- Close to a third of consumers underestimate how much they spend on subscriptions by $100 to $199 each month, a new study shows.
- Many people (42%) have forgotten that they're still paying for a subscription they no longer use.
- It's worth looking into apps that help you keep track of those recurring charges.
There's a decent chance you don't have a good handle on how much your subscriptions are really costing you.
Consumers' offhand guess of how much they spend monthly on subscriptions averaged $86, according to a survey commissioned by market research firm C+R Research. Yet when asked about subscriptions in specific categories, the actual amount was $219 on average — $133 more than estimated.
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"It's a slippery slope with subscriptions because it just happens automatically and you're not actively making that purchase every month," said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.
With the explosion of subscription services over the last decade, keeping track of them all can be challenging. For just media and entertainment offerings, the average number of paid subscriptions per consumer was 12 in 2020, according to Statista. Millennials had the most: 17.
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Because subscriptions are often automatically charged on a debit or credit card, it's easier for users not to notice the cost. Most people (86%) have at least some, if not all, of their subscriptions on autopay, the survey showed.
And 42% said they have forgotten they were still being charged for a subscription they no longer use.
"It's the rare person who doesn't have at least one sneaky charge they've forgotten about," said Kathryn Hauer, a CFP with Wilson David Investment Advisors in Aiken, South Carolina.
Nearly a third (30%) of those surveyed for the C+R study underestimated their subscription costs by $100 to $199. Another 24% were off by $200 or more.
For anyone who wants to get a better grip on how much they are spending and on what, it's worth considering an app such as Truebill or Mint that allows you to track your subscriptions. Many banks or credit card companies also allow you to see your recurring charges all in one place through your account.
Keeping closer track of your subscriptions also can help you budget better so you're not overspending.
"It really comes down to organization," Boneparth said. "The more organized you are around cash flow, the more you can identify what you want or don't want to spend your money on."
The survey for the study was conducted in late April and early May among 1,000 consumers.