By Kevin M
We?re taking on this weekly forum as a way of exchanging ideas to help lower the cost of living. This includes expense reduction and elimination, but goes beyond, even to include lifestyle changes that may bring savings on a number of fronts. Ideas on ways to cut personal, household or business expenses are welcome!
Hopefully, at this point, we?ve all learned that memberships and subscriptions mostly benefit the merchant by keeping us on board as loyal customers, whether or not we actually use what it is we?ve paid for.
If you?re a heavy user of a certain service, a subscription or membership can prove to be a real cost advantage. But never assume you?re saving money just because you?re in the plan. More significantly, if you have several subscriptions and memberships, it?s highly unlikely that you?re getting much benefit from all or even most of them.
A Real Life Example
A number of years ago my wife and I canceled our subscription to the local newspaper. With two kids and two full time jobs neither of us had a whole lot of time to read it. In addition, we found much of the content to be disturbing and disagreeable, and most of the news we really wanted was available on the internet anyway. But more significant perhaps, canceling the service saved us about $250 per year.
The sad fact is that we kept the paper coming for a couple of years longer than we needed to. The reasons were the typical ones. We?d always gotten a newspaper and it was like a part of our lives. If you tried to cancel, the circulation department came looking for you and it seemed easier just to keep the subscription than to deal with them. And then of course, there were the coupons?how could we get by without those?
We got over the fixation of having a paper just because we had always had one, and the Do Not Call legislation made the circulation department kind of go away. Meanwhile, with circulation in decline, the local paper distributes a free ad package once a week, that includes a generous amount of coupons. We supplement what they give us by buying a Sunday edition once or so each month, just for the coupons.
The point is, we kept the paper as long as we had with only one tangible benefit: the coupons. But in the end, we found far less expensive ways to get coupons without having to pay the expense of a 365 day subscription that we otherwise had no use for.
A Subscription For Every Product
I suspect it?s that way for a lot of people who have subscriptions and memberships. There?s the Netflix subscription that you used twice a week when you first signed up, but now you might use it once every other month. Or the gym membership you paid for hoping it will get you motivated to work out (but it hasn?t happened yet). Or the premium cable TV package with 300 channels that you?re paying over $100 a month for, even though you only watch 20 of them.
Or how about that magazine subscription you took out a couple of years ago that faithfully delivers it?s monthly edition to your mailbox, after which you do a quick 90 second flip through, promising yourself to read it when you have time, before adding it to the pile of unread magazines sitting in a rack in your living room.
Still another are the discount shopping clubs, rewards programs and related schemes, the primary purpose of which is to get you to spend more than you ordinarily would in order to accumulate certain benefits. Though there may be no fee (or just a nominal one) to belong, the added cost comes in the form of the extra purchases you make in order to make the program ?work?, which usually is the point at which the benefits become substantial. If you need to reduce expenses, no plan is in your best interest if it encourages or requires you to spend money in order to gain a certain benefit.
Those are just a few examples. But eliminating them can save you hundreds of dollars, and might even free up some of the time you spend on them, if you do at all. But spending an hour or two finding out how many you have, and how much you actually use them can be time well spent. If your usage turns out to be only occasional, or worse, it?s one of those memberships you keep around ?just in case?, just get rid of it. Sometimes we keep subscriptions and memberships for no other reason than as a way of justifying our original decision to join.
Personally, I find ?pay as you go? to be the better way to handle buying most products or services, and I can only handle so much in my life. This is especially true if you need to save money, as most of us do these days. You?re rarely saving money if you?re locked into a plan of any sort. Yes, you may save more money on a per unit basis buying a package, membership or subscription, but that effort is mostly a waste of money if you use the product or service only occasionally.
What are some changes you?ve made or plans you?ve implemented to lower living or business expenses? What expenses have you been able to reduce? Are there any you?ve been able to eliminate entirely? Big ideas, small ideas, they?re all worth exploring.