Subscription Costs
Posted by Gail | Filed under Bad Habits!, Gail Club News, Money Management
Everyone knows that if there’s a magazine you love to buy, it makes more sense to get a subscription than to pay the one-of cost every time you hit the check-out. You can save, on average, about 33% by going with a subscription. That’s three issues in ten for “free” when you subscribe. But here’s my big question: Do you read every issue?
I’ve been buying Scientific American Mind, and a couple of other science mags, for a couple of years now. But I don’t buy every issue… just the ones I actually want to read. And I find I’m breaking even or better. How many people get subscriptions to magazines, and renew automatically, just because they always have? The magazines pile up and every time you look at the stack you feel guilty for not getting to them.
The same idea applies to the cable packages you subscribe to. Because of my move, I’ve rejigged my satellite TV package to be more in keeping with what I watch (as opposed to what my ex and his mother used to watch.) But I’m also putting a date in my calendar… April 1… at which point I’m going to reassess how much benefit I got for the money I spent. It’ll go something like this:
If I spend $70 a month on my satellite service, and I end up watching 28 hours of TV, it will have cost me $2.50 an hour. (I also listen to my favorite radio station — all 70’s all the time — via my satellite, so I’ll have to calculate that in too.) If the kids also watch 28 hours between them, my cost per hour drops to $1.25. Am I then prepared to spend $1.25 an hour for that entertainment?
Lots of people subscribe to things that don’t give them the pleasure or payback they expected, but they keep on keeping on because the change takes effort. Think of all those Classmates subscriptions that auto-renew to a credit card automatically for $9.99 a year because you can never remember to cancel them until you see the next charge go through. Or the auto-ship face cream. Or the book-of-the-month membership.
Ditto those movie discs that arrive automatically that you never have time to watch, or the satellite radio with a million choices that go un-listened-to, and that gym membership that you just won’t cancel because you know you SHOULD being going… and you will… one day. In the mean time you keep paying as if no other gym would ever have you. Hmmm.
One of the dangers of subscriptions is that the individual monthly bill is extremely affordable. That can lull you into subscribing to lots of services over time, which quickly add up to something Really Significant. If you used to play WoW online and still have your subscription, but never play, maybe it’s time to cancel.
There are lots of ways to make subscriptions you like less expensive. Negotiate hard. Threaten to switch your service. Buy at a cheaper site… you can get magazine subscriptions at a discount at some sites. And buy in bulk.
I have a subscription to Audible.com, which is where I get the books I listen to on my Ip-Od when I’m driving all over Hell’s Half-acre for work. Because I buy a two-year subscription at once, I end up paying just $10 per book download… and since I listen to unabridged looooong books, I know I’m getting my money’s worth. That ten bucks can buy me 20 hours of listening pleasure – that’s 50¢ an hour. Worth every penny.
CASE STUDY:
I know how y’all love a good case study so here’s one to sink your teeth into:
Trish is a newly separated single mother with three small kids. She wants to be able to save some money for herself and the kids but never seem to have anything left after all the bills are paid. Her net income is currently $4000.00 a month and she pays:
- Mortgage: 500/every 2 weeks
- RRSP/RESP: 250.00/month
- Taxes: 187.00/month (she’s responsible for the taxes on her child-support payments),
- House, life & auto insurance: 650.00/month.
- Trish owes $4200.00 on a credit card and $5000.00 on a PLC.
She and the kids currently live in a very small community where housing is cheap but are moving back to The Very Expensive Big City at the end of June and she wants to be able to buy a house. While she won’t be getting as much from her ex, Trish plans to go back to work after the move.
What advice do you have for Trish?
GAIL CLUB NEWS: The Gail Club boards are getting lots of play. I’m glad you’re able to connect, share ideas, and use each other’s expertise. You might want to pop in and have a look at what people are talking about to see if there’s anything useful for your club. Keep in mind that when you’re first starting up a group you may have to recruit from among friends and family to get some momentum going… tell everyone what you’re doing and start spreading the word that Financially Smart is the new Black! With all the crap in the news about the economy, those of you who are getting your stuff together are on the leading edge of The New Reality.
March 20, 2009 at 9:24 am
I have been guilty of the magazine subscription overdo. When it’s part of the school fundraisers, it’s hard not to take advantage of the ’savings’, or want your child to sell so many to get their rewards. I found though, that I was getting magazines that seemed nice but I never read. Or when I read them, it really wasn’t ‘me’. They’d be fine in a dr office when I was waiting, but not enough to pay for each issue. I’ve weeded it down to one subscription for me and one for a friend as their Christmas gift. If the money saved didn’t get me on board, the amount of trees being used for 30 min of reading, certainly did.
