Recurring monthly costs: Which are worth it? Which are not?

I met some friends at a local restaurant Monday night. While chatting, we found ourselves bopping to the music playing on the radio. For more than hour, great song followed great song: U2, Eurythmics, The Police, Elvis Costello, The Clash, New Order. But the ambient noise made it impossible to know what station we were hearing. “I have to know what this is,” I said at last. “This could be my new favorite radio station.”

I tracked down the manager. He told me we were listening to Fred on 44, a channel on XM Satellite Radio. I'd heard of satellite radio, but didn't know much about it. When I got home, I did some research.

As expected, there's an upfront cost to obtain a receiver that can de-scramble the satellite signal. Unfortunately, that's not the only cost. There's also a subscription fee of around $10/month.

Alas — a subscription fee. They're not deal-breakers for me, but they turn otherwise sure things into financial dilemmas. I don't mind one-time costs, but subscriptions make me wary.

I would love to purchase an iPhone, for example. The initial hardware cost is fine. I can justify that. But I can't justify a $60/month, two-year contract. That's nearly $1500 for a device I don't actually need. I stopped playing World of Warcraft because of the subscription fee. I loved the game, but in order to get my money's worth, I felt like I needed to play more than is healthy.

I view recurring expenses as potential money sinks. Too often I don't get value for what I spend. For three years I carried an $70/month deluxe digital cable package so that I could watch high-definition television. But at most, I was watching an hour or two of television per month! Besides, who needs to see Antiques Roadshow in high-def?

Over the past year, I've cut the number of magazines to which I subscribe, dropped to basic cable, and cancelled my Audible account. These moves have freed over $100/month. Eliminating recurring expenses has made a significant difference to my cash flow. Most of the time, I don't even miss the things I've eliminated!

Of course, we each probably have a few recurring expenses that are easy to justify due to the pleasure or utility they bring us. I'm willing to shell out for The New Yorker because even though I only read about one issue per month, when I do read it, I love it. And if I find the time to listen to audiobooks again, I'll re-subscribe to Audible — it's a good deal when I actually use it.

I can't decide whether paying for satellite radio would be smart or not. I've signed up for the free three-day trial of XM's web service. So far, I like it. I'd probably subscribe:

  • If NPR were available,
  • If there were some sort of device that allowed me to receive XM on my iPod, or
  • If it cost less.

As it stands, am I willing to spend $10/month for XM, and then pay for a receiver? How about $8/month for the streaming web version? I don't know. For now, I'm just going to dig through my iTunes library to create some new playlists. I can probably duplicate the sound of Fred on 44. Maybe that will be enough…

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Mary
Mary
12 years ago

I subscribe to Sirius, but after paying for a year’s subscription, I find I’m not actually listening to it that much. I can get the CBC on the Net or on my radio, many of the other shows I like are available somewhere on the web, and I find that I can get a truly eclectic playlist of indie rock, classics, and obscure goodies via The Hype Machine’s new streaming radio feature. (OK, so they’re playing Kylie Minogue right now. I did say they were eclectic.) I agree that subscriptions are a money sink. I love The Atlantic, but even… Read more »

Alias
Alias
12 years ago

Like you I hate the monthly costs. However, most people I know that have XM love it. So, as a suggestion why don’t you cut $10/month from somewhere else or maybe sell something that you have, but don’t use, to offset the $120/year.

Steve
Steve
12 years ago

I have always thought that the best business ideas had a subscription type setup for less than $25 a month. That seems to be the magic number in which, if you can provide a service valuable enough for people to initially want, you can easily charge them month to month forever. For under $25 people don’t seem to think its a significant enough of an amount to really look into canceling. (Thanks NetFlix) lol.

Gary
Gary
12 years ago

You should really check out Pandora.com – Free streaming internet music – and you get to choose your music.

SJean
SJean
12 years ago

I listen almost exclusively to NPR…. I don’t think I would pay for XM at this point. I’m happy with my ipod for music and the radio for interesting stories.

