Subscription overload? Ways to manage services and payments

From shopping and entertainment to meal delivery and health and fitness apps, there's a subscription for just about everything. But do you know how many you’re signed up for and how much you’re spending on them every month?

According to recent data, the average consumer spends nearly $220 per month on subscriptions.¹ But here’s the catch: Consumers underestimated their monthly subscription spend by more than $130, with 42% of respondents claiming they had forgotten about a recurring subscription they were still paying for and 20% feeling overwhelmed with the number of subscriptions they have.¹

So how can you better manage subscriptions? Read on for possible ways to evaluate and handle your subscriptions and potentially save money.

What are subscription services?

A subscription is a business model where a company charges a recurring fee to access its products or services, which could be monthly, quarterly, or annually.

Here are some common examples of subscription services:

• Video, music, and entertainment streaming platforms
• Gaming services
• Cloud storage services
• Beauty product subscriptions
• Book subscription services
• Meal plan delivery subscriptions
• Online fitness classes and workout plans
• Software subscription services
• Food, wine, and gift subscriptions
• Pet supplies subscription boxes
• Magazine and media subscriptions
• Healthcare apps

How do subscription services work?

After a customer signs up for a subscription online or through a mobile app, they are typically charged automatically on a regular basis. Many subscription services also offer free trials, promotional periods, or tiered pricing options to attract new customers and retain existing ones.

Check out an overview of common subscription types and how they work:

• Standard subscription plans. This is one of the most common types of subscription services, where customers pay a recurring fee for access to a product or service for a set period, typically a month or a year.
• Pay-as-you-go plans. With this type of plan, customers pay for each individual use of a product or service. Examples include pay-per-view movies or games and prepaid mobile phone plans.
• "Freemium" and tiered plans. Freemium plans offer a basic version of the product or service for free, while premium features are available for a fee. Tiered plans offer different levels of access and features for different pricing levels.
• Free trials and promo periods. This type of subscription allows customers to try a product or service before committing to a subscription. Promotional periods may also be offered, when customers can access a product or service for free for a limited time. Often, these trials or promos will automatically continue into a full, paid subscription if you don’t cancel at the end of your promotional period.
• Usage-based plans. With this type of plan, customers only pay for the amount of product or service they use. Examples include mobile phone data plans or software usage plans.

Tips for managing subscription payments

Wondering how to manage recurring payments, bills, and subscriptions? Consider these best practices:

• Keep a list of your subscriptions. Make a list of all your subscriptions and the recurring payments to help you track your expenses and avoid unexpected charges. This can also be a useful thing to track via an expense tracker.
• Consider using a subscription management tool. These tools can help you find and cancel subscriptions you no longer need without having to log in to each separate platform.
• Review subscriptions regularly. Review your subscriptions every few months to ensure you're still getting value from them. Cancel any you're no longer using or don't need.
• Set up alerts. Many subscription services allow you to set up alerts for upcoming payments.
• Be mindful of free trials. If you signed up for a free trial of a subscription, be sure to cancel it before the trial period ends if you don't want to continue with the service. Otherwise, you'll be automatically charged for a full subscription.
• Use one payment card. Consider using a single payment card for your subscriptions, so you can see all your payments in one place.
• Disable auto-renewal. Make sure to view your account settings and deselect the auto-renew option. This way, you’ll receive an alert about an expiring subscription instead of making an automatic payment.
• Review terms and conditions. Read the fine print before signing up for a subscription, so you know exactly how to cancel should you no longer need or want it.

Tips for auditing your subscriptions

With so many options for subscription plans, it’s easy to forget which ones you’re paying for — and even easier to forget the ones you’re no longer using. Auditing your subscriptions can be a great way to ensure you’re not losing money on things you have no use for.

To audit your subscriptions, you could start by:

• Reviewing your bank and credit card statements. Go through your financial statements for the past year and highlight all your subscription payments. This can help you identify any subscriptions you may have missed in your initial list.
• Evaluate each subscription. For each subscription, evaluate whether you're still using it and getting value from it. Consider whether there are any similar services that offer the same features at a lower cost.
• Cancel unnecessary subscriptions. Cancel any subscriptions you're no longer using or don't need. If you're not sure whether you should cancel a subscription, consider whether you would sign up for it again if you didn't already have it.
• Check for unwanted paid apps. Beyond reviewing your financial statements, you could go to your smartphone’s settings and check for unwanted paid apps. You may be surprised at how much you’re paying for apps you rarely use.
• Consider sharing subscriptions. If you live with roommates or family members, consider sharing the cost of subscriptions to save money. For example, you could split the cost of a streaming service or a meal kit subscription.

Looking for ways to finesse your finances? Learn how PayPal can help you manage your money here.