I read an article the other day on Wall Street Journal that got me thinking. I know, save your jokes – me reading or thinking! Anyway, the article talks about a 30 something who checked his finances and realized he was spending thousands of dollars on unwanted subscriptions. Sound familiar? Well, read on reader.
This article got me thinking, as I mentioned since I know I sign up for subscriptions myself. I started doing a little mental inventory Apple TV- check, Disney Plus- check, Netflix- check (just kidding I still use my mom’s), and the list goes on. Kids reading apps, music services, Amazon Prime (b.c I am an American) check, check, check. Then, I did the unthinkable. I actually continued down this rabbit hole and opened up my (and even worse my wife’s) credit cards. Oh boy, was I in for a rude awakening, and I mean awakening.
Besides, like, two million dollars worth of Amazon Prime purchases, I noticed all sorts of random charges. The worst thing was there were a ton of recurring ones I signed up for years ago. Adding salt to the wound, probably 2/3 of them I never even used! As I went in to try to cancel them all, and tally them up, the number was staggering (so much so I’d rather not share here today).
In the spirit of Halloween, this was some scary freaking stuff. Although I felt like the world’s biggest dummy, it was kinda therapeutic to go in and win one for the Gipper. I felt like I had control back and quickly did what any rational financial planner would do.
1. Increased my savings in the amount I was spending on these terrible things. As I figured I wasn’t missing the money as is, might as well make up for the lost time.
2. Write a blog about it telling the world to do the same.
Where to begin – Subscriptions and Hidden Fees
So, the question at hand is where to begin. For starters, I would say there are two areas to really take inventory of. One is going to be these innocuous subscriptions, and two is hidden surcharges on accounts. What I find generally happens is one of a few things.
- We sign up for something and simply forget all about it.
- We take some promotional offer that gives us 6 months or a year free as long as we keep a credit card on file. These credit cards are for autorenewal, and of course no one checks the damn thing.
- We don’t realize we signed up for something as we must have fat fingered a subscription years ago, yes this happens (as he lowers his head in shame).
- We didn’t realize that we are getting tagged with some sort of late fee or hidden fee on something we did sign up for or are paying.
Do any of these, or all of these sound familiar? Well let’s talk about what to do about it, shall we?
Take the power back of your Finances
Alright, let’s really talk about how we can take the power back of our finances. For starters, unless you are a finance nerd like me this will be painful. I suggest pouring a nice glass of red wine, bourbon, or putting on some soothing music. Next, read below.
- Either print out or login to all your credit card and bank statements. I’d suggest going back 6 months, but a full year is truly best.
- Go through all the items line by line and see which are recurring payments. Most credit cards will spell out which are recurring or not.
- If you are lucky your credit card will have a section, like some of mine, that shows you what vendors have my credit card on file and are auto-drafting.
- Take inventory of all of them and cross reference if you still want to keep them all, I’d be shocked if there aren’t a few wasteful ones in there.
- Some you might even want to keep, but by having your spouse sign up you could get a brand new introductory offer.
- Then do the same exercise with late fees. A big one I see a lot is ATM fees (or MAC machines if you are Jersey proud). Hint, there are tons of banks that refund these fees like TD Bank so there is no reason you should be paying them.
- If this truly isn’t your forte, download one of the many apps like Truebill or Trim to assist. There are many out there like them. Basically, they attach to your credit cards and bank statements to help sniff out these unwanted subscriptions.
What is next
For starters, send me a big email thanks and 1,000,000 points to whoever saves the most. Then, do like I did and instantly put those dollars to use. They can help do something productive financially like pay down debt, invest for retirement, put towards college use, or even give more breathing room on a month-by-month basis.
Here is a horror story from one of my closest friends. He went to refinance his house and was told his credit was terrible. Baffled by this, as he does very well for himself, he inquired why. Apparently, the car dealership was pulling his car payments late each month. This caused the ultimate double whammy. Not only was he getting hit with late charges every single month, but in addition is was literally killing his credit score to boot.
So don’t be like me, or my friend, or even that poor guy in the WSJ article that kick-started this entire thing. Happy hunting and enjoy the new cash!
Stay wealthy, healthy, and happy.
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