Each week, we answer money questions from around the web on the NerdWallet app. Here are three of the trending questions from June.
Should I pay for my new subscription monthly or annually?
So you’re signing up for a new streaming service and are faced with the all-important question: Should you choose a monthly plan or an annual plan?
The decision starts with the numbers. What’s the monthly price? And how much is the discount for paying annually?
From a consumer perspective, whether that discount is worth the commitment can be a little more complicated.
Ask yourself a few questions.
First, do you want to continue paying for the service over that longer period? If you know that you will, then it’s easier to take advantage of the discount without worrying you’ll be paying for something you no longer need.
How likely is it that your circumstances will change over the next 12 months? Could you be moving, undergoing a household change, or facing unexpected new expenses? If so, you might not want the extra commitment of the yearlong subscription.
The monthly charge can serve as a regular reminder to consider canceling the service. When you only pay once a year, you might not even remember that you’re enrolled.
Given all of that nuance that goes along with the monthly versus annual subscription decision, it can be a solid choice to stick with the monthly payment — even if it’s a little higher — to maintain your flexibility.
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Should I brick my phone to save money?
Phones can be a source of mindless scrolling (and spending). Ever get sucked into social media ads? Or store your credit card information in a retailer app? Yeah, us too.
But bricking your phone — using a device to render it unusable for a period of time — can make it more difficult to fall into these spending traps.
The technique worked for her. She cut her personal spending by $300 compared with the previous month. She’s putting that money toward a family trip, savings and a home project.
Here are some reasons to try this method yourself:
Bricking adds “friction” to your purchases. Adding friction, or obstacles on the path to spending gives you more time to consider if you really want to make the purchase. If it’s easy to click and buy, then you can end up buying things you don’t really need.
Spending less can also free up your time. When you’re not spending extra minutes browsing retail apps or perusing ads, you have more time for activities you might enjoy more, like spending time with family or friends.
Should I track my spending?
Tracking your spending can be the key that unlocks better financial choices.
Here’s what happened: Ashford spent less than an hour using a budgeting app to link her bank account and credit card. Then, it analyzed her spending.
She discovered that she was spending more on Amazon and Instacart than she realized. Plus, she was shelling out a lot for subscriptions.
Ashford used that information to renegotiate the price of two subscriptions that had gone up. She also resolved to reduce her Instacart spending.
Here are some more ways to make tracking your spending impactful:
Look for patterns and unusual expenses. When expenses are recurring each month — as subscriptions often are — they can add up quickly. Dig into those recurring expenses and see what you can adjust.
Give yourself a realistic goal. Select a specific category, like online spending, to scale back, and then stick to it.
Check in after a few months. See how your spending patterns have changed and make any needed adjustments.
So should you track your spending? We’d say yes.
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