Saving money in 2023? How to reassess, reduce subscriptions

As 2022 draws to a close and the cost of living continues to rise, many Canadians are looking for ways to cut spending — and some are looking to cut back on subscriptions.

But with subscription services offered in nearly every category these days, it can be hard to know exactly how much you’re spending on a monthly basis.

As the new year dawned, freelance writer John Loeppky took stock of his finances and noticed a long list of regular credit card charges.

« He can very easily slip away from you, » he said.

For business and personal use, Loeppky had lost count of how many subscription services he was paying for. While many of them are services he needs, uses often, or values ​​he needs to maintain, there are a few he didn’t use and a few he forgot to cancel.

It’s tempting to see a charge on your credit card and tell you you’ll deal with it later, he said, but when you do the math, all those subscription payments add up to the equivalent to a few mortgage payments each year.

« It’s that thing where it’s a death by a thousand cuts. »

Subscriptions are not a new concept, but nowadays you can subscribe to almost anything. You can get wines of the month, novelty cereals, or even specific products like moisturizer on a recurring basis. You can subscribe to receive regular deliveries of shampoo and conditioner, dog treats, and printer ink. And then there are the less tangible subscriptions, like online storage, password managers, and – perhaps ironically – budgeting apps.

One of the most popular subscription categories is, of course, entertainment. An October poll by the Angus Reid Institute found that more than four in five Canadians have at least one streaming service, up from about half in 2016, as more people switch from TV to cable and satellite to digital options. (The poll also found that some Canadians are reducing their streaming subscriptions in response to rising costs of living.)

These streaming subscriptions may not be expensive individually, but Angus Reid found that 23% of Canadians have three, while 17% have four. Say you have the basic packages for Netflix, Crave and Disney+; you would pay over $40 per month for these services alone.

Add a meal kit for two, razor blades, a self-interest subscription box, Spotify or Apple Music, cloud storage, a Patreon subscription for your favorite podcaster, a few press briefings, a subscription to a audio book and the premium tier of a food delivery app – you might be looking at another $200 or more per month.

In fact, there are so many subscription options that there are now apps to help you manage your subscriptions (and some of those apps are subscriptions themselves).

Companies seem to have realized just how lucrative the subscription model can be, Jessica Moorhouse, money expert and host of the More Money podcast, said in an email.

« Like a lot of other Canadians, I definitely fell into the trap of having just about every TV subscription available, » Moorhouse said, adding that she’s also subscribed to Spotify and a fitness app.

Because she tracks her expenses, Moorhouse finds herself with plenty of opportunities to review her monthly expenses and cut back on those that aren’t worth it.

Often people don’t even know how many subscriptions they have or how much they cost on an annual basis, she said.

If you’re trying to cut subscriptions, Janet Gray, a financial planner with Money Coaches Canada, said you should see if any of the ones you have offer a « pause » option. This way you can try going a few months without them to see if you really miss them.

While some subscriptions offer a discount if you pay for a year, Gray recommends taking the monthly option if you’re having trouble keeping up. That way, you can better control your subscription costs and avoid a nasty annual surprise, she said.

If you signed up for a free trial, Gray said you should set a calendar reminder immediately to unsubscribe so you don’t end up with a surprise fee.

And while a lot of people put those payments on their credit card, if you’re struggling to get into debt or find it a little too easy to say yes to subscriptions because they’re on credit, she said you can try putting subscription payments on your debit card instead.

You can also check out family versions of subscriptions like Netflix or Spotify to help everyone save a few bucks.

If you feel the need to subscribe to something, Moorhouse recommends that you take the time to think about it and figure out how it might fit into your budget. You can even write what you want to subscribe to and ask yourself why – was it an influencer post? An advertisement? A friend’s recommendation?

« That way you can look back in time and see a pattern. For example, if there’s a particular influencer that you follow and you find they’re really good at influencing you to buy things, maybe it’s time for you to mute or unsubscribe to regain control of your spending. »

If you want to get a full picture of all your subscriptions, Moorhouse said you should check a year’s bank and credit card statements so you don’t miss a thing.

« The questions you need to ask yourself are ‘Can I afford this?’ and « Am I still getting value or joy out of it? », she said. If the answer is no, cut the subscription — and you probably won’t miss it.

« Also, if your financial situation improves and you really miss it as part of your life, you can always re-subscribe. Cutting something from your budget doesn’t have to be permanent. »

This report by The Canadian Press was first published on December 29, 2022