Subscription economy isn’t a new word, but it surely gained more currency during the pandemic. In a bid to consciously cut costs, automate expenditure for better accounting and increase savings, individuals and households globally adopted online subscriptions. However, along the road many people have fallen into the trap of ‘subscription addiction’.
“I routinely find a pack of toilet papers, hand tissues, detergents, dishwashing tablets, cleaning supplies, dog treats, make-up kits, and more waiting outside my door once every two months. I have subscribed for these supplies in the lure to save a few bucks,” says Jaya R., a working executive in Dubai, and a resident of the emirates for more than a decade.
These are just some of the many subscriptions Jaya has registered for, but she is now finding it difficult to manage. “I also have several OTT services, subscriptions of magazines, newspaper, e-libraries, games, etc. But I had lost track of some services I had signed up for. Over the last few months, they were billed to my credit card and I had to unnecessarily pay for them.”
Convenience of automation has led many to fall for the ‘subscription’ model and become addicts to it. For months, Jaya has paid for services that she or her family are not using.
Recurring payments have provided a predictable revenue stream for companies. Regular consumers have also benefitted by availing different price bundles but there are scores of ‘lazy unsubscribers’ too who tend to become victims of this facility.
A poll conducted by an online aggregator of financial products in the US found that 48 per cent of its respondents said they forgot to cancel a free trial before being charged by an automatic renewal. Even though the study was conducted in the US, it reflects the consumer behaviour of people worldwide.
Jaya, for instance, is cancelling some online subscriptions and is expected to save about Dh350 a month. “I am paying Dh75 a month for an educational app for my son, Dh40 for online music service, Dh225 for an online newspaper service, but these apps haven’t been used it for months. I have cancelled it now,” she said.
Think, how many subs did you take during the pandemic? How many of these services are you truly using? If there are services and products that you haven’t used for three months and above, it is time to reevaluate your decision and cancel them.
Here are a few tips to manage subscriptions:
1) Keep a track of your subscriptions: Make an excel file, if you wish, or simply jot down the subscription services on a notepad but keep a track of them all. Do an audit every month or two of these services to see if you are taking full benefits of the services. If you have forgotten which services have you subscribed to, take a look at your credit cards, search your inbox, and look it up in your phone ids (for instance, in Apple, subscriptions tab in the App Store details all such apps.) Forgotten subscriptions can eat away unnecessary funds from your wallet. Look for them and delete.
2) Restrict in-app purchases for shared devices: This will work for families where kids have gadgets linked to the cloud and payment methods. A Dh10 or so purchase on a game a month might seem innocuous at first, but regular such spends can inculcate wrong money habits among children while piling up your subscription fees. Be discerning about the online purchases you make and set right expectations around them.
3) Disable auto-renewal for services: Avail free trials wherever you can and disable auto-renewals. It takes a minute or so to make an online purchase. If you are using a service, make time to renew it on your own. Who knows, you might get a loyalty discount or benefit a better priced package.
It is important to understand why financial independence is such a big deal and what it is.
Penny Wise1 year ago