far away.

Baggerly signed up for a geocaching app that his family had used multiple times, then forgot to cancel, only to be surprised at the renewal fee a year later. If you’re just missing the deadline, she suggests calling and requesting a refund, which many companies will provide.

Ira Rheingold, executive director of the National Association of Consumer Advocates, says as companies become more sophisticated in their subscription marketing, many are using what’s called a “negative option,” where the consumer will be billed. recurring charge unless he specifically chooses outside. As a result, many consumers might not realize that they are purchasing a subscription at all. If you use a credit card, he says, you can also gain support from your card issuer by disputing a charge if you haven’t accepted it.

As for Pekkanen, as she finally canceled her education subscription, she says she learned her lesson: now, she says, “I’m really wary of free trials.”

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