How to manage digital costs draining your bank account

2023-10-10  5 minute read

Leah Drewcock

In today’s digital era, you have the convenience of getting anything you want with the tap of your finger. While the luxury is nice, the costs add up quickly.

Ordering meals to your front door, streaming a movie, or betting on your favorite hockey team can all have a big impact on your bank account. These services make it even easier with one-click purchases using payment information saved in your digital wallet. Often you don’t even have time to think about the cost until they show up on the credit card bill.

Let’s look at four of the biggest digital costs draining your bank account and how you can manage their expenses.

online purchase hands holding credit card

1. Streaming

We have more options than ever for on-demand streaming of video, movies, shows, and music. These days you likely have multiple streaming services and each one comes with its own costs and features — and sometimes additional content that can be purchased in-app.

These services give us the illusion of choice, offering bundles, monthly versus annual subscriptions, and even discounts for using multiple services. Canadians are now spending an average of $157 per month on streaming services and the number is sure to rise.

Tips to manage streaming

Do the math: Look at your monthly credit card and bank statements and add up how much you are paying each month for streaming services. (Wasn’t cutting the cord supposed to cut you some financial slack?)

Start a streaming rotation: For now, most streaming services allow you to cancel and resubscribe whenever you want. Subscribe for a month for the show you like, then get rid of it. Do that for all your services and only ever keep a couple at a time. You don’t need a service for the whole year just to watch one show that takes a half-decade to release a new season.

Wait for the free release: Don’t pay to rent new releases. The waiting period is shorter than it used to be for new releases to become available for free on various streaming platforms.

2. Food delivery

Ordering food delivery might have been the highlight of our day at the height of the pandemic. But things have gone back to normal, and your eating habits probably should too.

Food delivery services have become one of the most extravagant costs of the digital era. Courier costs vary from $2 to $10 per delivery, and that doesn’t even include the tip (which wouldn’t even be required in person at several of the places you order from) or the other service fees these services now tack on.

Think the discounts or monthly subscriptions are worth it? Think about how much you have to spend for a measly five or 10 percent off. Also, many restaurants charge more for the same items on delivery apps to offset the fees they also have to pay to the delivery services. The math is almost certainly in their favour. 

This same logic applies to home delivery for groceries and ready-made meal kits. If you can, it’s always more affordable to make the trip to the local supermarket.

Tips to manage food delivery services

Add it to your food budget: Don’t let food delivery services fall through the cracks of your spending. There’s nothing wrong with the odd lazy Sunday (or Tuesday). Just be sure that it fits your spending plan for the month.

Meal planning: Meal kit service providers aren’t the only ones who can meal plan. You can do it too! Plan your meals ahead, find those bargain deals at the store, and stock up your fridge and pantry every week. Think you don’t have any food in the house? Use your smartphone as a force for good, there are apps that let you plug ingredients in and will spit out a list of recipes you can whip together.

Pickup: You don’t always have to deliver. Make a habit of ordering online but picking your meal up to increase your savings on digital meal services.

3. Sports betting and online gambling

It’s a great time for sports bettors. Not so much for their wallets. Single-game sports betting has been legal in Canada since August 2021. You can now bet on a race, a fight, or a single sporting event or athletic contest at the click of a button, without ever leaving your couch. You can also take part in provincial lotteries, play online casino games, and more.

Of course, not everyone’s a winner — and the proof is in the bank account.

Betting and gambling can be a lot of fun. But the costs add up quickly, and your entertainment experience can quickly become a money pit resulting in a great deal of financial stress.

Tips to manage sports betting and online gambling 

Add it to your entertainment budget: Acknowledge that you are more likely to lose than win — and that’s okay. Treat gaming and betting as an expense and include it as such in your entertainment budget. This will take the pressure off and allow you to enjoy it for the fun it is.

Set limits: Set yourself a limit and don’t spend any more than you budget. Better yet, make that limit the same whether you win or lose. Don’t let a $50 windfall persuade you to overindulge. Practice knowing when to quit while you’re ahead, or behind.

No subscriptions: Cancel subscriptions and only place individual bets within your set budget.

If you feel you are becoming addicted, resources are available to help you get treatment. Every Province has its own program. British Columbians can reach out to the Gambling Support BC Program.

4. Microtransactions

Microtransactions, or in-app purchases, range from the one-time purchase for a single game to the world of expansion packs, downloadable content, and season passes. Often games that are free to download require in-app purchases to remove ads, gain extra lives, or proceed to restricted levels.

The purchase is immediate and usually tied to a credit card saved to an online wallet. Transactions range from $0.99 to $99 or more and can quickly add up to heavy charges. Developers know that the endorphin rush of winning a game, gaining a life, or achieving a new level is short-lived and will leave you wanting — and spending — more. 

Tips to manage microtransactions

Set limits: Sound familiar? These games may not feel like gambling, but they are built on the same basic principles as a slot machine and you need to exercise the same kind of discipline. Limit the number of microtransactions to a set amount so you can enjoy your games without the regret of mounting costs.

Single-purchase games: Some of the top-performing apps and games have an initial purchase cost and no in-app purchases. Don’t fall for developers’ tricks. Read the comments and find out the total cost up front.

Make it less convenient: Another option is to turn off in-app purchases or cancel the automatic payment approval process. Is that extra life really worth running upstairs and getting your credit card? Probably not.

Managing digital costs in the future

These are only four digital services in a list of many hundreds, but the strategies for managing their costs are universal:

  • Know how much you’re spending
  • Be aware of the convenience costs
  • Factor digital services into your monthly budget
  • Allow yourself to indulge in moderation

And, if you’re having trouble managing your spending online:

  • Remove your payment information to make it less convenient
  • Cancel membership subscriptions to sites you’re likely to overindulge on
  • Find alternative options that offer a single up-front fee instead of recurring transactions

Know what you are paying for and when you’re paying for it. Review your automatic and recurring payments frequently and cancel any services that you rarely or never use. Always feel free to take a break — cancel subscriptions for the summer and use fewer delivery services when it’s easier to get out more.

There is a cost to convenience, and you need to weigh the benefits to decide for yourself if they’re worth the investment. And if you haven’t started a budget yet, use our free budgeting tool to get a head start.

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