Pocket money and the pitfalls of online subscriptions: costly mistakes to avoid for your children

Digital pocket money is becoming a common tool for introducing young people to financial management. However, it comes with a little-known but very real risk: online subscriptions. Whether on a streaming service, a game or an app, these subscriptions can be costly and difficult to keep track of, especially for teenagers who are just discovering the value of money. Here's how to help your kids avoid the pitfalls of automatic subscriptions and manage their pocket money wisely.

Subscriptions: a well-hidden trap

The rise of online services has made subscriptions more accessible than ever. One click is often all it takes to activate a subscription, sometimes after a free trial period or under the guise of attractive "premium" services. Unfortunately, many young people don't realize that these subscriptions are automatically renewed, debiting their account every month without paying any attention.

According to a survey by Youth Consumer Report, 68% of 12 to 17 year-olds say they have taken out at least one online subscription in the past year, often for entertainment or gaming services. Of these, 45% admit they don't know exactly how much they spend on these services. This lack of visibility is accentuated by the ease of activating subscriptions and the high frequency of promotional offers.

The importance of tracking and managing subscriptions

Proactive management of subscriptions is crucial to avoiding unnecessary costs and controlling your budget. For young people, who often have a limited budget, the ability to track and list current subscriptions is essential. Being able to check regularly which subscriptions are active and how much they cost helps avoid unnecessary expenditure. But that's not always enough: it's also important to be able to stop a subscription when it's no longer needed, so you can regain control over your pocket money.

This visibility and control of online subscriptions are fundamental elements in young people's financial learning, enabling them to adopt good practices from the outset.

The financial risks of automatic subscriptions

Once a subscription is activated, it becomes a recurring expense that can quickly eat into pocket money. This problem is particularly acute among young people who, not yet having a stable income, see their limited budget melting away without them being fully aware of it. A €5-a-month subscription to a gaming or streaming service may seem affordable, but when added to other similar expenses, it can represent a substantial chunk of their pocket money.

Statista 's study of young people's financial management revealed that 35% of teenagers were surprised to see their balance dwindle due to subscriptions they had forgotten about or were unaware of automatically renewing. This lack of control often leads to frustration and confusion, impacting their experience of learning how to manage their finances.

Understanding subscription marketing strategy

Online subscriptions rely on subtle marketing techniques, often designed to elicit long-term commitments. Free trial periods, premium options or exclusive upgrades are all ways of convincing young people to subscribe. These strategies play on the desire not to miss out on popular content, creating a kind of social pressure.

Another common pitfall is the "habituation effect": once young people have become accustomed to a service, they find it difficult to do without it, and renew almost automatically. Companies know that the longer a user remains a subscriber, the less likely he or she is to cancel, especially if the offer seems affordable at the outset.

Tips to help your child avoid these mistakes

To protect your children from the pitfalls of automatic subscriptions, here are a few practical tips:

‍Examinesubscription conditions:

Encourage your child to check whether it's a one-time or recurring subscription. Explain the differences between trial periods and paid subscriptions, and why it's essential to read the fine print before signing up.

Promoting financial transparency:

If your child uses a digital card or account, encourage him or her to check his or her transaction history regularly. This will help them identify recurring debits and the associated charges.

Budgeting for subscriptions:

Suggest that your child devote a limited portion of his pocket money to subscriptions. By setting a limit, your child will learn to prioritize the services that really count, and to question the usefulness of each expense.

Encourage free alternatives:

Before taking out a subscription, check whether there are free alternatives or similar content that doesn't require payment. Free options can often meet entertainment needs without compromising the budget.

Use reminders to cancel before renewal:

If your child wants to try out a service with a trial period, show him how to set a reminder to cancel before automatic renewal. This will help them stay in control and avoid unpleasant surprises.

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