The Subscription Box Phenomenon and How it Could Ruin Your Budget
Did you know that 84% of people completely underestimate how much they spend on subscription-based boxes and service each month? According to a recent survey, the average person believes they pay around $80 a month on recurring services. In actuality, the average subscriber spends more than $110 every month. The survey included tech subscriptions such as streaming television, music, and video games. If you factor in subscription services that deliver groceries, luxury products, and toys to your front door the figure is exponentially higher.
Can subscription services bust your budget?
Absolutely, advise experts. Because subscription services generally renew on their own, they fall into the black hole of expenses. It is incredibly easy to forget how much you're spending when money is siphoned directly out of your account without your regular consent.
Additionally, it’s easy to lose sight of just how much you're spending when each box or service is relatively cheap. Many subscription boxes cost under $20 a month, and while that might not seem like a lot of money, it adds up quickly when you are subscribing to multiple services.
How can you prevent subscription services from taking all your money?
Simply put, a good budgeter is someone who keeps a close eye on what comes in and goes out of their bank account. Each month do your due diligence and look over your checking account, or use an app that categorizes your expenditures. When you add a new subscription box, don’t forget to add it to your budget.
Regularly take inventory of the services you subscribe to and see which ones you can cancel. Not all subscription boxes turn out to be useful and canceling will save you money. If you don’t use the makeup samples you receive each month, place the account on hold. If you are stocked on paper towels for the next five years, make sure to cancel your auto-ship.
Don’t be lured in by free offers. Many companies will offer free products if you are willing to sign up for a subscription, but the free products are likely not worth the amount you’ll spend over the life of the subscription. Before you sign up for anything new, ask yourself if you really need the products, and if the value of the products offsets the price of the box. Most of the time you’ll find you can purchase the same products ala carte for far less.
The Bottom Line
The subscription e-commerce space is growing quickly, and consumers are taking the bait. While there are plenty of subscriptions that may seem like essentials, there are plenty more that you just don’t need if you are trying to stick to a strict budget. Take a look at your current subscription services and cut what you don’t need. Your bank account will thank you.