Subscriptions have become a significant part of our spending habits. While they offer convenience and access to services, they can also drain your finances if not managed properly. Here’s why subscriptions keep you poor and how you can use Rocket Money to regain control over your finances.
Why Subscriptions Keep You Poor
1
Accumulation of Small Costs
Individually, subscriptions might seem affordable, but their cumulative cost can be substantial. A few dollars here and there quickly add up, impacting your overall budget.
Example: A $10/month streaming service, a $5/month app, and a $15/month gym membership collectively cost $360 annually.
2
Automatic Payments
Automatic payments make it easy to forget about subscriptions. You might not even realize you’re still paying for services you no longer use.
Example: You signed up for a free trial that auto-renewed into a paid subscription, and you forgot to cancel it.
3
Overlapping Services
It’s common to subscribe to multiple services that offer similar benefits, resulting in unnecessary expenses.
Example: Paying for both Netflix and Hulu when one would suffice.
4
Price Increases
Many subscriptions start with a low introductory price, which increases after a few months. These increases can go unnoticed, especially if you aren’t regularly checking your statements.
Example: An introductory rate of $5/month for a service increases to $10/month after six months without you realizing it.
5
Neglecting Free Alternatives
There are often free alternatives to paid subscription services that can serve your needs just as well.
Example: Free exercise videos on YouTube versus a paid fitness app.
How to Overcome Subscription Overload with Rocket Money
Rocket Money (formerly Truebill) is a financial management tool designed to help you manage your subscriptions and take control of your spending. Here’s how you can use Rocket Money to identify and eliminate unnecessary subscriptions:
1
Download and Set Up Rocket Money
- Step: Download Rocket Money from the App Store or Google Play and connect your bank accounts and credit cards.
- Action: Rocket Money will automatically scan your transactions to identify all your subscriptions.
2
Review Your Subscriptions
- Step: Once Rocket Money lists your subscriptions, review each one carefully.
- Action: Ask yourself if you still use the service, if it’s worth the cost, or if there’s a cheaper or free alternative.
3
Cancel Unnecessary Subscriptions
- Step: Use Rocket Money’s built-in feature to cancel subscriptions directly through the app.
- Action: Cancel any subscriptions you no longer use or need. Rocket Money can handle the cancellation process for you.
4
Monitor Price Increases
- Step: Rocket Money will alert you to any price increases in your subscriptions.
- Action: Review these alerts and decide if the service is still worth the new price. If not, cancel it.
5
Set Budget Alerts
- Step: Set budget alerts within Rocket Money to notify you when you’re approaching your spending limits.
- Action: Use these alerts to keep track of your spending and avoid exceeding your budget.
6
Utilize Free Alternatives
- Step: Research free alternatives to the services you’re paying for.
- Action: Replace paid subscriptions with free options wherever possible. For instance, switch from a paid news subscription to free online news sources.
7
Negotiate Lower Rates
- Step: Rocket Money offers a service to negotiate lower rates on your subscriptions.
- Action: Allow Rocket Money to negotiate on your behalf to reduce your monthly subscription costs.
8
Regularly Review Your Expenses
- Step: Make it a habit to regularly review your expenses through Rocket Money.
- Action: Schedule monthly reviews to ensure you’re not overspending on subscriptions and adjust your budget as needed.
Conclusion
Subscriptions can be a hidden drain on your finances, but with the right tools and strategies, you can regain control. Rocket Money provides a comprehensive solution to manage and reduce your subscription costs. By reviewing your subscriptions, canceling unnecessary ones, and utilizing free alternatives, you can significantly cut down on expenses and improve your financial health. Take action today to ensure your subscriptions serve you, not the other way around.
