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One thing that I’ve found beneficial in checking for value is to add up the annual cost of monthly subscriptions. Take Netflix, for example. With tax, we pay $15.12 per month to have two movies out at a time. That doesn’t sound like much at all, but it adds up to $181.44 per year.

If I went out and paid $181.44 for something up front, I would think two or three times before making the decision to buy. I’d think about whether it was worth it to me: Would I actually use the item enough to justify the expense? Is this something that I will enjoy? Is it worth x hours of work to me? Is there something else that I’d rather use the money for? etc.

Now I tend to do this to a certain extent for all purchases, but I suspect that’s kind of unusual. So I think it’s especially important to do for “set it and forget it” type purchases. Is that satellite radio worth it to you? What about your cell phone? Cable TV? etc. Taken by themselves they may not seem like much of an expense, but added up over the year or added together as a group they could make a significant impact.

In our case, we get a lot of enjoyment from Netflix, and it is absolutely worth it to us. In fact that would be one of the last things we’d cut if we needed to make cutbacks. We watch anywhere from 8-15 movies per month, and at $15.12 per month that breaks down to between $1.89 and $1 per movie, which is significantly less than we’d spend elsewhere for the same thing. (And even more of a savings from actually going to the movies, which we used to do once or twice a month.) Plus we don’t have to worry about getting the movies back on time, or making trips to the video store (which I hate doing).

So yes, it is worth it to me. But other things aren’t, and I don’t see the point in paying for them. In fact there are a few things that I wouldn’t want even if they were free. But the point is to take a step back and evaluate your monthly subscriptions periodically. Don’t let your money leak out the door.

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