Finance Basics,  Other Important Stuff

Time To Review Those Pesky Subscriptions!

Its January and even in the valley of the sun, it’s cold outside. Ok – it’s like 50 degreases here, but that almost constitutes a state of emergency! So what better time to start a new January tradition –  Subscription checking!

Subscriptions – you know – those deals whereby if you sign up for a year (or two) you get a “discount.” Subscriptions have been around forever – take magazine subscriptions for example. Others have been around for decades – like cellphone subscription plans and health clubs. Some are newer like music subscriptions (e.g. Spotify) – and my favorite is now Amazon. I ordered some workout paraphernalia and suddenly I’m offered a discount if I sign up for monthly deliveries.

Everyone these days is trying to get us hooked on subscriptions. These sound like great deals – but they aren’t. Companies love these because they know once they have us hooked into paying, most of us are going to forget to ever cancel. That’s right, each month companies robotically reach into our checkbook and take money for things we don’t even use –  and yet it’s totally our fault. We invited them to do it!

I started going through my charge card and checking account statements from last year (yes, we should do this each month – but honestly how many really do) and found I actually have a quite a few robo-expenses: mortgage, HOA, Cell phone, car payment, Spotify, Sirius, internet, Netflix, Sling TV, disability insurance, life insurance and health club. So I started justifying each of these expenses individually.

The essential expenses

I don’t enjoy living in a cardboard box or being sued by my HOA, so mortgage and HOA expenses were off the table- but remember, when looking for a house, it’s important to know what you can afford. Its 2019, and life without a cell phone seems impossible or at least unpleasant– but I don’t want to pay more than needed. So I looked at my data usage and shopped around only to find that for my use, my plan is already the least expensive. I would encourage everyone  to do the same analysis.

Everyone should take a good look at what they are driving. Too often I see recent grads with mountains of debt driving a new German luxury car when a less expensive automobile will get them to work just as well and cost much less to maintain.  I already drive an older Kia Soul, so not too much to be done there; however, insurance costs can very widely – so don’t forget to look at these expenses. I was able to save more than a few dollars by making some phone calls and investing about 40 minutes. Also be sure to check your insurance report. Mine had an error that was costing me a fortune!

If you dont use it, cancel it!

Music options have exploded over the past few years. When I was a resident if you wanted seamless and advertisement free music experience Sirius satellite radio was the way to go. I’ve had my subscription since ~ 2002. Truth of the matter is that over the past few years I’ve switched almost exclusively using Apps – first Slacker now Spotify. It’s on my cellphone for use in the car, my iPad for work and google assistant for when I’m at home. So yesterday was a sad day – I called and canceled my Sirius subscription. Of course they tried to rope me back in with special offers and free this and that. I just said ‘No.’ Everyone should evaluate their music subscriptions.

TIme to review your cable & movie options!

There was a time not too long ago when internet was fairly inexpensive. Over the past few years as speeds have increased and cord cutters have jumped ship on cable TV the price of internet access has skyrocketed.  You do have options. One is to look into other internet service providers in your area and see what they charge. You might be able to convince you current provider to make a deal if there are less expensive options. Spoiler alert – I tried this with Cox and did not have good success – but others have reported their ISP were willing to make a deal so it’s worth a try.

The other option is lower your speed. Most ISPs offer slower packages for lower rates. It only takes 5Mbps to stream an HD move, and yet many default plans provide 300Mbps or more. If you are a gamer, you probably appreciate these higher speeds – otherwise consider switching to a slower plan for a monthly savings. If you still pay for cable TV, look to see if you are really watching all those channels or would a combination of subscription and free over the air HD TV do the trick?

Bojack Horseman is my spirit animal, so it would never occur to me to cancel my Netflix. Besides its probably the one subscription that I actually get my money’s worth. I use it, the kids use it – sometimes on different TVs at the same time. Sling TV however, is a different story. We use it – but not with the same frequency and it costs much more. Well see – it will be on my radar for the next few months.

What about insurance?

If you don’t currently have disability insurance and life insurance then you probably should read my posts on these important topics. Two things occurred to me while I explored these “subscriptions.” First they are essential – but not inexpensive. Secondly, my job offers some insurance and disability options in their benefit package. The questions is: how do these compare to my current offerings. Well, the jury is still out while I read fine print– but since life and disability add up to hundreds of dollars each month its worth exploring. You should check to see if your job offers either of these two benefits.

How about my gym membership?

What do Jim Dahle (the white coat investor), Phil Villarreal (moneyunder30), Alicia Adamcyk (Money) all have in common – besides being smart and well respected? They think you should cancel your health club membership – and they are not alone, it’s a common recommendation among financial advisors. Well, I’m here to tell you that’s dumb. We are in a national crisis – obesity has hit record levels and the cost is staggering. According to the CDC in 2008 heath care costs associated with obesity were estimated to be $147 billion! The annual nationwide productive costs of  obesity-related absenteeism were estimated at $6.38 billion. Obesity is associated high blood pressure, diabetes, heart disease, stroke, gallbladder disease and cancer (endometrial, breast, colon, kidney, gallbladder, and liver).

Let’s look at the cost of a health club membership. My gym costs $29 a month.  If I average the past few months it costs me $1.38 a visit. So for $1.38 a visit I get to exercise, build muscle and burn calories. Since my boys go to the same gym, it also quality time with the kids while setting a good example. Cancel my membership? No way – my goal for 2019 is to use it even more!   I would encourage everyone to become more active in 2019. Of course, exercise is only ½ the equation – eating healthy is important too – but we can discuss that another time.  

So there it is, my new January tradition – reviewing my subscriptions! I saved a few hundred dollars and there is the potential for even more savings if the insurance options pan out. Well see about the Sling TV – its nearing the chopping block. What to do with these new found monies – save them of course!