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Chances are you don’t have a good idea of how much your subscriptions really cost.
Consumers’ offhand estimate of how much they spend monthly on subscriptions averaged $86, according to a survey commissioned by market research firm C+R Research. Yet when asked about subscriptions in specific categories, the actual amount was $219 on average, or $133 more than expected.
“It’s a slippery slope with subscriptions because it happens automatically and you’re not actively making that purchase every month,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.
With the explosion of subscription services over the past decade, it can be difficult to keep up with them all. For media and entertainment offerings alone, the average number of paid subscriptions per consumer was 12 in 2020, according to Statista. Millennials had the most: 17.
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Since subscriptions are often automatically charged to a debit or credit card, it’s easier for users to not notice the cost. Most people (86%) have at least some, if not all, of their subscriptions on autopay, according to the survey.
And 42% said they forgot they were still being billed for a subscription they no longer use.
“He’s the rare person who hasn’t forgotten at least one sneaky accusation,” said Kathryn Hauer, CFP at Wilson David Investment Advisors in Aiken, South Carolina.
Nearly a third (30%) of respondents in the C+R study underestimated their subscription costs by $100 to $199. Another 24% were out for $200 or more.
For anyone who wants to better understand how much they spend and on what, it’s worth considering an app like Truebill or Mint that lets you track your subscriptions. Many banks or credit card companies also let you see your recurring charges in one place through your account.
Tracking your subscriptions more closely can also help you budget better so you don’t overspend.
“It really comes down to organization,” Boneparth said. “The more organized you are around cash flow, the more you can identify what you want or don’t want to spend your money on.”
The survey for the study was conducted in late April and early May with 1,000 consumers.