‘It’s a slippery slope’: Most consumers underestimate monthly subscription costs by at least $100, research says

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The amount of money you drop on subscriptions may be more than you realize, recent research suggests.

According to a study commissioned by market research firm C+R Research, more than half of consumers (54%) underestimate how much they spend on subscriptions each month by at least $100. For 24%, the difference was $200 or more.

On average, consumers spend $133 a month — about $1,600 a year — more than estimated, the survey found.

“It’s a slippery slope with subscriptions because it just happens automatically and you don’t actively make that purchase every month,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.

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With the explosion of subscription services over the past decade, keeping up with them can be a challenge. For media and entertainment offerings alone, the average number of paid subscriptions per consumer in 2020, according to Statista, was 12. Millennials had the most: 17.

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Since subscriptions are often charged automatically from a debit or credit card, it is easier for users not to notice the charges. Most people (86%) have at least some of their autopay subscriptions, the survey found.

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Meanwhile, 42% said they forgot they still had to pay for a subscription they no longer use.

Lost track? There’s an app for that

“It’s the rare person who doesn’t have at least one sneaky charge they forgot,” said Kathryn Hauer, a CFP at Wilson David Investment Advisors in Aiken, South Carolina.

For anyone looking to get a better handle on how much they spend and what, it’s worth considering an app like Truebill or TBEN that lets you track your subscriptions. Many banks or credit card companies also allow you to view your recurring charges all in one place through your account.

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Keeping a closer eye on your subscriptions will also help you budget better so you don’t overspend.

“It really comes down to organization,” Boneparth said.

“The more organized you are around cash flow, the more you can identify what you do or don’t want to spend your money on,” he said.

The survey for the study was conducted among 1,000 consumers in late April and early May.