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When Apple CEO Tim Cook speaks, people listen. And during Apple’s recent March event, Cook made it clear that the company is focused on incorporating a new dynamic into its business model: subscriptions.
“All of a sudden, Apple’s not just trying to sell me an iPhone,” says Thomas Smyth, founder and CEO of Trim, a service that helps people save on their recurring bills. “They’re trying to sell me music, video, and video games. I don’t blame them. The margins are great.”
The reason businesses such as Apple like subscriptions is the same reason you should be regularly reviewing yours: Once you’re subscribed, that recurring charge can easily become background noise. You don’t realize how much you’re shelling out. Or that you’re still subscribed to something you no longer use.
“I found out that I was paying for a security system on a home that I had already moved out of,” says Haroon Mokhtarzada, cofounder and CEO of financial management app Truebill.
“Often, these guys aren’t sending you emails to remind you that you’re being billed,” he says. “So, unless you do something, it’s going to be on autopilot—[the money] will come out of your account.”
In a July 2018 survey from Waterstone Group, 84 percent of people underestimated their spending on subscriptions—with roughly half off by $100 or more. Researchers looked at the monthly budgets of 2,500 consumers for 21 categories of subscription services. All told, the average consumer spends $237.33 each month on subscriptions, they found.
Many are household necessities—or at least, legacy costs—such as cellphone bills, cable TV subscriptions, and internet service. But that’s just a start.
Then there are the music streaming services. Cloud storage. Home security systems. Meal kits. Dating apps. Pet subscription boxes. And the list goes on.
Odds are, you can probably find a subscription or two to drop and save some money every month. But how do you go about doing it?
Option 1: You could pore over your bank statements to try and find recurring payments. (Check out the charts from Waterstone below for some ideas of expenses to look for and how much they’ll typically set you back.)
Option 2: Look for a service that will negotiate bills and cancel subscriptions on your behalf. Some companies let users connect their financial accounts, and have an algorithm do the work of identifying recurring expenses and offering ways to cancel or discontinue them.
Truebill, for example, says it saves its average user more than $500 per year by helping them find and cancel abandoned subscriptions. (The app and statement review are free, but fees apply if you want Truebill to do the legwork of canceling or negotiating for you.)
Whether you DIY or call in help, nixing a subscription or two can result in hundreds of dollars in savings over the course of a year.
“The average subscription we see being canceled is around $11 or $12,” says Smyth of Trim. “But people forget about these things for the longest time—if you have a $12 subscription for two years, we’re talking a chunk of change.”
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