Lucas and Ana both opened the same email on the same day. "Your subscription is going up by $3 a month from next billing cycle."
Lucas skimmed it. $3 a month is the cost of a coffee. He clicked accept and closed the tab.
Ana paused. She opened her bank statement. She counted seven subscriptions she was paying for. Four of them had sent the same email in the last six months. The $3 raises she had clicked through were now $200 a year, just from her streaming apps.
Same email. Same price change. Lucas paid $200 more this year than last. Ana cancelled two of the four subscriptions on the spot, kept the ones she actually used, and saved $300.
Our minds judge a price change against the current price, not against the original one or the yearly total. Lucas is not careless. His brain simply compared $3 to $0 and decided it was small, the way all our brains do when a price increase is too small to notice in isolation. This behaviour has a name: Anchoring.
A $3 raise on a $15 subscription is a 20 percent jump. Multiply across four subscriptions over a year and the small number becomes a real one. The fix is to do the maths once a year. Not at the moment of each email. Once a year, across all of them.
TL;DR
- Situation: A subscription notifies you of a small price increase. You click accept because the increase feels too small to react to.
- What your mind does: It compares the increase to the current price, not to the original price or the yearly total, so the change feels smaller than it is (this is called Anchoring, see below).
- Consequence: Small raises across several subscriptions add up to hundreds of dollars a year, invisible because each one was "just $3".
- What to do: Once a year, list every subscription you pay for. Multiply each by 12. Cut the ones that are not worth their yearly total.
What to do
- Once a year, open your bank statement and list every recurring subscription. Multiply each monthly amount by 12.
- For each one, ask: would I pay this full yearly amount upfront for what I get? If no, cancel.
- When a price increase email arrives, check the yearly impact. $3 a month is $36 a year. Across four apps, that is $144.
- Set a calendar reminder for the day each subscription renews annually. Decide before the renewal, not after.
What not to do
- Do not click accept on a price increase without checking the yearly total.
- Do not judge a price change against the current price. Judge it against the original price and the yearly bill.
- Do not assume "small" means "not worth your attention". Small repeated over twelve months is medium. Across four subscriptions it is large.
A $3 raise on a subscription is a 20 percent jump dressed up as a coffee. Four of them in a year is rent.
Want to understand why this happens?
Anchoring is the brain's habit of judging a new number against the first number it sees, not against the real value of the thing.
When a subscription costs $15 and goes up to $18, the brain compares $18 to $15. The $3 difference feels small. But the original price might have been $9 when you signed up. The same brain that accepts $18 against $15 would have rejected $18 against $9.
It is not you. It is how every human brain handles a sequence of small price changes over time.
Researchers ran experiments where people were shown two prices in sequence. The first price became the anchor. Every later price was judged against it. When the anchor moved up gradually, the people accepted prices they would have rejected if shown all at once.
The fix is to bring back the original anchor once a year. Compare each subscription not to its current price, but to what you would pay today if you were signing up fresh.
"The brain judges new numbers against the most recent reference point it saw, even when the reference point has been moving in the wrong direction for years." — Dan Ariely (paraphrased from Predictably Irrational, 2008, chapter on arbitrary coherence and the power of the first anchor)
This is called Anchoring. Dan Ariely, Predictably Irrational (2008).
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