Are Subscriptions Cutting into Your Retirement Savings?

From Hulu to Disney+, many households have come to rely on streaming services for convenient sources of home news and entertainment. While some subscriptions can enhance your daily routines and experiences, they can also sneakily erode your retirement savings. The good news is that you may not need to cancel all of your subscriptions just yet.

A solid strategy to maximize your retirement savings is to eliminate unnecessary expenses. On average, Americans spend over $200 on monthly subscriptions.¹ There’s a good chance that you have more than one subscription service. And there’s also a good chance that you’re spending money on services you've forgotten about or that are automatically renewed without your knowledge. How does your subscription spending compare to that of the average U.S. household?

What can you do to help minimize these expenses and manage recurring payments to keep your expenses under control, while enjoying all the benefits of your subscriptions? Consider these tips for managing your subscription payments:

• Use the same card for all of your subscriptions - Putting all of your subscriptions on the same card can make it easier to keep track of your payments. You can choose to get a new card just for subscriptions, or put them on a card that you don't use often.
• Sync your billing dates as much as possible - If your budget allows, paying your subscriptions on the same date can simplify your expenses. However, if this will strain your budget too much, you can spread the payments out into more comfortable intervals.
• Remember your free trials - Free trials can allow you to explore a subscription's features before taking the financial plunge. If you sign up for a free trial, be sure to note the end date (preferably on a calendar tool you use regularly), especially if you don't plan to continue the service. Otherwise, your credit card may be automatically charged once the trial ends.
• Watch for price increases - Over time, your subscription prices may increase. Although you should receive some notification before that happens, it's wise to check your statements regularly to ensure that you are paying only what you expected, or that your account hasn't been charged multiple times in the same period.
• Audit your subscriptions - Maybe you signed up for Apple Music because you wanted to transfer playlists between your iPad and iPhone easily, or you splurged on an Max subscription to finally watch The Sopranos. If it's time to cut back, you can begin by making a list of all your current subscriptions. Whether you pay a monthly or annual fee, go through your statements and note any subscriptions that you no longer want or need, then cancel (or don’t renew) the ones that don’t make the cut.
• Disable auto renewal/check for a one-time payment option - Automatic renewals can be convenient if you're enjoying your subscription. But if you're not sure you want to continue using it, you'll need to cancel before the auto-renew date. Otherwise, you may be automatically charged for the subscription. Before a company can automatically renew your account, it should remind you when your subscription expires. Be sure to cancel the renewal if you do not wish to continue your subscription.

Another option is to make a one-time payment. A significant advantage is that, unlike recurring subscriptions, you can pay a one-time, upfront fee that enables unlimited access to your favorite content. One-time or lumped payments sometimes offer a better deal than monthly subscription fees. However, this might not be an ideal option if you're on a tighter budget or if you are unsure if you’ll use the subscription enough.

Cutting subscriptions can have a positive impact on your retirement savings, but keeping track of them can be tricky. If it's time to curb your subscription expenses, a subscription management app can help. Here's how.

What's a Subscription Management App?

These apps can help you track how much money you're actually spending on subscriptions. Some can even cancel unnecessary subscriptions for you. There are many options available, so explore some providers and decide which is best for you.

Subscription services can offer convenient ways to improve and enhance our lives. However, properly managing them is essential if you want to limit their impact on your overall spending and savings goals, especially when you’re saving for retirement. By evaluating your expenses and budgeting according to your personal preferences, you can enjoy the benefits of subscriptions while ensuring they don't disrupt your financial future.

Remember that your financial choices today can directly impact your retirement, so striking the proper balance is key to securing a comfortable retirement without sacrificing the creature comforts you want to enjoy today. Let’s chat about how you can maximize your retirement savings by effectively managing your subscriptions.

^{1) LaPonsie, Maryalene. "Track and Manage Subscriptions With These 9 Apps." U.S. News, 9 May 2023, https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/track-and-manage-subscriptions-with-these-apps.}

^{This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.}