Financial anxiety and the science of recurring bills

Financial anxiety has been studied in its own right — and ambient, ongoing financial uncertainty is consistently the strongest predictor.

Netemeyer and colleagues' 2018 Journal of Consumer Research paper distinguished current money management stress from expected future financial security, and showed that both contribute to overall financial well-being and life satisfaction — but through different pathways.

Netemeyer et al.: "Two distinct but related constructs of financial well-being — current money management stress and expected future financial security — explain substantial unique variance in overall well-being beyond income." — Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch, J. G. Jr. (2018). "How Am I Doing? Perceived Financial Well-Being, Its Potential Antecedents, and Its Relation to Overall Well-Being." Journal of Consumer Research, 45(1), 68–89.

Recurring subscriptions act on both pathways. They contribute small, ambiguous current-stress contributions ("how much am I actually paying for all of this?") and create future uncertainty ("what will all these charges look like a year from now?"). The mind handles known stressors better than ambiguous ongoing ones, which is why subscription-related anxiety often outweighs the dollar amounts involved.

The intervention with the most consistent experimental support is resolution of ambiguity. Studies in financial well-being consistently find that knowing the total — even if the total is the same — reduces measured anxiety, because the ambient uncertainty component disappears once the number is known.

What to do

Spend twenty minutes pulling subscription totals from the last 90 days of card statements. The decision about what to keep can wait; the number itself is the intervention.

References

• Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch, J. G. Jr. (2018). Journal of Consumer Research, 45(1), 68–89.

Related: Subscription fatigue · Forgotten subscriptions · Subscription creep