Everything seems to be a subscription these days. Music, movies, even getting vegetables can be a subscription. Having access to so many subscriptions have made modern life incredibly convenient. You can now get entertainment and goods instantaneously. The flip side of convenience is it is easy to lose track on what subscriptions you are using.
I personally have forgotten to cancel free trials before only to find out a year later that I was still getting charged. It was for a coding tutorial site that was actually useful, I just hadn't used it since the trial was over. Another time I had forgotten to cancel my Showtime free trial and noticed 3 months later. Every time I've forgotten a subscription, none of the amounts were over $25. This is precisely why I missed them. If you aren't careful it can be death by 1,000 cuts. $5 here, $15 there can really add up over time.
I suspect that everyone has their own story of finding a phantom subscription 6 or even 12 months after they had intended to cancel it. It i seems to be a common occurrence and is the cost of doing business in the subscription economy. After I found my own phantom subscription, I began wondering how much that subscription had actually cost me.
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The true cost of forgetting subscriptions
After I found my phantom subscription, I added up how much I had given the company essentially for free:
$25 monthly fee x 12 months = $300
Alright, it's definitely not life changing but also $300 back in my pocket definitely would have been nice. The $300 figure was pretty straight forward and easy to calculate. Afterwards, it made me wonder what if I had invested that money in the market instead? What if I had forgotten about this for 2, 3, even 5 years?
It may seem irrational on the surface for someone to forget about a subscription for 5 years. Then I remembered I have been a Netflix subscriber for over a decade. Maybe it wasn't so crazy after all. Even though it didn't happen to me personally, I ran some figures on the cost of some common subscriptions.
Starting amount: $0 | Additional yearly: $300 | Growth Rate: 7.0%
Value after 3 years: $1,031.98
Starting amount: $0 | Additional yearly: $120 | Growth Rate: 7.0%
Value after 10 years: $1,774.06
Even though these might be fringe examples, it was fun to run the numbers. The other way to look at this is this is how much I could have in investments if I canceled X service.
Sometimes it can be a little difficult to figure out what is a subscription or not. You can compare and contrast two months of credit card statements to try and figure it out yourself. Having personally done this, it can actually be a headache as charges might not have the company name, you aren't qutie sure what it was for, etc. Luckily there are apps out there to do the work for us.
If you connect your accounts with either of the apps below they will go through your spending and parse out your subscriptions. From there it is up to you to cancel or keep the subscription. You might be surprised what is still lingering around on your credit card bill every month.
Trim is an app tries to help you identify places you could improve your finances. It analyzes your spending habits to find places of improvement, unused subscriptions, and gives you helpful hints to get you on track.
Truebill wants to be the place that helps you manage your financial life. They do everything from cancelling your unwanted subscriptions to helping you lower your bills.
Check out the apps above if you want an automated way to find your subscriptions. Connecting your accounts works a lot like Mint or Personal Capital.
If you aren't wanting to have another place where you need to connect your accounts, try looking at your credit card statements. This is actually more tedious than you would think. When I attempted this myself I pulled the last 3 months of statements. Then I looked for similar dollar and company values to find the items that were recurring. Definitely doable if you have the patience.
Have you used any of the apps above before? Forgotten a subscription? How did you handle it and what did you do about it? We would love to hear about it!