Periodically, I do a review of the amount of money flowing out of our home. I do this because I find that I still take for granted the little things that add up to become significant over time. The 10-year multiplication method really helps shed light on the amount money we let slip away, so I use this to see the bigger picture of where our money is going over time.
I sometimes think that I am efficient in terms of managing my expenses, but on these periodic reviews, I generally find that life has dragged me down the rabbit hole of cumulative expenses. A surprise that I have been running into is the number of subscription services that sneak into my pocketbook.
We are in an age of subscription plans and it seems like each time I look around, services that we could have purchased outright are now offered as subscription. It is a smart move by companies because it offers them an ongoing source of revenue for as long as we are interested in their service, as opposed to revenue from a one-time purchase. Another method they use is breaking down these subscription services into shorter periods, where instead of paying $100 annually for a service, they present the customer the option to pay $10 per month. Though this shorter period is more expensive, that is, now costing $120 a year, many would opt for the monthly plan because it seems more affordable as it has less of an immediate impact on the pocketbook.
Now, consider that we subscribe to multiple services including more expensive ones, and it becomes evident just how much money is disappearing for the sake of these services. If you do not think you subscribe to any service but enjoy cable services, you may realize that you are renting not only the cable boxes, but the internet modem as well as anything else they choose to throw in.
I am not necessarily suggesting that we shy away from the things we enjoy, but that we manage these subscriptions, such as buying our own modem, if allowed to, and other accessories in the case of the cable services. In this same example of cable services, if you can eliminate $40 in monthly equipment fees, this means you just saved yourself $4,800 over 10 years ($40 x12 months x10 years). That doesn’t even include the taxes and other fees they charge for such items.