This is educational material, not personal financial advice. The numbers in this lesson are made-up examples: AI services change their plans often, so the lesson doesn't quote prices for specific products. For current plans, see the What's current page and the services' official websites.
The gist
AI tools are cheap one at a time and expensive together. One subscription costs less than a daily cup of coffee. Five subscriptions, two free trials you forgot to cancel, and a pay-as-you-go service with no spending cap add up to an amount you actually notice in your budget.
The goal of this lesson isn't to pay as little as possible. The goal is for every dollar you spend on AI to come back to you as time or money.
Key terms
| Term | What it means in plain English |
|---|---|
| Free plan | You use it without paying, but with limits: number of requests, speed, access to the stronger models |
| Subscription | A fixed amount per month or per year, no matter how much you use it |
| Pay as you go | You pay for volume: per request, per amount of text processed (tokens), per minute, per image. This is usually how an API works (the way you connect AI to your own software) |
| Credits | A prepaid bundle of units that get used up on each generation. Common with image, video and voice services |
| Cost per use | What one session with the service actually cost you, each time you opened it |
The theory: what your setup is made of
Three levels of setup
| Level | Who it fits | What it usually includes |
|---|---|---|
| User | You use AI in your work | One AI assistant: the free plan or one subscription |
| Client services | You earn with AI | The assistant + 1–3 services for specific jobs: images, meeting transcription, slide decks |
| Your own product | You're building a product with AI | An assistant for your own work + pay-as-you-go API usage + hosting + automation |
Start at the lowest level. Add each new service when you see a specific task where it saves you time, not "just in case."
A worked example: the subscription audit
Say someone creates copy and visuals for small businesses. Six months in, their setup looks like this (the numbers are made up):
| Service | Per month | Times used this month | Cost per use |
|---|---|---|---|
| AI assistant A | $20 | 60 | $0.33 |
| AI assistant B | $20 | 3 | $6.67 |
| Image generator | $30 | 12 | $2.50 |
| Meeting transcription | $15 | 8 | $1.88 |
| Video generator | $35 | 1 | $35.00 |
| Slide deck service | $10 | 0 | can't calculate: never used |
| Total | $130 |
The formula is simple:
Cost per use = what you pay per month ÷ how many times you used it
Now it's clear what to do with each row:
| Service | Decision | Why |
|---|---|---|
| Assistant A | Keep | You use it every day; the cost per use is pocket change |
| Assistant B | Cancel | It does the same thing as A. For three times a month, the free plan will do |
| Images | Keep | A regular part of the work |
| Meeting transcription | Keep | 8 meetings, and each one saves half an hour of note-taking |
| Video | Switch to one-off credits | For one video a month, paying per use is cheaper, say $8 |
| Slide decks | Cancel | Never used it once |
After the audit: $20 + $30 + $15 + $8 = $73 a month instead of $130. That's $57 a month saved, or $684 a year. Same work.
AI costs belong in your price
This section is for people who earn with AI. If you have 6 clients, $73 on tools works out to about $12 per client per month. That money should be built into your price as part of your fixed costs (the ones that don't depend on how many clients you have). Fixed costs set your price floor: the minimum below which you're working at a loss. The pricing lesson, later in the course, covers it in detail. If your AI costs grow with the amount of work (credits, pay-as-you-go), treat them as a variable cost per client (a cost that grows with each new client); the unit economics lesson, also still ahead, shows how.
A useful check: what share of your revenue goes to AI tools. If you bring in $1,800 and your setup costs $73, that's about 4%. If that share grows faster than your revenue, it's time for an audit.
Where the money leaks
- Two subscriptions that do the same thing. Often it's two assistants or two generators doing identical work.
- Forgotten free trials. A free week quietly turns into a paid month or a paid year.
- Paying for a year up front. A yearly plan is usually cheaper per month, but it only pays off for a service you already use regularly. Pay monthly for the first 2–3 months.
- Pay-as-you-go with no cap. A bug in an automation or a request stuck in a loop can burn through a month's budget overnight. Many pay-as-you-go services let you set a spending limit or an alert in your account settings. Find that setting before the first run. If there isn't one, keep only a small prepaid balance on the account.
- The most expensive plan "so it's definitely enough." Start smaller and move up when you actually hit the limits.
- Taxes and card fees. The price on the website isn't always what you pay. Depending on where you live, tax may be added, and if a service bills in a foreign currency, your card may charge a foreign transaction fee. Look at the final amount on your statement, not the price on the website.
Where not to cut
A service that saves you a few hours every week almost always costs less than those hours. If a $20 subscription frees up 5 hours a month and your hour is worth $20, the service gives you back $100 worth of time a month. Cut what you don't use, not what's working.
Common mistakes
❌ A subscription "just in case." A service without a specific task almost always sits idle.
❌ Not calculating cost per use. The monthly amount looks small, but a single use ends up costing more than a one-off purchase would.
❌ A yearly plan before you've tested it. First make sure you actually use it regularly.
❌ Pay-as-you-go without a spending limit. The most expensive mistake you can make.
❌ AI costs left out of your price. Then the tools come out of your own earnings instead of being paid for by the client.
❌ Cutting what makes you money. Canceling a working tool to save $20 and losing 5 hours a month is a bad trade.
Practice
Exercise: audit your own AI setup (30 minutes)
Step 1. Open your card and bank statements for the last 2–3 months and find every payment for AI services and software. Include free trials that are about to end. If you don't pay for any AI services yet, do the exercise for the setup you're planning to pay for: fill in the services and their plan prices from the What's current page.
Step 2. Fill in the table:
| Service | Payment type | Per month | What task it's for | Times used this month | Cost per use |
|---|---|---|---|---|---|
Step 3. For each row, make a decision: keep, downgrade, cancel, or switch to paying per use. Work out your yearly savings: add up the monthly prices of the rows you're dropping and multiply by 12. To see what the whole setup costs per month and per year, use the "Monthly cost of your AI tool stack" calculator on the Calculators page.
Step 4. Ask your AI assistant to find the overlaps:
Here is my set of AI services: [the table from Step 2]. Find the services that do the same thing. Suggest what to keep, what to cancel and what to switch to paying per use, and explain why. Don't quote prices or plans from memory: if a decision depends on a price, tell me which price I should check on the official website.
AI may not know current plans and features: services change faster than a model's knowledge gets updated. Check every decision against the service's official website and the What's current page.
Step 5. Do three things today:
- Cancel what you decided to cancel.
- Set a spending limit on everything you pay for by usage.
- Put a reminder in your calendar 2 days before each free trial ends, plus a repeat audit one month from now.
What you should end up with: a table with a decision for every row, and one number, your savings for the year.
Key takeaways
Don't look at the monthly total; look at the cost per use. It shows you right away what you don't need.
Add a service for a specific task, and keep it only as long as it saves more than it costs.
AI costs belong in the price of your service. Pay-as-you-go always comes with a spending limit.
Next lesson
Next in the course:
→ Jobs of the future: 100 new and hybrid AI careers: how AI is changing professions.
If you're on the Earn with AI path: pricing your service is covered in the Money in plain words module and in Value-based pricing (how to sell results, not hours). Those are still ahead.
More on AI costs: the previous lesson, How much to spend on AI (what to buy at each budget level), and, from the deep-dive library, Cost engineering (how to lower your product's AI costs).
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