Australians are collectively spending a staggering $26.5 billion each year on subscription services, according to fresh data released by ING. This equates to an average monthly outlay of $136 per person, or $1,637 annually.
The Rise of Subscription Creep
Matt Bowen, ING's head of consumer and market insights, attributes this trend to what he calls 'subscription creep.' He explains that digital providers make it remarkably easy to sign up for services, often requiring just a few clicks. However, unsubscribing is deliberately made difficult, trapping consumers into ongoing payments.
'Once they've got you in, they hike those prices on an annual or semi-annual basis,' Bowen warns. This 'easy in, hard out' model has become the norm for many subscription-based businesses.
Generational Spending Patterns
ING's data reveals that 1.8 million Australians are spending $250 or more per month on subscriptions. Younger generations, including Gen Z and Millennials, are spending considerably more than older Australians. This highlights a growing financial burden on those who are often early adopters of digital services.
Street interviews with Australians reveal diverse approaches to managing subscriptions. Ilona admitted to spending around $300 per month on streaming services, unsure of the exact amount leaving her account. In contrast, Dean limits himself to just $10 per month for Netflix. Carolina pays for ChatGPT Premium, citing its unlimited document upload feature as worth the extra cost. Troy previously subscribed to Tinder Premium but canceled after meeting his partner Nat; the couple now caps their subscriptions at $35 per month.
Expert Tips to Control Spending
Bowen offers three practical tips to help Australians regain control over their subscription spending:
- Engage with your money: Log into your mobile banking app regularly to review monthly outgoings and cancel any services you no longer use.
- Set reminders to cancel subscriptions: If you sign up for a free trial, immediately add a calendar reminder to cancel it before you're charged.
- Look for bundle offers: Many large organizations, such as telco providers and utilities, include subscription services as part of their packages. This can be a cost-effective way to access multiple services while building customer loyalty.
By staying vigilant and proactive, Australians can avoid the trap of subscription creep and keep their finances on track.
