Fewer times have felt like I’ve had a more productive weekend than on Friday, February 23rd, 2019. I was scrolling through my Mint.com account and quickly noticed two subscriptions that I thought I had canceled hitting up my account. I was rightfully mad at myself for not having shut down these subscriptions earlier. So, I set off to do something about it.
For the next couple of hours, I put together a spreadsheet of every recurring cost I could find on my and my wife’s accounts and was shocked at how much we were spending. Not only were the monthly costs high, but the annual costs were huge. Annually, we were burning $6,600+ on subscriptions we either didn’t use or didn’t need anymore. It was time for action.
By Friday night, massively annoyed with myself at having figured out how much I was wasing, I vowed with my wife that we would slash all these subscriptions by Monday. This wasn’t as easy as I had predicted. Companies definitely make it harder to cancel subscriptions than you’d like. And actually, this is a strategy that many companies use to ensure that you retain longer to make them as much money as possible over the lifetime of your subscribership.
One example of this was that I had to get on the phone with one company to cancel the subscription, or so the website said. But, once you got on the phone and after long delays, I was told that I actually had to confirm my cancellation in an email to the company. This is kind of crazy when they could have had a button on their website to handle the entire thing, but I have to say they were being good capitalists, and I was the sucker.
Okay, you guys get it – it was time to cancel my subscriptions, but what was making up these $6,600+ in annual costs?
Itemized Subscription Costs
The fun part for me looking back on this exercise was that not only did I save a bunch of cash, but I learned a bit about myself and how easy it is to forget about an ongoing cost. Moreover, I loved doing this because I love diving into the details of expenses.
- I had LinkedIn Professional to hunt for candidates for a job we had at work but forgot to cancel it and expense anything after the first two months after we filled the position. I paid 5 months of fees without being able to get reimbursed without even thinking about it. Annual Savings: $1,600
- The Journal was my splurge as I like their no-nonsense economics reporting, second only to the Economist. (Not a huge fan of Editorials, there or anywhere else). But when I thought about it, I really didn’t need to read it at all anymore as I was really busy at work. – Annual Savings: $467.88
- On the side I had set up some blogs for a project I had been working on with a friend that never materialized any real sales online and there wasn’t any need for WordPress or Shopify hosting, domains, or add-on eCommerce services anymore – Annualized Savings: $360, $360, $360, 216, $131, $107 or $1534 all in!
- At work there was a training platform I was using that I didn’t get reimbursed for called DataCamp (super useful if you’re an Analyst) that I decided to cancel until I could work somewhere that would cover the fees. Annual Savings: $359.88
- Cutting the gym was the hardest because they make it impossible to cancel online or over the phone, you have to physically go to the gym to cancel. My wife and I hadn’t been in over 3 months, so it was time to call it quits. Plus my wife had a subscription to ClassPass as well that was going unused. Annual Savings: $851
- One item that was all my wife was a facial company she had signed up for a monthly facial for, which charged, even more, when you had in-person visits and add-ons. That had to go as she wasn’t using it regularly. Annual Savings: $960
- The rest are really incidental expenses but did add up over time to a hefty sum altogether.
Factoring Opportunity Cost
One thing I did to make the impact of the savings seem even larger was to add a section in the upper lefthand side of my spreadsheet with a note called Annual Opp Cost, referring to a one year opportunity cost of having all these expenses. Put in another way, this is the amount of money my money would make if I invested it and achieved long-term average stock-market returns.
I do this kind of thing alot. It’s mainly a way I try to quantify how much better off I’d be if I wasn’t spending with some of the interest made off that money on top. In this case, the annual amount was $462.74. This assumes a 7% interest rate over only a 1 year period. My previous post on how I usually look at opportunity cost is a quick rule of thumb to multiply the amount spent by 4x and 8x respectively, knowing my money over a 30 year period could be earning between 5% and 7% on average. Considering the raw savings per year are $6600, the 30 year opportunity gain on investing that money at the high end of the market is a whopping total of $52,800.
How often can you say that you saved yourself $52,800 in a weekend?