Why You Need to Factor Subscriptions Into Your Budget
Canadians love their subscriptions. According to a study conducted by the Convergence Research Group, Canadians spent over $872 million in recent years on what they term “over-the-top” subscriptions that include platforms like Netflix. This figure represents an increase of nearly 30% from the previous year. By 2020, Canadians are expected to spend over $1.5 billion in subscriptions.
Why does this matter?
First, subscriptions aren’t going anywhere. In fact, with large companies like Apple, Crave, Walmart, and Disney embracing the subscription model, it’s likely you’ll be shelling out more dollars than you think. It’s also important because these costs can balloon quickly. We previously showed you just how much the average person is paying in subscriptions each month. This research showed that many consumers can be paying up to $150/month on subscriptions alone, excluding other fixed costs like your monthly cable bill.
Beware the subscription trap
Once they have you, they have you. That’s the beauty and the danger of subscriptions. You sign up one time and don’t have to do anything for your subscription to automatically renew each month. That makes sense if you’re actually using all of the subscriptions you’re signed up for. But if you’re like a lot of Canadians, then it’s likely you’re throwing money away that could be put to better use.
Get your subscriptions in order
One of the reasons it’s difficult for Canadians to track just how much they’re spending on subscriptions is because there’s no one place to manage them all, or to keep all these payments together, organized and up-to-date. Who has time to update a spreadsheet every month with payment amounts, dates, and whether it’s been cancelled or not? A gym membership might be paid differently than a Netflix subscription which may be on a different card than your subscription food box. On top of that, chances are that none of these payments are coming out on the same day, which makes tracking how much you spend even more complicated.
But it doesn’t have to be. There are apps out there that make it easy to know how much you’re spending on subscriptions. A service like Butter offers a central dashboard that sends you alerts whenever payments are coming due. They even reward users with 1% cashback on eligible subscriptions that’s money back in your pocket.
Discover new subscriptions you’ll actually use
One big reason people keep subscriptions they rarely use is the “what if” factor. What if you actually go to the gym more than once a month? What if Crave actually airs that series you’ve been waiting for or you actually buy something from Costco this year? FOMO is real, but so are those dollars leaving your account. Here’s another what if: what if you found subscriptions to fit your lifestyle that you’d actually use on a regular basis? Now you’re getting real value for all that money you were wasting.
It’s probably a good idea to do a quick check up on which subscriptions you’re currently using. At the very least, figure out how much you’re spending each month. Look into apps or services that can help make this process a bit easier.
Butter is a website and mobile app that helps consumers and entrepreneurs manage their subscriptions and membership fees, starting with tracking recurring spend, sending smart alerts to notify users of price increases and upcoming payments, and paying cashback on many of your favourite consumer subscriptions.
Photo by JESHOOTS.COM on Unsplash
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