Here's How I'll Save Almost $1,300 by Quitting Amazon Prime in 2024

Let me start with a confession. I am quite a careful spender in many parts of my life, but Amazon is my kryptonite. I regularly get suckered by its offers, whether it's Prime Day deals or early access to lightning deals and other discounts. The retail giant often offers great value for my money and I've definitely scored some amazing bargains. Unfortunately, it also makes spending extraordinarily easy. And that can be dangerous.

I spent over $3,600 on Amazon this year. That's around $300 a month, which is money that could have boosted my savings or gone into my investment account. In my defense, I can justify some of that spending. I remodeled part of my house so that I could rent out a room, and Amazon had some money-saving deals on materials, home decor, and appliances.

Even so, a cold, hard look at my order history shows I threw away a total of around $1,300 this year on items I really didn't need plus the cost of my subscription. I want to curb my online spending in 2024. To do that, I need to bid my Prime time farewell.

1. I'll save almost $180 on the membership alone

Prime membership costs $14.99 a month, or $139.00 a year. I hadn't intended to keep my membership for the entire year -- my plan was to sign up for a few months, and then cancel once I'd bought what I needed. I didn't. So I spent almost $180 on the monthly membership alone.

That would be OK if I made the most of everything Amazon Prime offered. It isn't just about free shipping and access to exclusive deals. There are all kinds of series and films on Prime Video, as well as access to Prime Music and Prime Reading. The trouble is that our household also pays for Netflix, HBO, and Spotify. I barely use Amazon's entertainment offering.

How you can save money: Do a subscription audit

Subscriptions are like invisible termites nibbling away at your bank account balance. Each one feels relatively small when you sign up, especially because they often give discounted introductory rates. But before you know it, you could be spending hundreds of dollars on services you may or may not be using. One study last year found that Americans spent an average of $219 on subscription services.

Take a look at your bank statements or use a budgeting app to work out how many subscriptions you're actually paying for. It's all too easy to forget about one or two of them. Or perhaps -- like me -- you intend to cancel and never quite get around to it. Think about whether you're getting enough value out of each one. If in doubt, cancel it. You can always sign up again if you find you're missing it.

2. I'll save $1,100 on impulse purchases

My biggest trouble with my Amazon Prime subscription is that it fuels what I think of as "magical spending." It's essentially the mental acrobatics I do to somehow justify my purchases. For example, I might tell myself that this is the last month I'll be signed up for Prime so I might as well make the most of the free shipping or special Prime discounts. But then I don't cancel and the same thing happens a few months later.

Whether it is earning credit card rewards points, using your premium shopping subscription, or buying things that are on sale, one universal truth applies: You are only saving money if you're buying things you need or would have bought anyway. Spending money to save money can be a very slippery slope.

Key takeaway: Take a beat

The best way to cut back on impulse purchases is to pause before you buy. I often put things in my cart and wait a few days. This gives me time to think about whether these are needs or wants and untangle any lies I am telling myself. Unfortunately, one look at my Amazon spending tells me that's only helped so much this year.

Here are the extra steps I'm taking in 2024:

• Quitting Amazon Prime: There are very few things I really need in the coming year, and I have some ambitious savings goals. So I'm not going to pay for the privilege of extra temptations in the form of discounts that make me spend more money.
• Removing my credit card from my Amazon account: Even small impediments like having to manually input your information can help to curb unnecessary spending. The more thoughtful you can be about your online shopping, the more you're likely to save.
• Making a spend/invest reminder: One trick that often stops me from spending is to imagine what would happen if I instead invested that money. The S&P 500 is a common yardstick for investing, and it's generated average annual returns of more than 10%. There are no guarantees, but a compound interest calculator shows that a $1,300 investment earning 10% interest could be worth nearly $8,750 in 20 years time. Next time I want to waste $30 on an under-the-sink pan organizer, I'll tell myself that I'm actually throwing away part of my $8,750 old age party fund.

Amazon Prime can make sense and offer great value for a lot of people. Especially if you combine it with a Prime Visa card. But it doesn't fit with my goals or habits for 2024. By saving the subscription and cutting out my impulse purchases, I'll have more money available to invest and save.