This article was reprinted with permission from NerdWallet.
Sarah Pekkanen allowed her son to sign up for an educational subscription online. She figured that she would cancel it before the charges started and her son, now 12, could learn math while she was gone. She forgot to cancel and soon, the charges began to mount up.
Pekkanen, a Chevy Chase novelist, said that she paid for something we had never used. It took her several days to cancel the charges after she noticed them.
Pekkanens are increasingly familiar with subscriptions to streaming services, product boxes, and other monthly offerings. UBS Group UBS (+0.66% ), a financial services company, predicted that the subscription economy, which targets consumers and businesses, will grow at an 18% rate and become one of the fastest-growing industries in the world by 2025. Subscriptions that auto-renew can lead to consumers spending hundreds of dollars each year on services or products they don't use.
Subscribe to a detox
A subscription detox is a great way to stop this wasteful spending.
Allison Baggerly, a Houston resident and founder of Inspired Budget, says that if you remove all of them, you can then pick and choose which ones you want to add in. She recommends taking the time to stop signing up for subscriptions before you sign back up.
Zina Kumok is a certified financial counselor and money coach, based in Indianapolis. She enjoys doing that type of financial spring cleaning once every quarter.
She says that the best way to fight inertia about auto-renew is by increasing awareness of what you are actually using and enjoying. Kumok signed up to a subscription for makeup, but she realized that she didn't use the products. So she cancelled it.
It is also worth looking at how much your monthly subscriptions cost you each year. While $10 per month may not seem like a lot, you might prefer to have $120 more in your bank account at year's end.
MarketWatch also has this information: A hot dog will cost you 36 minutes of healthy living, while a portion of nuts or seeds will add 25 minutes.
You can also try a less radical approach.
A total detox may sound extreme. You can also try a gradual approach: Take a look at all subscriptions you have and cancel any that you don't want.
Delia Fernandez is a certified financial planner who charges a fee and can help you determine how much you are spending. She suggests that you also check your subscriptions in the app store and, if you are an Amazon AMZN +2.06% customer look for subscriptions such as Audible or Amazon Music.
She suggests that you manually check each subscription for when it renews and how much it costs. Then, cancel it if it is not necessary anymore. Fernandez also mentions that certain apps like Truebill or TrackMySubs will automatically check your subscriptions for you. However, these apps often charge a fee.
It can be difficult to let go of a subscription if it is tied to your self-image, like a fitness subscription, says Bobbi Rebell (host of Money Tips for Financial Grownups).
You want to be the one who uses them so that you don't have to cancel them. She says it is an admission of failure. She suggests that you cancel subscriptions that have not been used within the last month and then add them sparingly.
Sign up for free trials but be careful
Baggerly suggests setting a high standard when signing up for a trial. Also, make sure you put a reminder on your calendar before the auto-renew date to allow for cancellation. Annual subscriptions can be difficult to cancel because the renewal date is far in the future.
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Baggerly signed up to a geocaching application that her family only used a few times. She then forgot to cancel and was surprised to find out the renewal fee a year later. She suggests calling to request a refund if you miss the cutoff. Many companies will offer this service.
Ira Rheingold is the executive director of National Association of Consumer Advocates. She says that companies are becoming more sophisticated in marketing subscriptions. Many use what's known as a negative option. This means the consumer will be charged an ongoing fee unless they opt out. Many consumers may not be aware that they have signed up for a subscription. He says that if you have a credit card you can request the assistance of your card issuer to dispute a charge.
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Pekkanen says that while she did cancel her subscription to an educational program, she has learned her lesson and is now wary about free trials.
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Kimberly Palmer writes about NerdWallet. Email: kpalmer@nerdwallet.com. Twitter: @kimberlypalmer
