Are Hidden Subscriptions Eating Away at Your Budget?

Key Takeaways   

• Conduct regular budget audits to identify forgotten subscriptions and recurring charges draining your monthly spending. 

• Review bank and credit card statements for the past three months to spot recurring charges you no longer use. 

• Cancel or rotate subscriptions strategically. Bundle services when possible and pause subscriptions between seasons to maximize savings. 

It may not be top of mind, but with April being Financial Literacy Month, it’s a great reminder to do a quick budget audit (something we encourage you to do once or twice a year). Now is when your credit cards are working overtime. Without much effort, you can find erroneous or questionable charges. You may also find you’re paying for more subscription services than you think. While most cards are not expensive, when you add them all up, it’s not a trivial amount of money. How many of the services are you really using? Do you really need them? 

Trust me, I fell into the same trap. After a long week recently, my wife and I were scrolling through her phone looking for recommendations for streaming shows to watch and relax. “Oh, this one looks good,” she told me, “But darn, it’s on HBO Max.” She was surprised when I told her we had an HBO Max subscription, even though we hadn’t watched it in at least six months. She thought I had cancelled it long ago and was pleased that we could end up watching the show she wanted. But all those months of inactivity added up to more than the cost of an expensive dinner and a movie out.  

That got me thinking about how many other subscriptions we’re paying for and not using. For instance, I signed up for an AI music app a long time ago, because as a musician, it had me very intrigued about its capabilities. I haven’t used the app since, but it’s $10 out the window every month. When I looked at my credit card statement, I saw I was still paying for Mid Journey, one of the original AI image generation services. I had used it a few times when I needed a graphic for a presentation, but had long since forgotten about it.

For some clients, we put together a detailed budget sheet so they can see where their money is going every month. If they want to make cuts, they can see the most appropriate places to do so. Often, cuts are made to discretionary spending, such as purchases from Amazon, but the low-hanging fruit can be found among services you are paying for without even realizing it. 

You can do a self-audit, or we would be happy to help you review your statements. I want you to be aware of some quick and easy ways to trim unnecessary spending. Take your gym membership. “I haven’t gone in five months, but once my life settles down, I’m going to go back,” you tell yourself. And of course you don’t cancel. The gym owner doesn’t care how often or infrequently you come by. They have your credit card, and they charge it like clockwork every month. 

All these micro-expenses add up quickly. I did a budget audit for myself recently, and I found over $100 in subscriptions every month for services I was never using. So, I got busy canceling and can now take my family out for a nice dinner every month on the savings.   Doing a budget audit is pretty simple. Just check your bank statements and credit card statements for the past three months for subscriptions and other monthly recurring charges you’re not using. While you’re at it, check the app subscriptions on your phone. You can track them manually or use apps like Rocket Money that will automatically cancel your unwanted subscriptions. Rocket Money finds your subscriptions by linking to your bank accounts and credit cards, then analyzes your transaction history for recurring payments. By using an algorithm, Rocket Money flags recurring payments that look like subscriptions, displaying them in one place so you can manage them easily.  

Just note you must be a Rocket Money premium “subscriber” to take advantage of this auto cancellation service. Don’t keep paying for it if you’re not using it regularly.  

Free trials are another area where you can rack up lots of recurring monthly charges for products and services you’re not using. When you come across an interesting new product, service, or app, it’s natural to want to demo it (for free) before you start paying for it. Just be mindful of ones that automatically move you to the paid subscription model unless you proactively cancel. It’s a more common tactic than you might think. Again, these charges will show up on your bank statements and credit card statements. Cloud storage services for all of your photos, videos, and music downloads are another area where little-used recurring charges can quickly add up. 

Same thing with App Store renewals. Many apps auto-renew for a year instead of for a month, and they can be hard to get out of. As mentioned earlier, subscriptions to streaming services can really add up. It’s natural to feel you need to have them all, because there's always a new show that everyone's talking about, and so you sign up for the streaming service that carries it and forget to cancel your subscription. The same goes for professional sports. Have you noticed more and more NFL, NBA, and Major League Soccer games being carried exclusively on Apple TV, Amazon Prime, or other streaming services – they’re not on network or cable TV.  

Another way to save money is to bundle certain services, such as Hulu, Disney, and HBO Max, if you’re paying for them individually. If possible, try to bundle or just rotate the subscriptions. Say you only have Hulu for shows like Handmaid's Tale, set a reminder to pause or cancel your subscription once the season is over.  

I get it. Cancelling or rejoining all of your subscription services can be a pain, especially when it’s increasingly difficult to talk to a human customer support person. That’s what the services count on, but if you make a little effort, the savings can really add up. 

Conclusion: If you or someone close would like some help managing your budget, expenses, or monthly cash flow needs, reach out any time. I’m happy to discuss. 

DAN SATZ MS, CFP® is a Partner at Novi Wealth