Almost every subscription app offers two prices: monthly, or annual with a discount. Many people pick annual because “two months free” sounds like a win. Whether it is depends on one thing: how likely you are to still be using the app in month twelve.
The break-even month
Divide the annual price by the monthly price. The result is the number of months after which annual becomes cheaper than paying monthly.
| Monthly price | Annual price | Break-even | Annual saving if you stay 12 months |
|---|---|---|---|
| $10 | $96 | 9.6 months | $24 (20%) |
| $12 | $99 | 8.3 months | $45 (31%) |
| $15 | $150 | 10 months | $30 (17%) |
| $8 | $60 | 7.5 months | $36 (38%) |
If you stop using the app before the break-even month, monthly would have been cheaper. Our annual vs monthly calculator does this for any price and adds your own estimate of how likely you are to keep using it.
Factor in honest probability
Ask yourself: what is the chance I still use this in a year? Be realistic. Fitness, language-learning and productivity apps are famous for enthusiastic starts and quiet abandonment. If you would put the chance at 60%, the expected value of the annual plan falls accordingly. A good rule:
- Choose annual for tools you have already used for at least two or three months, or that are part of your work.
- Choose monthly for anything new, seasonal, or tied to a goal you have not yet built a habit around.
Try monthly, then switch
The safest pattern: start monthly, use the app for two or three cycles, then switch to annual if it has earned its place. You lose a little of the discount in exchange for not betting on a product you have not tested. Many apps let you switch plans at any time, and some apply your remaining monthly balance.
Watch the renewal
Annual plans renew automatically, and introductory annual prices may not apply at renewal. Put a reminder in your calendar a few days before renewal so the decision is active rather than automatic. On iPhone and Android, the subscription screen shows the next renewal date.
When annual is clearly right
- Software you use daily for work, especially if your employer reimburses it.
- Services you have used continuously for a year or more.
- Black Friday or seasonal offers on tools you were already going to renew. Check our sale calendar for timing.
When monthly is clearly right
- New apps, however promising.
- Seasonal use, such as tax software, a travel app or a sport you play for part of the year. Subscribe for the months you need, then cancel.
- Anything where a free tier or free alternative might do the job; check free alternatives first.
The bottom line
The annual discount is a payment for your commitment. Only make that commitment for apps that have already proved they belong in your routine.