I do think they have little XM-to-go type receivers which you can carry around as though it were an ipod…. but that would be another cost.

Maybe they offer a trial period, so you could determine if it was worth it to you. Some people do love it.

Felis
Felis
12 years ago

What about Pandora.com? It is internet radio and you can make any station you want. If you just plug in the songs that ‘fred on 44’ played it will take it from there. A little monitoring and you’ll be hearing everything you love and probably some songs you didn’t know your liked. The best part is that it’s free. 🙂

Alain Plante
Alain Plante
12 years ago

“For three years I carried an $70/month deluxe digital cable package so that I could watch high-definition television.” FYI: there is a much cheaper way to get HD television – at least where I live. I found out that you can order the ultra basic cable (not digital) for around $12/month. Then you can add to that the HD package for $5/month. This HD package includes all the local networks (ABC, NBC, CBS, FOX) plus ESPN, ESPN2 and a few bonus HD-only channels like Discovery HD Theater. We don’t watch much TV, so this was the perfect way to get… Read more »

kingking
kingking
12 years ago

Just FYI – Fred is available on Directv’s xm satellite radio offerings with most of their packages. It’s channel 834, I believe. If you’re paying for cable, might want to check this out as an alternative. There are usually deals so that you get free receivers and installation, sometimes a few months free service. Then you could at least listen at home, we do this quite a bit if we want to hear something new or that we don’t have on iPod. The price is competitive with cable in our area (South Florida – and yes, reception is good –… Read more »

My Road to Wealth
My Road to Wealth
12 years ago

Yes, I am very wary of recurring monthly charges too. It feels like buying a printer, it is very cheap, but you end up spending a ton on toners! My ex boss used to say subscriptions are the best business model you can have. Once you have a loyal customer base, they will just keep buying and buying without a second thought and you don’t even need to do much marketing to acquire new customers. As long as the content is good, business will thrive year after year.

Sammy Larbi
Sammy Larbi
12 years ago

JD- you might want to have a look at Pandora: http://www.pandora.com/

Free over the web – you select music and it creates stations for you with music of similar style. Also available with receivers in home starting at $300. I’m under the impression that is the only cost to take it off the computer (also it works with Sprint cell phones).

No NPR, but great for music.

cashgoat
cashgoat
12 years ago

I couldn’t function without my XM! I have it in the car and the portable radio that I can bring it in the house. When at work I use the online stream which is free with a regular subscription. I listen to allot of baseball games during the summer and I enjoy allot of the talk programs not available on regular radio in my area. Now I can’t wait for the SIRIUS merger to complete so I can get the NFL games too. I generally pay a year in advance and it doesn’t seem to be such a money sink… Read more »

J.D.
J.D.
12 years ago

Hm. I forgot about Netflix. That’s an example of a recurring fee I don’t mind paying. (Well, actually that comes out of Kris’ money…) We watch 10-12 DVDs/month with Netflix, and it has really reduced how much I spend on buying new DVDs. This seems like a good deal to me…

Peter
Peter
12 years ago

I, too, am very wary of services/products with recurring monthly charges. I justify cable/internet because I watch a decent amount of tv and it acts as a balance to more expensive things I would otherwise be doing. I’ve begun a large purging and trimming of my monthly expenses in an attempt to get completely debt free and I absolutely hate monthly recurrences I cannot get rid of. I would love an iPhone and would not have a problem paying the out of pocket expense but could not justify the $70+/month for service [even if I were not provided a perfectly… Read more »

Alan Bluehole
Alan Bluehole
12 years ago

I’m in my second year with XM, and we pay the fee annually, which is at reduced cost over the monthly bill. NPR programming is available on XM, but once you listen to CBC, BBC, and other news offerings, you start to realize how — I don’t know what I want to say — crappy NPR has become. You and I are the same age, and I am OBSESSED with FRED. But then there’s Chill (84), which we listen to with dinner every night, Classic Soul (60 I think), which is so great for me because I only know about… Read more »

