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Comment by devney | Hacker News Reader

I am frankly astonished by this article and all of these comments. Right now I have only 3 digital subscriptions totalling $20.58/month. (Admittedly that's low right now; I usually have an additional 2 streaming services, rotated every few months, for maybe another $25/month).

The key thing to remember is that any recurring subscription costs us theoretically infinite money (given infinite time). Obviously we won't have that subscription forever, so it's up to us to calculate how much it will cost us over the next month, year, decade.

Any time someone says "Just $N per month!" all I hear is "costs infinite money unless I do something about that." This thought really helps me resist leaking money like that.

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That seems like an unhelpful way of thinking about it. I always think about it as "I make X per Month. This thing costs Y per month. Is Y/X a reasonable amount of money to spend on a thing?"

By your logic, I earn "just $N per month" so I'll earn infinite money unless I'm fired. That's obviously not a useful way to budget, but neither is thinking about $5/month as "costs infinite money".

If, after taxes and mandatory expenses I have $500/month left over, then the proposition "Should I spend 1% of my discretionary money on this?" is a much more reasonable way to think about things until your financial situation changes. If I lose my job, or take a pay cut, then it's obviously time to consider cutting back unnecessary expenses, but otherwise, it's as "infinite" as my income.

>> Is Y/X a reasonable amount of money to spend on a thing?

The proper question to ask is sum(Yi)/X a reasonable amount of money to spend. If not, which Yi is not providing the desired marginal utility.

It is interesting to me that you have income and outflow so tightly coupled that you think in terms of "N% of income".

I did that for several decades. These days I take pains to decouple income and outflow. That is: I judge the expenditure on its own merits, whether I need or want it by itself, without regard to what % of income it might be.

Think of it like a leaky bucket: my paycheck goes in the top, and I control how much leaks out the bottom. Of course, I am lucky enough to have that luxury. Many people (most Americans) don't have enough income to decouple outflow from it, and are forced to think in percentages of income.

Sure - there's benefits to both ways of thinking about it. It's less that I tightly couple them and more that I find, for a sufficiently low percentage of my income, it's not worth stressing that much about the expense.

My mental model is quite close to yours for larger purchases ($100 or more, generally), but for something whose monthly cost is less than my hourly wage, thinking too long about if it's really worthwhile is probably not a great use of my time.

It's just a matter of cashflow. Presumably, you will continue making money. Either from salary or hopefully from investments / pension later on. Is money in > money out? Then you're good. You can keep paying infinitely if you have income infinitely.

Another one like the OP. Addicted to subscriptions. Terrible.

Only subscription here is my cell phone plan.

Unless you plan on living to infinity too, I don't think the cost of a subscription is infinite.

I call it the nickel-and-diming of consumers.

(We don't have to play.)

We also make infinite income, given infinite time, and spend an infinite amount on every purchase category, including one-time purchases. :)

Payment / discount rate (PV of perpetuity) is a good way to evaluate alternative purchases against an ongoing subscription, though.

An infinitely recurring payment shouldn't be thought of as costing infinite money, even though that's what you'll pay over time. The later payments aren't worth as much as the payments today because the money today can be invested. It turns out that the value of money decays exponentially over time, and the total value of the money paid is an infinite series that converges to P/r, where P is the payment and r is the applicable interest rate.

So a never-ending subscription of $100/yr is worth about 100/0.03 = $3333 total today (assuming you would have invested the money in something like a 5-year treasury bond instead). Still a lot, but not infinite.

This all assumes a price that doesn't creep up. I only know of one of my subscriptions that hasn't increased pricing in the last several years.

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