In our day and age, on-demand services are a modern convenience that are hard to avoid. For many of us, getting food delivered to our doorsteps, or taking a rideshare home from the local dive is just part of our daily routine.
Per the Harvard Business Review, the on-demand economy is a $57.6 billion dollar industry, and more than 22.4 million people use its services. It’s no doubt convenient and even fun, but if you’re not careful, partaking in on-demand services can lead to overspending.
You might be prone to doling out extra cash just to hit a minimum delivery total on food, or getting lazy and ordering a rideshare instead of hopping on the train. If you find yourself mired in a spending trap when it comes to on-demand services, here’s what you can do to scale back:
Pick Your Poison
Instead of going hog-wild with routine grocery deliveries, a weekly house-cleaning service, and ride-sharing all weekend long, indulge in just one type of on-demand service. That way you aren’t spending on a bunch of things. Think of what would add the most value in your life, or what you would enjoy the most.
Case in point: Call me weird, but I personally never got into having food delivered. There’s something a bit odd about having a perfect stranger come to your home and drop off a pizza. I work out of my home most of the time and welcome breaks outside of the house. However, I will indulge in taking a rideshare instead of driving or taking public transit —especially since I live in Los Angeles, where traffic on a busy Saturday evening can be a nightmare.
Make the Most of Referral Codes
My friend Greg is a master at hustling referral codes. Over the years he’s earned hundreds of dollars in credit for everything from food delivery to ride share services —all by offering a referral code. So what’s his secret?
First, as a barber who owns his own shop in Chicago, instead of asking for tips he asks his customers if they might be interested in taking him up on one of his referral codes. According to Greg, there are two camps of people when it comes to these offers: Those who get turned off if you let them know that you’ll benefit by extending a referral code, and those who are actually more inclined to help you if they know that you’ll rake in some credit, too.
If you know your “audience,” you’ll be able to position the ask so they’re more inclined to accept the deal. For instance, strangers and acquaintances might be more likely to take you up on your offer if you don’t mention you’ll also benefit from the referral. And friends and family land typically in the second camp. Figuring out the best way to frame the ask could net you more referrals.
Know When It Can Help You Save
This might seem counterintuitive, but there are a number of situations where spending on modern-day conveniences can actually help you save. For instance, it might be more cost-effective to spend a little more on home grocery delivery if it saves you time on errands. And if you’re spending more time earning those dollars, it could be well worth your while.
Or let’s say you’re sick or disabled and have mobility issues. For instance, my friend, who is in her mid-80s, has ailing health. She became ill about a year ago. Since then, she has most of her groceries delivered to her home, and buys most of her clothes, household items, and gifts online. Not only is it far easier for her to order things online than to step into a brick and mortar store, but she saves money by not needing to hire a helper to accompany her on her shopping trips.
Monitor Your Spending
When it comes to scaling back, it’s helpful to see how much you’re actually spending and when. Some money management apps allow you to track your spending with a specific service. If not, you can see how much you’re spending by category.
You can also look at bank or credit card statements to see exactly how much you’re spending on each service you use. If you’re exceeding what you can comfortably spend in a given month, you might want to consider scaling back or tweaking your spending plan.
Tally Your Total Before Checkout
Take advantage of the fact that you can always check your total before checkout. Unlike shopping in a store, where you often have to estimate roughly how much you’ll be spending, when you buy something online, you can easily see how much your total will be before you proceed with the purchase.
I know this might come off as super nerdy, but when I’m at a physical store, I’ll go through my basket of items and remove stuff I realize I don’t really want, won’t use, or can’t afford. Similarly, before I make an online purchase, I’ll go through the items in my shopping cart to see how much I’m spending —and remove things I can do without.
As far as budgets go, you don’t need to necessarily create a spending category specifically for, say, rideshares. But see how much more you might spend on taking ride shares over the weekend versus driving or taking the train or bus. And if it’s worth it to you, see if you can cut back in another area. For instance, while I do tend to rideshare to concerts, meetups with friends, and the like, I also eat in more often than not. In turn, I’ll save on grocery costs.
As long as you’re paying off your debt, and ideally setting some money aside for your emergency fund and other savings goals, at the end of the day it doesn’t matter if you spend $200 on transportation or $300. It’s all coming from the same pot of money, anyway.
While it’s quite easy to fall prey to the on-demand services spending trap, you can avoid spending too much by tracking your spending, making adjustments as necessary, tapping into referral codes, and spending a bit of time assessing whether it’s worth doling out extra cash for the convenience.
Which on-demand services can you afford to cut back on? Let us know in the comments!