Justin
Justin
12 years ago

I too dislike monthly costs, but I do my best to put them in relation to other things that I buy. For instance, I used to play World of Warcraft also, along with Final Fantasy XI before that. I justified the payments this way: They provided entertainment, so I compared their costs to other sources of entertainment that I would be using instead. For instance, going to the movies was about $7 (student discount). That means two movies a month was equivalent to the cost of the games, and playing the games meant I wasn’t going to the movies. Of… Read more »

Heather
Heather
12 years ago

Here’s another vote for Pandora! I love creating multiple different stations according to my mood and enjoying them for free.

Joel
Joel
12 years ago

I second the Netflix move (though we use Blockbuster Online). We used to average around $60-$70/month between going out to movies, renting movies, and buying DVDs. Now we’ve replaced that with a $17/month fixed charge where we get whatever movies we want. I’m not a huge fan of monthly recurring charges but this was a case where I could replace a variable cost that was a little out of control with a fixed cost I could control (by changing plans if needed).

pi3832
pi3832
12 years ago

Yo can get HD television for free. Most broadcast TV stations are broadcasting in digital these days. Indeed, come February, 2009, the FCC says that all analog broadcast TV signals will stop.

Many of these digital broadcasts are also HD signals.

To find out what’s available in your area, check out:
http://www.tvfool.com/

You can get good deals on antennas at:
http://www.solidsignal.com/antennas/

Need help deciding on an antenna? See:
http://www.hdtvprimer.com/ANTENNAS/comparing.html

Yes, a good antenna set-up may cost you a pretty penny. But it’s a one time cost. After that, all the TV is free.

Curtis
Curtis
12 years ago

We just started our subscriptions to Netflix and Gamefly after reviewing how much we were spending at the video store each month on movies and games. It was essentially a wash one way or the other, but the added flexibility of the online queues makes it a much better deal. I can’t imagine paying for XM either. I’ve got 50-60 Gb of music I can use on my Zune (which has the FM tuner built in so I still have my NPR). My brother on the other hand, loves his XM, but he hooks it up to his home theatre,… Read more »

Patrick
Patrick
12 years ago

I strongly dislike monthly payments and subscriptions, and try to avoid them if possible. But that is for my situation. If digital radio is something you will use often, then $10-12 a month is not a lot of money. It is an even better deal when you consider you can use the receiver at home, in your car, and on the go (if you have the right hardware). But, is satellite radio better than your current iPod? Basically, you music choice boils down to: – Do you want to carry 2 music gadgets? – If not, do you prefer to… Read more »

Rob
Rob
12 years ago

JD, you might also want to look into HD Radio. It depends upon what radio market you are in, but in my market there are several HD Radio stations that play music feeds that I enjoy greatly and they only insert station IDs rather than commercials.

HD radio requires you purchase the receiver, but after that the content is free, as it comes through on digital broadcast over the FM band.

AnnieJ
AnnieJ
12 years ago

I think you bring up a good point when you consider usage and pleasure as part of your decision whether to subscribe or keep a subscription. For us, cable is not worth the monthly fees, but Netflix is. I know people love their satellite radio, but it isn’t something I’m like to ever subscribe to. There are so many other ways to listen to music for free…regular radio, Pandora, Launchcast, converting CDs we already own to MP3, doing the same with CDs borrowed from the library, etc. In most cases, if I can get it for free, I won’t subscribe… Read more »

Travis
Travis
12 years ago

I’ve been a long-time Netflix subscriber, and found it to be worthwhile if we’ve got the time to watch the movies. The hardest part about getting your money’s worth out of Netflix is watching your queue and making sure that you want to watch the next movies that they’re going to send you. There have been times where I’ve played “Hmm, I’d watch that” with their recommendations because I was bored, only to have the movie come in the mail and then sit on my desk for the month because I was never interested enough in watching it to pop… Read more »

brad
brad
12 years ago

One of the dangers of subscriptions is that the individual monthly bill is affordable, which can lull you into subscribing to lots of services over time. They quickly add up to something Really Significant. It’s the biggest problem I see with the subscription-based model for online services (like 37signals Basecamp, Highrise, Backpack, etc., and Microsoft’s “Live” software). Individually you think, sure this is affordable, but once you start subscribing to several services you end up paying over $100/month for it all. I am very subscription-resistant these days after having this happen to me more than once.

