Decades ago, the word “subscription” primarily applied to magazines and newspapers. Today, subscriptions are everywhere. From streaming services and meal kits to fitness apps and software tools, it’s easy to sign up for things and forget about them. But even when they cost $5 a month, those subscriptions add up. Before you know it, you’re spending hundreds of dollars a month on services you barely use. That’s where a subscription audit comes in. It’s a simple way to take control of your spending and make sure your money is going toward things you actually value. Here’s why you need one and how to do it.
The Surprising Cost of the Cord-Cutting Revolution
For decades, when it came to home entertainment, cable television was king. But as streaming services (like Netflix, Prime, and Hulu) emerged and perfected their game, they inspired a cord-cutting movement. Home viewers (primarily Millennials and Gen Z) quickly abandoned expensive cable bundles in favor of a customized lineup of on-demand viewing. The success of those powerhouse platforms attracted competition from the likes of Disney, HBO, Paramount, and NBC, all of which entered the streaming market with promises of exclusive content. Soon, what had started as an affordable alternative became a complex web of streaming options.
Now, subscription models are used not just for home entertainment but also for software, clothing, food, cosmetics, fitness, education, and more. Even airlines and car manufacturers like Cadillac, Mercedes-Benz, and Porsche offer subscription services designed to reward their most loyal customers. Month after month, these subscriptions auto-bill us $5, $10, or $15 a month. Alone, those fees are small, but they quickly add up and quietly drain our bank accounts without us noticing.
Why Do a Subscription Audit?
According to a 2022 survey, Americans tend to underestimate their total monthly subscription costs by an average of $133. This discrepancy is mainly due to auto-pay, which allows us to forget unused subscriptions and miss price increases. That’s why a regular inspection of your monthly services can help you:
- Save Money. Subscriptions often fly under the radar because they’re automatically charged to your card. A subscription audit helps you spot charges you’ve forgotten about or don’t need anymore.
- Avoid Waste. Are you paying for a gym membership you never use or a streaming service you signed up for to watch one show? Cutting these out means less waste and more money for things that matter.
- Simplify Your Life. Too many subscriptions can feel overwhelming. It even has a name: Subscription Bloat. A subscription audit helps you streamline your expenses and focus on what you truly enjoy.
How to Do a Subscription Audit
1. Gather Your Statements
Review your bank or credit card statements from the past few months. Highlight any recurring charges. Don’t forget to check PayPal, Venmo, or other payment apps, as subscriptions can also hide there. (You can find your Maps statement in online banking or the mobile app.)
2. Make a List
Write down every subscription you find, along with how much it costs and how often you’re charged (monthly, yearly, etc.). This will give you a clear picture of where your money is going.
3. Evaluate Each Subscription
For each subscription, ask yourself:
- Do I use this regularly?
- Does it bring me value or joy?
- Could I live without it?
Be honest! If you haven’t used a service in the last three months, it might be time to let it go.
4. Cancel What You Don’t Need
Once you’ve identified subscriptions you don’t need, cancel them. Most services make it easy to cancel online, but you may need to call customer service for some. Before doing this, check the company’s policies for cancellation fees or penalties. For example, if you have an unused Audible subscription, you will lose any unused credits in your account when the cancellation is processed.
5. Look for Discounts or Alternatives
If you love a service but it’s too expensive, see if there’s a cheaper plan or a free alternative. For example, many streaming services offer ad-supported plans at a lower cost.
6. Set Reminders to Revisit
Subscriptions can creep back into your life over time. Set a reminder to do another audit in six months or a year to stay on top of your spending.
Tips for Staying Subscription-Smart
- Use a Budgeting App. Apps like Mint or YNAB (You Need a Budget) can help you track subscriptions and other expenses automatically.
- Share Subscriptions. Yes, despite the recent crackdown, many services still allow you to share accounts with family or friends. Splitting the cost can save everyone money.
- Think Before You Subscribe. Before signing up for a new service, ask yourself if it’s worth the cost. Consider waiting a few days to see if you still want it.
A subscription audit might sound like a chore, but in today’s digital age, subscription bloat is a real and costly phenomenon. By taking a closer look at your recurring expenses, you might be surprised at how much you can save.
And, of course, we’re always here to help you make smart financial decisions. If you need help managing your budget or tracking your spending, stop by or give us a call. We’re always happy to help!