How expensive are your habits?

Post by Mearns & Company in News

If your new year’s resolution is to save money in 2024, it might be time to review your regular payments like subscription services – you may be spending a lot more than you think.

The cost of many content providers has gone up over the past year, with, for example, popular entertainment services – from Netflix to Spotify to Disney+ – all increasing monthly fees.

It isn’t just entertainment platforms looking to lock consumers into regular payment plans. There are now subscription services for podcasts, audio books, online newspapers, wine deliveries, make-your-own meal boxes and pet food supplies – to name but a few. Even high street coffee shops offer ‘memberships’ with unlimited hot drinks to those paying monthly fees.

Research suggests the average person spends £39 per month on subscriptions, though many will pay significantly more. Collectively, this means UK households spend £1.6bn a month on such services. But not everyone is getting value for money, with one in ten claiming they don’t use some services at all.

It’s not hard to see how this happens. Providers often offer a free or low-cost introduction – knowing many of us will forget to cancel within the given period. While the cost of any single subscription may look modest, once you’re paying for a few, the costs quickly mount.

Lose it if you don’t use it

Review how often you do use your subscriptions to calculate the cost of each ‘free’ cup of coffee or streamed TV show. Generally there’s no contract so it’s easy to cancel payments for services that are just not working for you. You can always rejoin, should your favourite show return for a further series. In fact, many companies dangle discounts or special offers to get you to return.

If it’s a service you use regularly, check whether you can ‘downgrade’ your payment plan. Streaming services, for example, often have cheaper options with advertisements. Family plans can also be cost effective if more than one person in your household pays for the same service. Don’t forget to double check subscriptions that charge annual fees, rather than monthly payments. These can be easily missed, until the next payment disappears from your bank account 12 months later.

Once you’ve saved money from raking through regular subscriptions, make sure you conduct a more thorough audit of your finances by looking at other regular bills: from gas and electricity contracts to home and car insurance – savings can often be made by switching to better priced deals.