Peter
Peter
12 years ago

I have to agree on this one. Recurring payments bug me when it’s something I’d like to use, but won’t use often enough to justify the cost. However, I have quite a few recurring payments that are worth it – Internet, Family Fun magazine (which we do read and use), sometimes a Newspaper subscription when it saves money on the cover price (for the coupons, mostly). For me, XM wouldn’t be a value – I don’t listen to enough radio/music to justify the monthly expense. I know others who are constantly listening, though, and for them it would be money… Read more »

Courtney
Courtney
12 years ago

monthly subscriptions are the bane of my existence. I’m currently at a stalemate with Comcast over my high speed internet connection. They recently bought out Time Warner or did some sort of trade and now there is no competition in our area. They want you to do a bundle package and if you don’t they keep increasing your rates. It has crept up nearly every month. If I put it on a per hour usage, sort of you did for your cable, then it seems reasonable, but still I hate it. I negotiated my satellite bill so that even with… Read more »

Dave
Dave
12 years ago

Oh, J.D., this post made me laugh. You’re just 3 years older than I am, and what’s happened is we’ve finally become our parents, and we now like “oldies” on the radio like The Clash and New Order, hehe. But I just use YouTube to get my fix of all this stuff. In fact, I spent a good chunk of my day yesterday listening to this “oldie” over and over while I did paperwork here in my office (remember this one?) —

http://www.youtube.com/watch?v=1fNu-_TP9Z8

Manuel
Manuel
12 years ago

I too am not a fan of the recurring fee. I dropped the monthly $65 for basic cable and internet to only $13 for our citywide wireless internet here in Tempe, AZ. My one time cost for TV service has been the purchase of a new 32″ HDTV for $400 and I get great reception from all the stations that broach over the air (OTA) HD signals using a regular TV antenna. For radio, I am still waiting on some of the home players to come down in price or maybe an equivalent to the portable XM and Sirius receivers… Read more »

Sara G.
Sara G.
12 years ago

My 2 cents: I think you can pay for a year of XM or Sirius in advance for less than the monthly subscription rate. I just saw something on Fatwallet.com that said for $77 you can get a year of XM. I don’t know if that promotion is still good. You can also stream commercial-free internet radio to your stereo with a cheap rca cable. You probably know this already. If you want to save on magazines, consider buying subscriptions on ebay. I got Time for $17 a year, a 2-year subscription to Runner’s World for $18 and a 4-year… Read more »

Amber
Amber
12 years ago

We spend, each month, about $92 total for cable, HBO, and DVR packages. However (and I just counted) right now we’re watching roughly 25 hours of programming a week, which is the bulk of our entertainment, which takes our cost of per-hour programming down to under a dollar. This also doesn’t include when we happen to find something we’re interested in watching. During the television “off season” I believe we had managed to find about 10-15 hours of programming that we enjoyed. Instead of “wasting” money at Blockbuster to fill in our time, each week we would hit HBO and… Read more »

pril
pril
12 years ago

I pay for cable and still have to watch commercials. Satellite radio, you’re paying to listen to maybe 5 stations at most, and at least a couple of them have commercials. I thought part of the greatness of satellite radio was no commercials. Since I already own most of the music i love, and i still go and buy quite a bit of it, why bother with paying for radio>?

