There is a kind of cost that leaves the account every month without anybody at home having decided anything that month. It is not the rent, which was decided and renews knowingly. It is the subscriptions: the music service, the two streaming platforms, cloud storage, the workout app, the newspaper, the mailbox with extra space, the phone plan with add-ons nobody remembers.
Each of them was a good decision on the day it was made. The problem is none of them in particular. It is that the decision was made once, and the payment repeats twelve times a year without the question being asked again.
This piece is about asking that question, once a year, in a way that neither cancels what you need nor keeps what you no longer do.
Why do subscriptions go unnoticed?
Because they were designed to, and it works.
A subscription has three features that make it invisible in a budget. It is small, almost always below the amount that would make anyone stop and think. It is automatic, leaving with no action from you. And it is recurring, so the figure you see is the monthly one and never the yearly one, which is the number that matters.
Add to that the fact that many start free. The trial turns into a payment on a day nobody marked, and the first time the subscription costs money is already the second or third time it has left. There was no decision to pay, only a decision to try.
And there is the effect that makes it all worse: subscriptions pile up. Nobody signs up to eight services in a day. They sign up to one a year, each reasonable on its own, and the total is the sum of eight decisions that were never seen together.
Are subscriptions fixed or variable expenses?
They have the shape of a fixed one and the nature of a variable one, which is why they mislead.
They have a date, an amount, they leave on their own: they look like the rent. But the rent is not a decision you make this month, and a subscription is. You can cancel it today and tomorrow it no longer leaves. That is the definition of a variable expense, dressed up as a fixed one.
This matters because, when a budget is reviewed, the fixed costs are the ones nobody looks at: "they are fixed, nothing to be done". Filing subscriptions under fixed hides them from exactly the place where people look for room. The distinction is set out at more length in fixed and variable expenses, and subscriptions are the case that shows it best.
What do subscriptions really cost?
Multiply by twelve, then add them up.
The most useful exercise in this piece takes ten minutes. Open the last two or three months of statements and look for everything that repeats with the same amount and the same name. For each one, write down the monthly figure and multiply by twelve.
With an example household, and round figures so the sum is easy to follow:
| Subscription | Per month | Per year |
|---|---|---|
| Music | 11 | 132 |
| Streaming, platform A | 9 | 108 |
| Streaming, platform B | 8 | 96 |
| Cloud storage | 3 | 36 |
| Workout app | 10 | 120 |
| Digital newspaper | 7 | 84 |
| Total | 48 | 576 |
Forty-eight euros a month looks like little. Five hundred and seventy-six a year is a short holiday, an insurance policy, or the car service paid without touching the credit card. None of the figures changed: the period you look at them over did.
And almost every list is missing a line: the annual subscriptions. They are the ones that surprise people most, because they leave once and are forgotten for eleven months. Look for them across the whole year's statements, not just the last few months.
Which subscriptions should you cancel?
The ones that fail a single question: if you did not have it, would you sign up again today, at this price?
The usual question, "do I use it?", is no help, because the answer is nearly always yes. You watch the second streaming platform twice a month, the workout app was opened in March, you read the newspaper last week. Everything gets used now and then, and "now and then" is enough to keep a subscription forever.
The right question weighs the subscription against the money, not against the use. If you did not have it today, would you go to the store and pay this much for it, every month? If the answer is "no, but since I already have it...", that is an inherited subscription. Cancel it.
Three signs help when the answer is not obvious:
- Two that do the same job. Two streaming platforms rarely both get watched in the same month. Keep one and rotate: cancel one, subscribe to the other when it has something worth watching.
- The one you pay for by the year and use for a month. Plenty of workout and language apps live off this. The annual plan was cheaper per month, provided you used the year.
- The one whose price went up without anyone noticing. The notice arrives by email, and nobody reads the email. If the amount on the statement is not the one you remember, ask the question again at the new price.
And shared subscriptions, in a two-person home?
They get counted once, and decided by both.
It is common for a household to pay twice for the same thing: one person has an individual music plan, so does the other, and a family plan would cost less than both together. Or the reverse: the streaming platform is on one person's card, used by both, and falls into a sum nobody is doing.
In a household that shares its costs, the subscriptions both people use are household expenses and go into the split like electricity or broadband. The ones only one person uses are personal, stay in that person's account and are not up for discussion. Separating the two lists is half the review. The rule for who pays what is in how to split expenses as a couple.
How do you cancel subscriptions without falling back into them?
Through the place they were set up, and with a date in the diary for the next review.
A subscription taken out on a phone is nearly always cancelled in the app store settings, not inside the app itself. One taken out on a website is cancelled in your account on that website. If you cannot remember where you signed up, the statement says who is charging you, and that name is the clue.
Two things stop the relapse:
- Cancel on the day, not at the end of the period. Almost all of them keep working until the end of the month you paid for. Cancelling today loses nothing, and leaving it until the end usually ends in one more month.
- Free trials get their reminder set on the day they start. Not on the day they end: by then you will not remember.
And one review a year is enough. There is no need to look at this every month: what is needed is that, once a year, the question gets asked again of each one.
Is it worth cutting all your subscriptions?
No, and it is one of the surest ways to abandon a budget.
A subscription that passes the question is money well spent: it is something you would choose again, at what it costs. Cutting it to save is trading a cost that gives you something for a saving that takes something away, and a budget that takes without giving does not last.
The point of the review is not the shortest list. It is that every subscription that stays is a decision from this year, not from three years ago. Some households finish the review one subscription down, others four. Both did well, as long as the question was asked.
And the money freed by a review needs somewhere to go, or it disappears the way it did before, just into something else. More on that in where does my money go.
Where to start reviewing your subscriptions, today
Three steps, and the first one delivers the useful shock.
- Build the list from the statement, not from memory. Everything that repeats under the same name. Include the annual ones by searching the whole year.
- Multiply each one by twelve and add them up. The yearly total is the number that makes the review worthwhile.
- Put each one through the question. "Would I sign up to this today, at this price?" The ones that fail, cancel today. The ones that pass, keep, and put the date of the next review in the diary, a year from now.
We keep a page of frequently asked questions about budgeting and everyday money, with a short answer to each one and the full piece one click away. If you want to see it, it is here: frequently asked questions.
This is educational writing. It is not financial advice or an investment recommendation; for advice on products, speak to a professional registered with the CMVM.