March 20, 2009 at 9:38 am
If you love magazines but don’t love the cost, check out your local library. Chances are they have a wide range of titles available. You can check out as many as you like, current and/or back issues, for free.
You might consider donating a subscription to the library, too. That way you get the magazine, but you also share it with your community, don’t have to store it, and never have to feel guilty about not reading an issue again!
March 20, 2009 at 9:40 am
Wow, Trish’s insurance expenses seem really high. Is that a typo?
March 20, 2009 at 9:55 am
Serendipity never ceases to amaze me-my favourite magazine is Scientific American Mind, and I’ve been trying to figure out if I should subscribe or not… Luckily, due to my work, I can order my subscriptions from a “waiting room” service where subscriptions are waaaaay cheaper (so long as I let my clients read them too while they’re waiting to see me-which is fine with me, because it means that I’m not just killing the trees for my own reading pleasure, as Jolie wisely points out), , so I might just go fot it, but it never hurts to give it some concerted thought before just spending money. Thanks for the reminder!
March 20, 2009 at 10:21 am
I used to have a subscription to Canadian Living, but I found that I didn’t really enjoy it. Now I get Chatelaine magazine, and I pay nothing for it. I receive AirMiles on my house/car insurance premiums, and that generates enough to cover the subscription. And yes, I do read it from cover-to-cover. I also pass it on to my neighbour… yet another money-saving way to share.
March 20, 2009 at 10:36 am
I love the parenting magazines and the National Geographic.
I got a year’s worth of parenting magazines and I was reading them alright, but then I cancelled it, and now I just re-read it. I’m blessed with a short memory so it’s like I’m reading them for the first time again.
As for national geographic, I love it, but they’re like 35cents in used book stores and those ones from 1960’s are even more interesting. The world had more animal species then
These days, the blogs are the best reading material .
March 20, 2009 at 11:18 am
Advice for ‘Trish’ on the case study…
Consolidate the CC and the PLC on a larger 10K PLC… and drop the limit on the CC to 1K. And leave it at that. And don’t use it.
And definitely look into the insurance costs! They are way too high. Shop around… maybe raise deductibles… adjust coverage… live closer to work ( you’d be surprised how much your commuting distance affects your premiums )…
$650/month is quite excessive. I have 250K life on both myself and my husband ( and he is a smoker ), we have very good coverage on our house and car ( we live close to work ), and our insurance costs are only $240/month.
When it comes time to move, don’t hesitate to buy smaller than you think you need. Many of us were raised in homes that were a lot smaller than they are today. Extra unnecessary square footage is just an excuse to buy more stuff to fill it with. ( I am chuckling to myself thinking about George Carlin’s comedy bit about ‘Stuff’ ). And look into an area where amenities are close by. It will help save time and money.
March 20, 2009 at 11:23 am
Great post, Gail! I think that being financially responsible is all about taking a look at those unquestioned costs that we just “assume” we need. Cutting back on TV/Internet, is surprisingly easy. I find that downloading shows is a very economical way to go. Sure, it takes some advance planning, but I pay a low fee each month and then only watch the shows I want – commercial free, of course. I wouldn’t do it any other way.
About the magazine subscriptions. Good point that if you only buy a few, it can be cheaper than subscribing. I subscribe to one magazine but never pay the regular price – I only renew during a special offer period with a reduced price – the maximum I will pay is $20 for a year. Then I make full use out of each magazine by cutting out the recipes and even cutting apart the pages to use as crafts.
I agree, ioana, blogs are great reading material, and so is the public library!
March 20, 2009 at 11:34 am
Btw, I have just posted the details for the potluck in the park! Info is on the forum!
March 20, 2009 at 12:26 pm
re: Trish
First, a single mother of three deserves some applause for not having too much debt to begin with.
Aside from closely examining her insurance I don’t know that she can do much more than possibly try to get more income if at all possible. Keep in mind that she has some hefty needs for life insurance if that’s the bulk of her cost, with three kids and no mention of the dad’s willingness/ability to take care of the kids and a modest mortgage which probably means modest home in sense of $$$. I would suggest killing her RESP payments at least until her debt is taken care of, but only if she’s disciplined enough to actually do so and not take advantage of the increased credit available.
