Wait a second! How did my Netflix monthly cost go up more than 200% without me paying much attention? I remember, not too long ago when it was $7.99 but has somehow skyrocketed to almost $24! In fact, since March 2020 – right when the Covid Pandemic were starting – the price has gone up 4 times. In fact, I tried searching through my credit card statements and the furthest I could go back was to Jan 2017 and at the time, I was paying $9.99. And I believe just a year or two before that, price was at $7.99. So in less than 10 years, price has gone by from around $8 to $24! What other item or service has gone up by 200% in less than 10 years? even with today’s inflationary pressures, you will be hard pressed to find something that has gone as much as Netflix has in the same time span.
While Netflix is just one example, the point we are trying to relay is to watch for the boiling frog syndrome with your finances: are you paying for something that was originally very cheap, but started going up bit by bit, almost every year, and now it is so much more than what you originally paid for, but you didn’t feel the pain because the increase wasn’t done in one shot, but rather gradually? In other words, Netflix wouldn’t raise their pricing by 200% overnight. In fact, they would be foolish to increase it even quarter of that at once. Instead, they would raise it by a dollars or so every few months, so that it is not noticeable. Not only that, but given the service allure and popularity, increasing it by a few percentage points every once in a while will ensure that you are not thinking about cancelling it. The increase is small enough to bear. But if you stop to think about it and put things into prospective, you will notice that you are now paying not double but triple what you paid some 8 years ago. Think to your daily life: how many items have you been paying triple what you did back in 2013-2015? Even things like gas, tuition fees, food, utilities, transportation etc. In fact, here in Canada, housing costs have skyrocketed in the last 8-10 years or so, but even that, depending on where you live, only some places would have seen doubling or tripling or prices.
It’s crucial for individuals to periodically review their expenses and question any gradual increases. Being aware of these changes can help prevent financial surprises and allow for adjustments before costs become overwhelming. Regular financial check-ins, budget assessments, and staying conscious of recurring expenses can help avoid falling victim to the boiling frog syndrome and maintain better control over one’s financial health. For example, if your budgeting for “Entertainment” or “Recreation” is more than what they should be, thanks to Netflix subscription fees, then it is time to make a decision on whether to cancel it. And if not, should you cancel something else you are paying for, like cable TV, Spotify, other music streaming services etc. Unless your budget has room for all of these, something has to give.