‘Do I really need it?’ That’s the question Australians are being encouraged to ask, with research showing one in three people are paying for subscription services they don’t use.
Australians love subscription services. Six out of ten of us have signed up for subscriptions or memberships, with 52% of people admitting to signing up for more during lockdowns according to a recent survey undertaken by ME.*
Unsurprisingly, the survey findings confirm that on-demand TV, movies and music streaming take the gong for the most popular subscriptions. And it turns out Gen Xers are the biggest subscriber fans, forking out an average of $2,196 annually for everything from streaming to gym membership.
However, the study also reveals that unused subscriptions are blowing a hole in some household budgets.
Once signed up, soon forgotten
According to ME’s findings, over one-third of Australians who’ve inked a subscription deal aren’t using the service at all, and it’s costing an average of $200 annually in dead money. Among Gen Xers, the budget black hole of unused subscriptions jumps to $570 annually.
It’s not just that we’re signing up and not using subscriptions. Almost half (48%) of all respondents admit they’ve forgotten about at least one subscription service.
Stop the sting of autorenewals
Signing up for multiple subscriptions can take more than a financial toll. ME’s study found almost two out of five subscribers report feeling ‘overwhelmed’ by the number of services they’re paying for.
While one in two subscribers have plans to cut back, the sting in the tail can be autorenewal. That’s where the subscription fees keep clicking over even after the initial sign-up period has ended. It can be especially irritating for consumers who sign up for a ‘free’ trial, only to find themselves forking out indefinitely for a service they don’t use.
ME’s Money Expert, Matthew Read, says, “Autorenewals can catch many people out. When signing up for free trials it’s a good idea to set a reminder to review the service prior to the trial’s end date.
“If you take out a new subscription, make a note of the autorenewal settings, so it doesn’t sting you later down the line when you may not be using the service.”
Weigh up the value
There aren’t many times in life when we willingly pay for a product we don’t use. But that’s exactly what’s happening with some subscription services. In particular, ME’s results show the least used subscriptions or memberships are:
- on demand TV/movie streaming
- IT storage or software programs, and
- music streaming services.
Fortunately, there’s a simple way to beat the cash drain of unused, unwanted or forgotten subscriptions. Set a diary date to regularly review subscriptions and weigh up whether you’re paying for a service that’s not bringing much joy.
‘Subscriptions can add value, entertainment and convenience to our lives,’ says Read. ‘But it’s important to work out how much you spend on them and be realistic about whether you’re getting good value for money. The cash saved by cancelling a couple of unused subscriptions could go towards bigger financial goals.’
Members Equity Bank Limited ABN 56 070 887 679 AFSL and Australian Credit Licence 229500.