March 20, 2009 at 12:35 pm
“Your Ex and his Mother!” Bless your heart Gail
March 20, 2009 at 12:51 pm
Case Study Trish
My first comment is that if Trish is newly separated I think she needs a better lawyer and to educate herself about divorce before the final decisions are made. She should read Gail’s stuff under Splitsville.
While reading this case study a lot of questions popped into my head.
First of all why is Trish moving? Will she be homeless? Is the house being sold as part of the separation agreement? Is it impossible to find other housing where she lives? $500 bi-weekly is not an unreasonable mortgage. Whether or not her total housing costs fall into the 35% housing cost recommendation depends on her heat, hydro, water and property tax expenses.
Even if the move is to be closer to family she is definitely not financially prepared to do so.
Trish plans to work but is not actually moving to a job so she may end up in a more expensive place with less purchasing power and less income. This is a very financially stressful time all over the world and unemployment is high with lots of competition out there. Is she unable to find any work at all right now in her community? Is she planning to work full time in the city and will that bring in enough to meet her new expenses as well as daycare for 3 kids? Why won’t she be getting as much from her ex? Does it have something to do with taking the children away from his immediate circle? And why is she responsible for the taxes on the child support? None of my friends who receive are responsible and those who pay never stop mentioning the fact.
Trish has a debt load that is already very high for her income and responsibilities. She has long term savings in place but how much of an emergency fund does she have? And why is her insurance so high? Car accidents perhaps?
I am hoping that Trish is not the victim of spousal abuse and/or harassment so is not being forced to move to get some distance between her and her ex. If she is then my opinion would be different. Right now my opinion/advice is that I think that Trish should stay where she is for at least a couple of years. Maybe more. Right now she has an income which will keep a roof over her head and her kids fed. If her husband is located in the same community and isn’t a complete dead beat Dad she still has a parenting partner.
Trish is having troubles now so if the child support is reduced things will not be any easier. She should re-do her budget using Gail’s interactive budget sheet because obviously she is spending more than she is bringing in. I base this on the amount of credit debt. Even if it is carried over from her marriage and she is now a complete tightwad the debt is still hers. Unless she can have it shifted during the final divorce proceedings. I am not sure in which categories she is overspending but I am presuming in the life and other stuff categories.
During the years while she is staying put she should try to get a part time job or work from home to bring in some extra money. Perhaps even consider house sharing with another single Mom. With this money plus savings from redoing her budget and stopping to spend Trish should pay off her debts and start an emergency fund and a moving fund. Perhaps she could use these waiting years to improve her education or job skills and by then her kids will be older and perhaps the world will be in a better financial state.
When she has no debts and money in the bank she will be in a much stronger position to survive such a radical and risky change. And it is risky especially for her little kids. Whatever she does I think that she has a few very hard years ahead of her but if she wants that better and different life she will just have to Mommy-up for now.
March 20, 2009 at 2:32 pm
I wish we could choose our channels. I watch lots of Discovery, Slice, W, and HGTV…. some others only occassionally and most of them not at all! But to get those favourites I am forced to subscribe to a certain tier. It seems crooked to me, especially since all those favourites have LOTS of commercials to go along with it.
On to the magazine subscriptions… I have friends that subscribe and/or regularly buy the magazines I like. So I wait until they have read them and then borrow them after! Subscription sharing is a plan too. There is the public library too.
About the case study…. Why is she moving?
Maybe she could consolidate the debt onto the mortgage before listing her home so she can start with a clean slate? She needs to look at all the insurance costs, is her husband still covered on the life? Is her car over-insured? Can she raise the deductables as high as they can go so that the monthly rates are lower on home and car?
That is all I can think of that is obvious, I am sure there is more.
March 20, 2009 at 2:46 pm
Re: the Case Study
I guess Cost of Living from Province to Province is quite different. When I was newly seperated, I raised two teenage boys on $8,129 A YEAR!!! I can’t imagine not being able to survive on $4K a month. Even now, with one teenager, I net on average $2k a month, and while I am much better off, I am still struggling. Number 1, with three kids, why on earth is she paying taxes on child support?? She should be able to claim those children on her income tax – one as an ‘equivalent to married’, and the others as dependants, and pay no taxes at all. Her insurance is definitely too high, unless that is a typo and should read $650/year. She should think long and hard about moving/returning to work. Daycare costs will eat up most of her take home pay, not to mention the additional costs of take out, wardrobe updates, etc. that will be incurred. She should take this time to get her feet back on the ground, be with her children and regroup from the seperation. She should NOT use shopping as therapy to get through this trying time.
