I had this thought today I’d never thought about before. I have all these subscriptions — NYT, Strava, Dropbox, 1Password, Netflix, etc. some are monthly, some are annual. Annual of course a volume discount (volume in 12 months or however you want to say it). 1/n

I was making a new budget for myself bc of the new house and just you know life generally. And I wanted a fixed monthly budget constraint to reduce uncertainty as much as possible. So I decided “well, I’ll just divide the annual by 12 and make that monthly” 2/n

But I didn’t like that bc it wasn’t the actual constraint. I was sort of like super obsessed with the budget and like color coding on excel and making bold boxes and you just in the zone, and I didn’t like it bc I actually don’t keep track of these annual subscriptions. 3/n

Just one day I get an email and it says “you’ve been charged $149 for whatever annual subscription”. So I decided what I’ll do is shift every one of these to monthly bc even though it’s more expensive, I’m willing to pay $3-5 for that certainty. 4/n

But then I thought about it. Since I don’t keep track of the annual subscriptions and when they draft, it’s like it’s random to my me. It’s obviously not random, but I’m not paying attention and so it always sneaks up on me 5/n

So then I thought “hm. That’s funny. Bc when it happens, I always think oh I wasn’t expecting that but now that’s swiped, well it’s a sunk cost so no use crying over spilled milk” and go back to my life. 6/n

And then I thought, “hm. If it’s monthly, though, that means I incur a known marginal cost every month for this item. Which means, I’ll only continue to subscribe if the marginal benefit of the subscribed service is greater than this known marginal cost.” 7/n

Then it dawned on me — firms aren’t giving me a discount for like some kind of economies of scale deal or whatever. They know that mentally this is how people are, and so even though it’s less money per year, fewer quit subscriptions bc of this random sunk cost thing.” 8/n

So I just through and cut a ton of stuff. I was like “no more Disney plus, no more Strava, no more annual subscription to Dropbox or nyt, no more hbo Max”. I switched everything to monthly, and did so kind of annoyed that I hadn’t thought more about this in this way 9/n

I bet someone in marketing at some point said to their bosses “behavioral economics shows people blah blah something about memory or something, and it’ll reduce cancelations thus increasing revenue even at a lower average price”. 10/n

Which is awesome but I am never doing annual subscriptions again. I might do a monthly subscription to a local massage place, bc I am basically putty when a masseuse breaks all my bones and tells me how “tight” my muscles are but that they are “releasing well”. 11/n

Which sometimes I think maybe they’re making up all that stuff and know that I can’t validate any of that. But I love massages so that actually I might do bc they are pricey. But no more annual digital subscriptions. 12/n