Suze Orman: Cutting Out Unnecessary Subscription Services Can Save $1,000 a Year
Written by
Ashleigh Ray, AI Editor
Edited by
Ashleigh Ray
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Subscription services are everywhere — from streaming platforms and meal kits to pet supplies and software apps. We all love the convenience of subscription services, but are they silently draining your wallet?
According to financial expert Suze Orman, they very well might be. While the convenience is undeniable, this ease often leads to overlooked auto-renewals and forgotten subscriptions. Businesses thrive on this forgetfulness, making it crucial to take control of your subscriptions.
In an article on her website, Orman highlights how cutting out unnecessary subscriptions can lead to significant savings — up to $1,000 a year. Let’s explore how you can reclaim your finances by trimming these costs.
Understanding Auto-Renewal
Auto-renewal is the lifeblood of the subscription economy. Many services automatically renew monthly or annually, often without a clear reminder.
This practice can lead to unintentional spending on services you no longer use or need. Orman explains that these forgotten subscriptions can add up, costing consumers significantly more than they realize.
The Shocking Statistics
Research supports Orman’s claims. According to her, studies have found that consumers’ inattention to auto-renewals boosts retailer revenue by up to 200%.
Orman also references a 2022 survey that revealed people underestimate their total monthly subscription costs by over $130, translating to an annual shortfall of $1,500. This staggering figure doesn’t even account for the subscriptions people know about but don’t use.
Orman’s Challenge: Save $1,000 a Year
Businesses rely on consumers’ inattention — Orman calls it inertia. They profit from your failure to cancel auto-renewals. To combat this, you have to stay vigilant.
Orman believes that by reviewing and cutting down on unnecessary subscriptions, most people can easily save $1,000 a year. She provided the following step-by-step guide to help you achieve this.
Step 1: Create a Master List of Subscriptions
Start by making a comprehensive list of all your subscriptions. This might be tricky since some subscriptions renew annually and can easily slip under the radar. Check your credit card statements and look for annual review summaries that highlight recurring charges. PayPal users can log in to see a list of their active auto-renewals.
Another effective method is to search your email using keywords like “renewal,” “auto-renewal” and “subscription.” This can unearth services you may have forgotten about. And don’t forget to list streaming services.
Step 2: Sort Subscriptions into Must-Haves and No-Longer-Needs
Once you have your list, categorize your subscriptions. The “Must-Haves” are essential, while the “No-Longer-Needs” should be canceled immediately. Stay firm on your decision; businesses will often offer discounted rates to keep you, but if you don’t need the service, any cost is too much.
For the “Must-Haves,” log in to your account and search for more economical options. Consider turning off auto-renewal and negotiating a better deal when the subscription is about to expire. If offered a temporary discount, set a calendar alert to renegotiate or cancel before the higher rate kicks in. Companies are betting on your inertia, so stay proactive.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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