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How much do you pay every month for invisible stuff you don’t use? I’m referring to subscriptions or memberships for things like music streaming, movies, software, magazines, gyms, shopping clubs, and other services or online resources you may have forgotten about. Those "small" monthly fees can quietly leak a substantial sum of money out of your wallet.
To stop the leaks, you might want to consider doing an annual subscription audit. In the same way you rebalance your investments annually, it’s a good idea to schedule a day each year and dig through your bank and credit card statements.
The first step is to make a list of every recurring charge. Knowing what a payment is for can sometimes be hard to spot from the statements; a call to the credit card company or a visit to the website can give you a comprehensive list.
Next, ask yourself, “Do I get my money's worth from this? Am I still using it? Do I get value from this?” If the answer isn’t a resounding “Yes,” it's time to cancel.
Sometimes this is harder than it may seem. Many services require you to call rather than give you the ease of canceling online. If you must call, be friendly and firm. Telling a service representative you want to cancel triggers their save-the-customer protocol. You’ll have to stay the course through the offers they will make to retain you, but eventually you will prevail.
What if you still use a subscription or service but its cost has increased over time to more than it is worth to you? You may be able to negotiate a lower price. Your experience with cancelling those services you absolutely don’t want will come in handy. Call customer service and say, "I'd like to cancel." When they ask why, say the magic words: "It's become too expensive." They'll almost always offer a discount. Hedge a bit, and they might sweeten the deal.
I recently slashed a newspaper bill that had jumped to $30 a month—more than I felt it was worth. When I called to cancel my subscription, the customer service representative offered to reduce the rate to $20 a month. I said no, and before I could really say anything more, the offer went to $5 a month. My bottom line was that I was willing to cancel the subscription. Instead, with about 15 minutes of my time, I saved $300 a year.
Some services are more open to negotiation than others. Cable/satellite TV companies are advertising for new clients all the time. Mentioning a current deal that the competition is offering works wonders. I’ve saved significant money doing this. It’s the same with Internet services; compare your plan to those offered by smaller local providers. Analyze your cell phone data usage and explore cheaper plans. You will be amazed at how often there is a special promotion going on for valued “long term customers” like yourself. With buying clubs, evaluate whether you save enough to justify the annual membership fee. If not, you may be able to downgrade to a lower membership tier.
Other helpful tools for lowering your subscription costs are apps like Trim or Rocket Money (formerly Truebill), which can help you track and easily cancel subscriptions. And any time you sign up for a free trial or temporary discounted membership, set calendar alerts to help you remember to cancel to avoid unwanted charges.
An annual subscription/membership audit can result in substantial savings, which you can then apply to something you do value. Including, I hope, your subscription to the media outlet where you are reading this.
Rick Kahler, MS, CFP®, CFT-I™, CeFT®, CCIM, is the founder of Kahler Financial Group, a Rapid City, SD-based fee-only Registered Investment Advisor.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
