$366.83. Per month. Really? I added up the cost of every digital service my household subscribes to, and that’s the monthly total. It seems like a lot!
Why put my digital finances under the microscope? I wanted to gauge my digital spending to determine if I was comfortable with spending more. Recently I've felt motivated to pay for higher-quality news. The growing trend of media becoming smaller, bite-sized, and "snackable" is producing content of questionable quality. Reading a bunch of click-bait news is both easy and tempting, like eating junk food, while slogging through a full book is more like eating your vegetables. At least that's how I've heard it described.
Despite my enthusiasm for books, I don't always have time for focused reading. Sometimes I only have five or ten minutes, and I'd like using that time to keep up with what's happening in my industry, and the world at large. So I started paying for news from a few sources I trust to deliver insightful and interesting analysis. These purchases felt difficult to justify. I've been reading free news on the internet for two decades. Why start paying now?
Another trend affecting my spending is companies like Netflix and Spotify offering streaming services with monthly contracts attached. Individually these products seem cheap. I wondered, though, how much was I spending when I added them all up? How much more news, music, and streaming shows can I afford?
As a disclaimer, I want to acknowledge that I am very privileged to be able to afford these non-essential services. At best they're educational, but are often they're just frivolous entertainment. When I was in my twenties and on a shoestring budget, I remember agonizing over the decision to sign up for a $40-a-month cell phone contract. That represented a significant chunk of my monthly discretionary spending. These days a $4 coffee or $10 news subscription doesn't seem like a lot on its own, but they add up.
So, here's how my $366.83 breaks down, in pie chart form:
What’s included? Let’s go through what’s in each category, starting with the biggest slice of the pie.
Digital Access - $236.68 (64%)
Without internet connectivity, I can’t access any of these services, so I’m including them. Interestingly, these access charges dwarf all other costs, and add up to almost $3000 a year!
Verizon ($196.68) - I know, right? This cost may not be “fair”, as it’s a family plan covering voice and internet for three smartphones (myself, wife, and mother-in-law). That’s $65.56 per iPhone. Given how much time I spend using the internet on my iPhone, it’s arguably the most important.
Home Internet ($40) - I use Fibersphere, the internet service provider came with our apartment. They only offered me one speed option: 100 Mbps. Seems like a great deal for only $40!
Infotainment: News - $39.98 (11%)
I didn’t expect this to be the biggest “content” category. Apparently, I like news.
New York Times - Digital Subscription ($15) - The New York Times is my trusted source for global news. I appreciate their investigative journalism. Their basic digital plan gives me and my wife access to NYTimes.com and their apps.
Stratechery ($10) - This is the first digital newsletter I’ve paid for. I discovered Ben Thompson’s work through his Exponent podcast, where he discusses strategy in the tech sector with co-host James Allworth. He previously worked for Apple and Microsoft, and delivers insightful analysis about the business models driving the industry. After I became hooked on his podcast and blog Stratechery, I wanted more, so I subscribed to his 4-times-a-week newsletter. It’s now one of my favorite news sources.
Nuzzel ($9.99) - Nuzzel is my favorite app, hands down. It helps me sift through all the noise on Twitter by surfacing the links that are “most shared” each day by people I follow. It’s a simple feature, one that Twitter should implement, and it’s incredibly useful. Their app is free, but I pay for “Nuzzel Pro”, which offers the ability to filter out news (e.g. “Trump”). The filter isn’t worth $10. I just want to give them money so they stay in business.
Medium ($4.99) - I love reading and writing on Medium. It’s a beautiful product that enables anyone to publish news. This is another news source that is free, but I pay for membership anyway. I don’t find their member-only content worth $5, but I don’t want Medium to go out of business, because their free content is definitely worth more than $5.
Entertainment: Shows and Movies - $35.97 (10%)
Binge watching shows during rainy Portland winters is a therapeutic stress relief activity. It’s also a guilty pleasure preventing me from reading and writing more. Importantly, it’s cheap.
HBO Now ($14.99) - I typically sign up for certain shows like Westworld or Game of Thrones. That reminds me, GoT season 7 is over. I need to cancel this subscription!
Amazon Prime ($10.99) - Prime includes free 2-day shipping from Amazon bundled with a movie and show selection where I occasionally find something good to watch. Unusual combo, but I like it. Thanks, Bezos.
Netflix ($9.99) - Their content selection is pretty slim, but a few times a year they’ll have a binge-worthy show like Stranger Things or House of Cards. Also, nature documentaries. My cat enjoys those as much as we do.
I didn’t include movie rentals in this category. We typically rent one a week from Amazon for about $5, depending on how busy our weekend is.
"Productivity Services” - $24.22 (7%)
This category is a catch-all for a few cloud-based services I use.
Dropbox ($8.25) - I use Dropbox for our family’s laptop backup strategy. It keeps our files sync-ed and accessible via our laptops and their mobile app. It’s only $99 a year for 1TB of storage, which seems like a great deal. If our laptops are stolen or destroyed, our files are safe up in the cloud.
iCloud ($1.98) - My wife and I both have the $0.99 monthly iCloud plans, which buys us 50GB of storage each. That’s enough to store cloud backups for our phones, which is the reason we pay for it. This is also a great deal for the piece of mind knowing that I could drop my phone in a lake and my photos would be safe.
Squarespace ($10) - For professional purposes, I feel obligated to have a personal blog. I only write one or two posts per year, so I’m not sure it’s a great deal at this price. Squarespace is a great product, though. It’s very easy to use, and their WYSIWYG editor makes it super simple to customize my blog’s appearance.
Evernote ($3.99) - I use Evernote all day long at work to take notes. I like how it’s organized, and that it’s available on all my devices. This is another product I technically don’t need to pay for, but I do anyway out of appreciation. Their “Plus” plan does allow me to sync across all my devices (laptop, iPhone, iPad), while their free version only lets you sync two.
Infotainment: Books - $14.99 (4%)
Audible ($14.99) - I love listening to audiobooks during my commute, which is where I do most of my “reading”. Audible lets you download one new book a month. I typically listen to 10-12 per year, so this plan works out great. Their iPhone app is excellent and overall I’m very pleased. The value I receive from listening to books from anywhere is much greater than the $15 cost.
Entertainment: Music - $14.99 (4%)
Apple Music ($14.99) - Apple got me hooked with their 3-month free trial. I started discovering new music again after many years of listening to the same old songs. We have the family plan, so we can both listen to music in the car, gym, or on the bus anytime we want. I found interesting music for the gym on Apple’s curated workout playlists. Spotify’s service cost the same amount and I think they have better social sharing features, but I’m too lazy try it, as I’d need to re-create my playlists.
The biggest shocker after running the numbers was the price of mobile. I’m not mad, though. Smartphones are incredibly useful! I also realized that I’m paying $34 for services that I don’t need (HBO after watching GoT) or that don’t require payment to use (Evernote, Medium, Nuzzel). The final surprise for me was that, after access costs, I spend more on “News” than any other category. I would have guessed it’d be “TV and Movies”. Maybe that’s just my dated expectations, as I remember cable bills costing between $100 to $200, back before people cut the cord.
I’m glad I took the time to do this analysis. This list will help me determine where I can cut to save some money.
What do you think? Am I grossly overpaying for digital services? Are there any “must have” services you use that aren’t on my list? I’d love to hear about it! Feel free to criticize me or offer advice in the comments below.