March 20, 2009 at 2:55 pm
Gail, please clarify:
“Her net income is currently $4000.00 a month ” and “While she won’t be getting as much from her ex, Trish plans to go back to work after the move.”
Is the ex paying $4000/mo and she currently unemployed?
March 20, 2009 at 3:36 pm
Pol* – you can watch full episodes of shows on HGTV, Slice, and Discovery online for free! Otherwise I wouldn’t survive not having cable because i couldn’t watch TDDUP! I just hook my laptop up to the computer and watch the shows on TV. Watching them online means they are uninterrupted by commercials, you can watch as many of the shows as you want, and you can rewind at anytime. If you have an internet connection, it’s entirely FREE TV.
March 20, 2009 at 4:34 pm
I don’t set up anything to auto-debit from my account so to renew anything, they always have to send me a bill. At which point it’s very easy to reanalyze cost/benefits. I only have one magazine subscription which is quarterly. I found myself frequently coveting knitting patterns from a certain magazine, so I subscribed. I’m just about to renew for the next two years. Since I’ve liked at least one pattern in each magazine and the cost of each is less than the typical price of a single knitting pattern, it seems a good deal, especially when you add in the articles.
March 20, 2009 at 6:02 pm
Funny subscriptions should be your topic today. I was sitting down to a parenting magazine this morning thinking how I really don’t need so many magazines. I have stopped renewing them. No more parenting mags. I likely won’t renew my current ones expect maybe Clean Eating Magazine and Chatelaine. I find I actually have spent more on magazines by subsribing than I would have otherwise because I’m too cheap to pay newstand price.
I wish we could simply pay for the channels we want with our cable provider rather than these silly packages. I could go without the cable, but I don’t think DH would be happy with that decision. If we have to cust costs in the future, it will be the 1st to go!
My local library now offers downloadable audio books. They are not currently formatted for IPods, but they can be downloaded to MP3s.
I like to download free podcasts from Itunes. I really enjoy some of the programs available from NPR & CBC. It makes the bus ride to work much more amuzing.
March 20, 2009 at 6:32 pm
I had 2 subscriptions each 2 years: Chatelaine and Money Sense. My Chatelaine 2 yr subscription ended with this month’s issue. Money Sense ends next year. When I am working on don’t take the time to read them. However, when I travel, I take them with me. When you spend an hour or so at the airport before your departure, and you flight time, you can get in a lot of reading. The stories might older, but I’m not necessarily reading them to get that hot tip. Finding useful information that can be used at some point in the future is always good. I’m sure I wll be taking several on my next trip.
Ah satelite, don’t have that, have cable, but not digital, won’t be switching that till they force it on me. There is no financial incentive for me to switch, digital costs more here. We have a little over the basic, but don’t have the movie channels or anything like that. I did notice that the cable company here (only 1) is finally offering new subscribers 2 months free. We’ve had cable since it arrived in this city in 1978. I wonder what kind of response I would get if I told them I was thinking of cancelling my cable to cutdown on costs. I might just try that next week and see what kind of offer they give me. Wish me luck,
Our library has free dvds you can borrow. they have some type of audio book, but it comes with it’s own mp3 player. Kind of neat. Would be nice if we could download audio books from our library.
March 20, 2009 at 8:03 pm
I used to have about 3 magazine subscriptions, before kids – and read them all! After kids, I got parenting magazines, but didn’t read them thoroughly (no time!) Now, I receive one subscription to an outdoors magazine which comes with my membership to an outdoors group. Any other magazines I read are given to me from my mother-in-law after she is finished with them, or from the library. You can also get recent magazines from used book stores which sell them for half price or less. You just have to check back regularly. My husband’s work also has a magazine and book exchange. If you want to read anything, take a copy, and leave a copy behind. Lots of different genres to choose from!
About a year ago, we stopped our satellite TV service, and only have CTV, CBC and TVO now – for free. I won’t get anything else until forced to in 2011. For any shows I want to watch, I watch them via internet – Discovery Channel, HGTV, Slice, Global – they are all available free for full episodes. Even CTV or CBC have full episodes of certain shows if I miss them. The kids watch the kids shows on TVO or CBC, and if they want something different, we borrow movies from the library, or rent shows from Blockbuster – for a week at a time.
I have found many great ways to entertain ourselves with less money. You just have to look!
March 20, 2009 at 10:22 pm
I had some good laughs reading this post, Gail : ).