Sara
Sara
12 years ago

I also stopped my simplyaudiobooks.com subscription and now I get get audiobooks on CD at the library. I can go online and request which books from other libraries in the area I’d like to have sent to my local library and they call me when they’re in. They’ve also started an MP3 system that I haven’t tried out yet. You can check out a small MP3 player that has only the one book loaded into it. Or you can download the book at home and I think it disappears after your time is up. You can also load the downloaded… Read more »

HollyP
HollyP
12 years ago

NPR – download your favorite shows for free through their website, or Itunes

Audio books – check your library. My public library just started offering audiobook downloads good for a month.

Netflix – create your own queque from your local library’s website. I haven’t paid to rent a movie in years.

Dave
Dave
12 years ago

Oh yeah, I forgot to mention that my wife and I get almost all our movies from the library. Our libraries carry everything, and I mean everything, even r-rated horror movies like Hostel and Saw and whatever … I just borrowed INLAND EMPIRE a couple of nights ago. So people might want to check w/ their local libraries … of course it helps that my wife is a librarian and can snag the good stuff as it comes in, but this is a great free way to keep up w/ movies.

Mike
Mike
12 years ago

I don’t think I could justify spending $10 a month to listen to radio. The way I look at it, how many hours a day do you really LISTEN to the radio, I mean sit there and enjoy every song. Most of the time, when the radio (or TV sometimes in my case) is on, it’s just background noise. Yeah, I try to find a station I like, and yeah, if I catch a really great song it puts me in a good mood, but I don’t sit there and pay attention to song after song. So I would take… Read more »

J.D.
J.D.
12 years ago

Dave, I’ve never heard that Misfits song before. It’s funny, though. Yesterday I went to YouTube, too, looking for some songs I hadn’t heard in a while. It was great to hear “Bring on the Dancing Horses Again”, but good grief that video is awful:

http://www.youtube.com/watch?v=GaWs79v0ugE

And oh my goodness. Here is my single favorite song if all time:

http://www.youtube.com/watch?v=sHnXOSxka1Q

U2’s “Bad”, the Live Aid version. I could listen to that all day…

Cameron
Cameron
12 years ago

NPR is available on XM, I think it’s channel 130, but I could be wrong on the exact station. They also have a bunch of other great talk stations (I prefer Air America on 167 myself.)

Baddriver
Baddriver
12 years ago

I’m a Sirius subscriber and love the service. I don’t have a car anymore so I’m selling my receiver but I’m keeping the internet radio account (at least through the end of the subscription). I listen at work over the internet. J.D. I suggest looking on ebay for an sirius internet radio account. I didn’t see any when I looked a few months ago except for the one I sold. Since sirius gives you a free internet account with each physical radio. I had two physical radios but only needed one internet account. It sold on ebay a few months… Read more »

Belinda Richardson
Belinda Richardson
12 years ago

I view recurring expenses as potential money sinks. Too often I don’t get value for what I spend. For three years I carried an $70/month deluxe digital cable package so that I could watch high-definition television. But at most, I was watching an hour or two of television per month! Besides, who needs to see Antiques Roadshow in high-def? Amy Dacyczyn of the Tightwad Gazette said that cable tv was like a barometer. People who were paying a monthly bill for cable and were deep in debt simply didn’t get it. She felt that those people should not only cancel… Read more »

CrimsonDiamond
CrimsonDiamond
12 years ago

Here’s the deal: This goes for folks that don’t have an HD television and are not looking to waste money on those things to increase the amount of payments they fork out for their entertainment budget every month. Go to TVLinks.com. There you get a very large number of shows, documentaries and movies that can be streamlined to your computer for your enjoyment for free. That is how I got rid of an expensive $90 digital cable package. Also, for some of the heavier phone users, think about using VOIP systems like Skype. You can very cheaply, get AN ENTIRE… Read more »

Mike Panic
Mike Panic
12 years ago

I don’t subscribe to radio, but if I did it would not be XM, it would be Sirius – where NPR is available for you, and Stern and a host of other things.

