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Subscribe Your Life Away!

In two previous articles I outlined what behavioural science had to say about managing money. And behavioural science had a lot to say. There’s very clear do’s and don’ts: do use mental accounts in the physical realm. And don’t use payment methods you don’t feel in control of. Today’s article falls into the realm of the latter, looking at payment methods which might not be doing you too many favours. As the title mentions, let’s look at subscriptions!


If you’ve been on this blog a while, know either me or my research, or are simply very up to date with the behavioural science literature on payments (well done you!) you’ll know that for a payment to be memorable it needs to be salient. It needs to somehow stick in your mind. Ways of doing this are to have to save for the amount required (effort), for the amount to be large (impact), and no those two are not necessarily the same thing, or for the payment itself allows you to stop and think (deliberation). The latter could be you having to count money when using cash, before handing it over. As all of these With newer payment methods such as credit cards, BNPL (AfterPay, Klarna etc.), debit cards, contactless, mobile and direct debits these three criteria have been filed down as much as possible. Don’t have the money yet? Would it require more effort to obtain it? Well that need not be an issue, there’s various forms of credit to make sure you can consume now and worry about the loan later. Because buying on credit is always a loan. Don’t like the amount you have to spend, as in, it’s a bit much? Well, you could pay that in installments, or not repay the amount in one go (against APR for credit). Also, what if I never tell you the total price? What if I only ever mention what something costs per month? A nice, low, amenable number. That doesn’t require deliberation, because I made you sign over your card/account details so it comes out every month, on time. And when it does, I will make sure that you receive your good/service. And every single time it does, it’ll be such a nice surprise. Because you most likely forgot it was coming. And you also forgot you had already paid for it…

Everyone knows what subscriptions are. You have one for your utilities, your phone, your viewing platform of choice. The former two we have fully embraced. The latter depends on the generation but is becoming increasingly more normalized. Fine. Fair. Whatever. If you need Netflix I won’t rain on your parade. Just make sure you actually use the damn thing. Otherwise, cancel it and save yourself some money. And yes, $9 a month is saving. Because it’s $108 for every year you don’t have it. So if you don’t have Netflix for the next 20 years you’ll have saved $2160. That’s good money. What I have noticed recently is that we’ve gone well beyond those initial 3 subscriptions. When I moved to Sydney I quickly realised the popularity of being member of a wine club. Yup, you subscribe to receive a box of several wine bottles a month. They even tell you about the wines they send you, so you can pretend to your friends that you actually know wine like the snob you truly are. Also, everyone I know in this club is under 30, and I cannot relate to these life choices… It's not just wine. The food service Hello Fresh (and equivalents) is also massively popular, although predominantly in the states. This service asks you for your dietary requirements and the number of mouths to feed and off it goes. You pledge your money and they pledge that they’ll keep you fed with the lowest amount of effort required on your part: the food gets delivered to your house, with a meal plan (what to eat when), how to cook it and often partially prepped for more convenience. Another British friend of mine has recently signed up to a clothing subscription as well. Oh yes, they exist too. You select a couple of styles you like (from celebrity pictures) and they will send you a monthly box with their picks for you. And I’ve got a Dutch friend with a subscription to beautybox. Which delivers a box with make-up and beauty/health products every month filled with sample sizes of products. Now I know online shopping is popular, but this just goes a bit too far for me. Looking at these examples (and I’m sure there’s many more, I just only care about fashion and food) I’m wondering when and why we’ve become so comfortable with letting someone else decide what we eat, what we drink and what we wear. And I’m wondering when and why we’ve become so complacent. So lazy.

To tie it all back together with a nice home-delivered bow: we’ve got a low (cognitive) effort payment method. It could not be easier. It’s barely bloody noticeable. It comes out every month, “by itself”. At the same time, we’ve got something we claim to want, as decided by someone else, delivered to our doorstep. Saying yes to this thing we already have is so much easier than having to say “no”. To return it, to learn it ourselves, to figure out what we actually like, or to simply google what different wines are. It’s easy to see that once you’re in the subscription you’re not exactly likely to get out. Maybe we should be wary of that. Subscriptions can be a good thing for the consumer. If you wanted to be on a ketogenic diet but had no idea where to start, well a food service that offers keto food + recipes can be a good way to start. But eventually it would be better for you to graduate onto Google and start looking up your own recipes, and putting some effort in, if being on keto means that much to you. This increasing reliance on “someone else” to figure it out for you might not really be the best thing for you in the long run.


And keep in mind, for every decade you’re not subscribed you’ll be saving hundreds if not thousands of dollars!


Behavioural Science

Personal Finance



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