The explosion of the sharing economy may be working wonders on your bank balance by reducing the amount of ‘stuff’ you own. Today you can ‘borrow’ cars, bicycles, cottages, or even an entire music library.
Ways to share are everywhere— according to research from PwC, the global sharing economy is forecast to grow to $335 billion by 2025, up from only $15 billion in 2013.
Paulette Thompson, a counsellor manager with Credit Canada in Toronto says tapping into shared resources can be helpful for those looking to save.
“Overall, [sharing] can be a very successful tool for money management and budgeting, depending on how you use it,” she says.
However, these subscription purchases left unchecked can be expensive. Here’s how to make the most of shared services:
Get Real: What and how we consume goods and services is very individual. Be honest about how often you’ll borrow a car or how many hours per week you’ll watch streaming tv. Charmaine Huber, a Barrie-Ont. based-certified money coach with Money Coaches Canada, recommends reviewing your budget first and to select the services that will truly enhance your life. You don’t have to sign up for everything.
Ask around: Before committing, says Thompson, ask family, friends and co-workers about their experiences with a particular product or service, and compare prices. By finding out extra details in advance, you may save yourself the work and expense of subscribing to something that’s not for you.
In her life, before signing up for a car sharing service membership, Thompson asked co-workers for their ‘good, bad and ugly’ experiences. After finding out that car share she was most interested in is geared towards short-term rather than full weekend use, she opted instead to rent when she needed.
“Had I not talked to anyone and not looked into it, I could have actually been paying more in the long run,” she says.
Share It: Consider splitting the cost of services with others. For example, a meal-delivery service could be shared with neighbours if you can add multiple account users with each person sharing a part of the bill.
Get Creative: We’re all familiar with popular streaming providers like Netflix or Spotify, carshare apps like Zipcar and vacation rental sites such as AirBnb. But savings from the sharing economy can also be found elsewhere. If you’re self-employed, for example, could you share overhead at an office-share? Perhaps you could grow your own produce by renting space in a community garden?
Use it or lose it: One area where people often fail to realize savings from the sharing economy, says Huber, is by not using what they pay for.
It’s easy to subscribe to several services to take advantage of promotions. But you don’t want to be paying for three music streaming services that you don’t use.
“[People] sort of slough it off as ‘it’s not a big deal, it’s not a large amount so it doesn’t really matter’,” says Huber. But, she adds, it’s important to look beyond the monthly fee — even if it’s only equivalent to the price of a couple of Starbucks coffees — to ensure you’re getting value.
“Are you actually using it or are you just adding to that company’s stock price, in which case you might be better off just owning the stock instead.”