The pesky money trap that might be ruining your budget

So, you thought you would try out a new product that had a free trial and you threw in your credit card details with a self-promise to cancel it before the trial ends? But then you forgot…

Join the club! According to a 2019 study by Rest Super, “three in five Australians (62 per cent) are wasting money on subscription services they either don’t use or have forgotten.”

This wasn’t so much of an issue when all you had was an unused gym membership but now there’s everything from Netflix to Hello Fresh to Audiobooks and everything in between.

The subscription sting

No one knows the sting of sneaky subscriptions better than Nicole, who was unknowingly losing hundreds of dollars a month to subscriptions.

“It wasn’t until I set up transaction alerts on my bank account, that I realised I had small amounts coming out on a regular basis. It was $4.99 here and $7.99 there but trust me, it all added up at the end of the month.

I had subscriptions like Netflix and Spotify that I was aware of but all the other ones I had no idea about. I thought they were “one-time purchases” that obviously turned out to be much more.

After some researching (ahem, Googling), I found the businesses that were charging me and luckily, I was able to cancel the subscriptions.

I totally understand they weren’t doing anything wrong as the subscription conditions were detailed in the T&Cs (which I didn’t read thoroughly and that I was only told about while cancelling) but it left a bad taste in my mouth and I doubt I will be buying anything from those businesses again.”

Rise in subscribers and subscription services

Despite a constant stream of stories similar to Nicole’s on Facebook, Google and Trustpilot, there are more Aussies using subscription services now than ever before. According to a 2019 survey conducted by Harris Pollon, more than two-thirds of Australians had subscription services, up from 49 per cent just five years earlier.

Why? Well as the survey indicates, consumers are moving towards valuing access, freedom and outcomes over ownership. Subscriptions not only give people a choice in how they pay, but also the flexibility to pause and resume services whenever they like (if they remember, of course).

So, it looks like subscriptions services aren’t going anywhere, anytime soon. In fact, Australia’s subscription “recurring-revenue business model” is only expected to increase in the future.

So, how can you stop sneaky subscription charges?

Check your bank statements and see what you are paying each month that you might have forgotten about.

How many of these subscriptions do you have?

• Apps e.g Facetune, HotSchedules, TouchRetouch.
• Food and wine services e.g. HelloFresh, Chef Good, Naked Wines, Good Pair Days.
• Streaming e.g. Netflix, Stan, Binge, KO, Hulu, YouTube, Spotify, Apple music.
• Digital books and magazines e.g. Magzter, Audio Books, Readly.
• Home gym workouts e.g. Centr, Strava, Sweat, TIFFXO, 28 by Sam Wood.
• Beauty and lifestyle e.g. anti-aging products, slimming pills, health foods, Fabletics.
• Delivery e.g. Catch of the day, Kogan, WellRead, Woolworths, Coles, Amazon.

How do I cancel any unwanted subscriptions?

The best way to cancel your subscription is going directly to the provider. And be sure to get the cancellation in writing, in case of any future disputes.

How do I avoid sneaky subscriptions in the future?

It’s all about being aware of what you are signing up for. I think we have all been guilty of skimming through the fine print like Nicole, but it’s so important to give the T&Cs a proper read before handing over your bank details.

It also pays to set yourself a reminder before your free trial ends, so you can decide whether you want to keep going with it or not before you start getting charged.

And setting up automatic alerts for payments on your cards is also a good way to keep tabs on where your money is going (it’s how Nicole found all those hidden charges).

But most importantly, make sure you regularly monitor your bank account to keep an eye on any unexpected charges and cancel those subscriptions that you aren’t using - your budget will thank you.