Video for now, not forever
NEW MODEL: Foad Fadaghi ONLINE subscriptions are transforming the way we pay for stuff, delivering potential cost savings but also raising the risk of getting stung financially.
From music, games and video to social media, software and data storage, the popularity of subscription services has boomed. For example, the number of Australian users of subscription video on demand services, such as Netflix and Presto, has surged from 315,000 in December last year to more than two million today, research group Telsyte says.
“It’s a business model that’s being adopted across the spectrum of entertainment,” Telsyte managing director Foad Fadaghi says.
A few dollars a week for an app or service is not expensive but several together can waste a lot of money, so check and cancel subscriptions you don’t use. Apple and Google have online guides showing how to do this.
Fadaghi warns that locking in a longer-term subscription may be unnecessarily expensive if prices are coming down.
“Keep an eye out for new services; look for services that have a free trial period and look at advertising-supported alternatives or even free versions,” he says.
Mike Chalmers, the founder of buying service Buyologists, says subscriptions can offer a cheaper way to get something because you pay less upfront.
But if your interest and usage wanes over time the cost per use effectively climbs, he says.
Chalmers says the biggest trap is not reading the fine print when you first sign up.
“You may be committing to a long minimum term without realising it, and of course once you sign up it’s up to you to remember to unsubscribe if you stop using it, as most models renew your subscription automatically, often without any notification,” says Chalmers .
FinancialAdvisor.com.au principal James Gerrard says: “Five years ago if you wanted to buy a piece of software you would pay $200 and get it. Now you pay $10 a month, forever.”
“It’s really important that people keep track of all the things they subscribe to.”
People with kids can use technology to limit their children’s ability to subscribe, Gerrard adds. NOW is the time to springclean your home loan and save yourself some serious dollars.
As we kiss winter goodbye, there’s a great opportunity for you to cut your mortgage by getting ahead on your repayments.
The Reserve Bank of Australia meets again tomorrow and it’s widely tipped the cash rate will stay on hold at 2 per cent.
But don’t be complacent – a quick scan of your mortgage details could help you significantly cut down your overall costs. Here are five simple tricks to shave down your mortgage at a faster rate.
SPELLING IT OUT: Credit card expert Peter Arnold helps to explain some of the terms that lenders need to know.