Services worth paying for
Some services are more important than others, so it makes sense not to skimp on them. This is my personal perspective that has been evolving for almost two decades that I've been using computers. It still is.
I have used free Lastpass plan for roughly a year, but Safari extension was barely usable. I then tried pass (too much effort to make it work), KeePass (don't remember what I didn't like about it), Dashlane (slow client and browser extension), before settling on 1Password. UX is not very intuitive to me, but it's still the most usable of the bunch.
Cloud backup solution
I already had an external HDD for use with Time Machine, but only recently did I pull the trigger on cloud backup. I chose Backblaze because they have no data limits, backup external drives and have a very reasonable price. I enabled private encryption keys, so all data is encrypted on device before being transmitted to the cloud, and I'm the only one who has the keys. I have not tried the reset procedure, which I presume would be painful, as I have 1+ TB of data. Still, peace of mind is definitely worth $50 per year to me.
Paid email provider
It could seem stupid to pay for something you can get for free. I will use Gmail as an example, but the same arguments extend to many other free email providers.
If you're using Gmail and not paying for it, Gmail does not owe anything to you - they can close your account without any warning and there's not much you could do about it. There's also no real customer support for free Gmail clients, so good luck trying to reach someone. Almost all of my online presence is linked to a single email address, so I take it very seriously.
Data mining is another thing. Google already knows way too much about each of us, but using Gmail is basically giving them keys to the kingdom. You are not a customer, you're a product. Real customers are advertisers, because they are the ones paying.
If you know these trade-offs and are fine with it, then continue using free email. If not, then buy your own domain and pay for email service. That way you own your data and can freely change email providers at-will. I chose fastmail, but there are plenty of good ones.
I managed for a long time with github pages and heroku free tier, but jumping through their the hoops and limits can get old pretty quickly. If you're a developer who likes to play around, VPS is a must to experiment, learn and have your own corner on the internet. Hetzner currently provides the best bang for buck in the segment.
Music streaming service
I've been using spotify for 5+ years now and it's hard to imagine leaving it. That itself is a dealbreaker for some - you are locked into a closed platform and you do not own anything. That's a valid point if you take pleasure in collecting music. I never enjoyed hunting down and collecting albums - it was only means to an end. If there's a way to access most on the recorded music within one search bar - bring it on.
Spotify is a great positive example of data-mining - it has an elaborate profile on me, but for a very specific purpose of picking the best music, and I can definitely feel the benefits. I feel like the streaming services have been commodified in terms of music selection, but recommendation engines are the remaining differentiators. That is probably the reason why my experience with Tidal and Apple Music wasn't even close to Spotify.
I remember when in the early days Spotify had huge omissions (like the entire Beatles discography), but these days I can only think of a few missing artists. Honestly, I feel like Spotify is not charging enough for the service they provide.
If free alternatives work for you - great! However, if the tool you like the most is paid, it's definitely worth paying for it, as the value you will get from it will be huge.