Are You Wasting Money on Subscriptions? 4 Ways to Find Out

Subscriptions can be sneaky. Especially the ones that give you an introductory discount and then dramatically increase the price when you're not looking. Or the ones that push you to sign up for an ongoing service even when you're only planning to use it once.

Many companies have realized that subscriptions are a great money maker. Rather than investing effort into making repeat sales, they can tie you into an ongoing payment that automatically slips out of your bank account. It switches the relationship as the onus is on you to cancel rather than them needing to sell. And human nature is such that we often let those things slide.

That's not to say all subscriptions are bad. Some of them are extremely useful and add value to our lives. The automatic payment means you don't have to think about it. The trick is keeping track of them and periodically canceling the ones that are just sucking your money. Here are four signs you could be wasting money on subscriptions.

1. You aren't using them

According to a survey by C+R Research, 42% of Americans had forgotten about a monthly subscription they were still paying for. Take a look through your bank statements and list out all the regular payments. If you can go back a whole year, so much the better. That way you'll catch any annual payments as well as the monthly or quarterly ones.

Be especially aware of what we might call "aspirational" subscriptions. Perhaps it's a keep-fit app or a learning platform. It can be anything you signed up to with the intention of improving your body or mind, but didn't stick to the habit. These can be the hardest to cancel, particularly if you still want to get fitter or learn more. Try to be honest with yourself about whether you'll really use it.

If you haven't used the service in the past few months, cancel it. Perhaps look for a free alternative you can use while you change your routine. You can always resubscribe to the paid option when you have more time or motivation.

2. You don't have money for other things

If you get to the end of each month and wonder where your paycheck went, you're not alone. Increasing living costs have put pressure on many peoples' already-stretched budgets. If you're struggling to put money into a savings account for an emergency or afford to cover your bills, subscription services could be partly to blame.

The C+R survey showed that people dramatically underestimate the amount they spend on subscription services. When asked to ballpark their subscription costs, on average, they estimated it came to $86. Then they itemized those expenses and the number rose to a whopping $219.

When you review your subscriptions, try to look at them in the context of your wider budget. A budgeting app could help here. Let's say you've allocated 10% of your budget to entertainment. If you're already spending that on streaming services and other subscriptions, you may not be able to afford to go to the cinema or eat out. There are no right or wrong answers here, it's about making conscious decisions about where your money goes.

3. You could get the same services for free

It's amazing how much you get for free or for a small set cost. And you don't have to spend hours finding the free options. For example, let's say you're a bookworm and pay for both Kindle Unlimited and Audible. That's a total of almost $20 each month -- $240 a year.

Instead, you could sign up at your local library for free. You'll be able to borrow physical books and use the library's services. Plus, a library card gives you access to Libby, a free ebook app with ebooks, audiobooks, and magazines.

Another option? Ask for help. The other week I needed to edit and shrink a PDF file. The free options didn't do what I wanted, but several of the paid services wanted to tie me into a monthly payment. It was only a one-off job and I really didn't want to commit as I've been burned by these services before. For example, Adobe Acrobat Pro charges almost $30 a month. Eventually, I found a friend with a subscription who helped me out at no cost.

4. You only want a single product -- and it costs less

In the long run, it's often cheaper to buy one item than sign up for a monthly fee. For example, to access Prime Video, you'll need an Amazon Prime subscription at $14.99 a month. Some people are regular Amazon customers and get good value from that fee. But if you're only signing up so you can watch a couple of movies, you might instead be able to rent them individually. Some (not all) movies are available on Amazon for $2.99 or $3.99.

Another example? I recently found some super interesting online courses. A monthly $10 subscription would have given me access to everything on the platform. Instead, I spent $30 to own the courses I actually want to do. I don't need all the courses and I don't have time to do them.

Bottom line

Businesses increasingly want us to subscribe to their services. They may incentivize subscriptions with free trials or huge discounts on, say, your first six months. That's one thing when these are services you use and get value from. But if you're paying for subscriptions you don't use or don't need, you're throwing money away. Cutting those ties could save you hundreds of dollars.