Have you ever considered how much your monthly subscriptions are impacting your budget? An exclusive survey conducted by CNET reveals that US adults, on average, spend $91 on subscription services each month. This has given rise to a phenomenon known as 'subscription creep,' where consumers end up paying for services they no longer want or need. Companies often raise the prices of their services without much notice, usually coinciding with the launch of new features. As these trends continue, the costs associated with recurring memberships and subscriptions are likely to keep increasing.
The survey explored the various types of services consumers typically pay for, with the most common being streaming services, e-commerce memberships such as Amazon Prime, and music subscriptions. It also delved into how consumers manage their subscription expenses, communicate price changes, and their preferred payment methods. Astonishingly, 48% of respondents admitted they had forgotten to cancel a subscription after a free trial, with some experiencing this more than once a year. Millennials and Gen Z are the most prone to this oversight, with 65% and 59% of respondents, respectively, acknowledging they forgot to cancel a free trial at least once.
Managing subscription costs effectively is a priority for many. Nearly 60% of surveyed individuals actively monitor their subscription expenses. Strategies include looking for deals or cheaper alternatives (31%), pausing subscriptions as necessary (24%), and bundling subscriptions together for better deals (17%). Simplifying the management of unnecessary subscriptions is crucial. CNET offers guides on the best internet and TV bundles and how to stream affordably to assist in tightening your budget. Moreover, the Federal Trade Commission (FTC) is introducing a 'click to cancel' rule to make the cancellation process easier.
Inflation has been driving price increases across numerous sectors, affecting subscriptions as well. Our survey revealed that 67% of individuals noticed price hikes in their subscription services over the past year. While some degree of subscription creep is expected due to inflation, it can catch consumers off guard, especially when their financial situation is stringent. For instance, Amazon Prime's pricing evolution from $79 annually in 2005 to $139 in 2022 aligns with a 50% inflation rate in the US dollar. Still, even small price increments can significantly impact tight budgets.
To help you better manage subscription creep, the upcoming FTC rule aims to facilitate easier cancellation of unwanted subscriptions. This change could also reduce pressure on consumers to sign up initially. With easier processes for cancelation, the necessity to pay for services you no longer require is minimized. Using a budgeting app can also assist in monitoring and managing subscription costs. Rocket Money, recommended by CNET's editors in 2024, offers features like bill increase tracking and negotiation.
As the holiday season approaches, evaluate if all your streaming subscriptions are necessary. Rotating methods—canceling services when not in use and re-subscribing later—ranked as a popular cost-saving strategy among survey participants. This period is ideal for pre-holiday cleanup, both in your physical space and your financial obligations. Dedicating time to review your monthly subscriptions could lead to significant savings, making the endeavor worthwhile.