A friend of mine uses Verizon cell service and has Sirius. He has a Motorola Q (not the newest one that just came out) and can actually stream Sirius to his phone, via the web browser. He uses that feature daily when on break at work, and gets every cent out of his monthly fee for Sirus and the data plan for his phone.

dave
dave
12 years ago

I hate recurring costs. Somehow, I need to find a way to heal my internet bills. TV is terrible, so I cancelled that. Next to go is water, power, and heat…those will be tough.

Jenn
Jenn
12 years ago

We have Sirius and we love it. They have a product called the Stiletto that is a portable receiver plus an mp3 player. By using that, you can listen to it at home, in the car, and on the go without having to buy separate receivers or separate subscriptions.

The biggest downside we’ve noticed is that if you’re in the car and you go through a tunnel or under a bridge, you lose signal. It’s not a problem here (no tunnels) but I wouldn’t recommend it for someone who had to go through long tunnels on a daily basis.

whitney
whitney
12 years ago

I have a habit of going through our budget and cutting recurring monthly expenses …all the time. It hurts to spend money on, say, a gym membership when you’re not using it this month. Unfortunately, we’re in a 2-year contract with them, and it’s $350 to cancel early (yipe!), so we’ll be keeping that particular expense until it expires…and using it as much as we can stand. There are two recurring non-essentials that have value for us: -Netflix. Hoo boy. We just finished the entire series of Star Trek: Voyager. I’m all about getting free videos at the library, but… Read more »

jasonn
jasonn
12 years ago

We have XM Satellite radio here and I have to admit it is really cool. I believe to subscription for us was free for a year, but I can’t remember how that came to be. Anyways, I prefer, too, if there were just a one-time fee as opposed to a subscription, but I don’t think they’ll be changing their pricing model anytime soon. It sure has been working.

Carrie
Carrie
12 years ago

I think an iPod playlist that mimics the station is your best course of action here. I like to do all my music listening on my iPod to make sure I’m really getting use out of the music I have purchased for it and getting use out of the iPod itself. If I were you I’d start by making a “smart playlist” that includes all of the artists you listed and add additional artists as you think of them. You already paid for the music either as CDs or digital files so you should use what you have rather than… Read more »

Niek
Niek
12 years ago

For people who spend a good chunk of each work day in their cars, like SF Bay Area commuters, XM radio might be a good choice. I have a coworker who listens to his portable XM reciever (or maybe he’s on Sirius?) at work; he seems pretty happy with it. But there are plenty of internet radio stations around, so the at-work usage seems less valuable. I also like how the satellite radios play channels you won’t find anywhere else. I happen to like both trance and bluegrass music, but those aren’t station types you’ll find in most of the… Read more »

Dave
Dave
12 years ago

Omg, Bring on the Dancing Horses — I haven’t thought of that song in years. But you know, J.D., there’s no objective reality anymore w/ these sorts of songs … the songs we were all exposed to as kids and teenagers, for better or worse, become “our generation’s” songs, and those songs will sound good to us *no matter what.* This means, God help me, I’m stuck loving shit like this —

http://www.youtube.com/watch?v=lRTVi7rH_zs

Wolfrick
Wolfrick
12 years ago

There is a way to may XM Radio work with your iPod, but it’s a bit nerdy: There’s an XM radio device called the XMPCR which connects to your computer via USB and a line-in audio cable. Now, the XMPCR is no longer being sold, but it is supported by XM, so if you buy one on eBay or Craig’s List or whatever, you can call up XM and subscribe, or add the device to your existing subscription for $5/month. The device comes with XM’s software to drive it, but there’s a third-party solution called TimeTrax which allows you to… Read more »

Megan
Megan
12 years ago

If you like XM radio, try the AOL Radio online – they stream some of the XM radio stations for free. A free AOL/AIM screen name is required for some stations, but it may be a good alternative.

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