March 21, 2009 at 9:45 am
Someone mentioned why is she responsible for taxes on her child support. At some point, not sure which tax year, the government made changes to the child support payments. Now, a parent/guardian receiving support payments has to report this money as income and it is taxable. Previous to this “year”, it was not taxable. This according to the CRA website is only if your agreement is written or court ordered: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/128/menu-eng.html. Otherwise, not income, non-taxable.
As for the insurance. Ouch, seems awfully high. She might want to look around for a combine package at a lower rate. Her home insurance might be impacted by her distance from a firehall or hydrant as well. Her car insurance, the type of car, her age, and possible accidents or tickets.
Not sure why she’s moving to the big city, unless there is a better paying job that doesn’t increase her expenses as well: Housing costs. If the increase in her salary is reduced by the increase in expenses, then the move might not be worth it. Atleast not for the time.
I hope it all works out in the end.
Hope whatever she chooses to do works out.
March 21, 2009 at 11:49 pm
Case Study:
It is a big step to go out on ones’ own with children but with a positive attitude and a willingness to learn and change, it is achievable and empowering. Trish needs to carefully weigh the consequences of any action she is going to take before moving. Set up a financial/action/emotional plan – compare budgets for country living/city living (including moving costs). What is the best plan, what should the timeline be for action and how to handle or anticipate the emotional toll on her and her children. I would recommend:
Review the mortgage. If she is to remain in the house where she is currently livng, then I would ask the mortgager to return back to a monthly payment schedule and perhaps extend the amortization so her monthly fee is lower. If Trish is moving to the city, she needs to do some research: try to get a job before she moves, look at geared to income housing; find a location close to a school and shopping centres ; look for supportive services, visit the city and contact them. There are often Welcome Wagons where people contact people moving to the city and they can be a great resource, a child-centred play centre (who can provide a lot of information on day care and government resources).
Review the RRSP/RESP. From a financial view point should additional RRSP payments be made or put on hold until the new budget is stable. Is there a way to maintain RESP’s perhaps at a lower amount or would someone else be willing to make the payments until a stable income is in place. It is amazing what grandparents may want to do for their grandchildren. At any rate, the government will continue to put a certain amount into her children’s RESP’s. While it is wonderful to do such things as pay extra on mortgages, put money into RESP’s and RRSP’s, it may not be possible to do right at this time. It is important to set up wills, powers of attorney and guardianship for the children in the event something happens to one or both parents.
Review the insurance and as others have said raise the deductibles. House insurance and auto insurance has never cost me over $150 so it may be that the life insurance is very high and maybe it could be converted to term insurance.
If Trish is moving to the city, she needs to do some research: try to get a job before she moves, look at geared to income housing or housing co-ops close to schools, shopping centres, athletic centres; look for supportive services, visit the city, visit City Hall, contact Welcome Wagons (volunteers who provide information and promotional incentives) children resource centres; women’s centres (they can provide a lot of information on day care and other resources).
Can Trish afford a house at this time? Would she consider paying off her debt and start saving. By the time she is ready to buy a house, she will know the city and be better able to choose where she would like to live. The cost of buying a house and maintaining a house, holding down a job, and caring for her children is a pretty heavy burden for one person and it is important to talk with her family and friends and other knowledgeable people in her life (banks, clergy) until she sees the way she wants to go forward. I think I am practical; others may think what I propose is scary but with careful planning it can be a rewarding experience. A well-researched plan with a timeline can save many hardships. Collect your family and friends around you; make new ones and move forward with those who have a high regard for you and what you are doing.
March 22, 2009 at 11:54 am
Magazines have a huge markup and the prices vary greatly! Compare prices! magazinepricecomparison.com and magazines direct both show you multiple sellers prices and their coupons.
March 24, 2009 at 12:33 pm
While I feel libraries are an under-used source of free materials, I am not actually a fan of their magazine collection. My library has a 3-week borrowing period, so newer issues are often not around, and when I do take one out usually pages are ripped out. Most infuriating!
Magazines Canada has a section at:
http://magazinescanada.ca/consumer/
listing subscription prices that often work out to around $1-$2/issue. They even had a buy-2-get-3 offer a couple of months ago. Sharing a subscription, as other people have mentioned, is a great idea.
Hmm, does the mum-of-3 need to sell her house? If she is set on moving maybe she can rent it out…
March 23, 2011 at 2:06 pm
According to my exploration, thousands of people on our planet receive the loans at good banks. Thence, there is great possibilities to find a collateral loan in any country.