“Don’t go to the grave with life unused.” — Bobby Bowden

Gym MembershipsStephen J. Dubner and Steven D. Levitt, the authors of Freakonomics recently wrote an article in the New York Times magazine about The Gift Card Economy and asked, “What do a gym membership, a bottle of prescription pills and a holiday gift card have in common? Each of them is a thing that is bought and then often goes unused.”

Why do people pay for a gym membership and then not use it? Tim Harford writes the Dear Economist column for the Financial Times and this is his response to a reader that had hardly been to the gym since joining and asked if she should cancel her membership or keep it as an incentive to get in shape.

He suggests, “Many health clubs offer three types of membership. There is the option for the infrequent visitor – a pass entitling you to, say, 10 visits. Then there is a monthly membership that continues indefinitely until cancelled. This is handy for regulars who may have to move or travel and so want the option of cancelling. There is also annual membership which lapses if not renewed: this is cheaper per month, but less flexible.”

“Different contracts suit different people, but we almost invariably pick the wrong one. For example, the monthly contract is favored by people like you, who don’t actually show up to the gym. My recommendation is for you to see if you can switch to a pay-per-visit pass. This will work out cheaper unless you experience a startling change of willpower.”

The Freakonomics guys offer similar advice based on the recent paper “Paying Not to Go to the Gym,” by Stefano DellaVigna and Ulrike Malmendier. They write, “It showed that people who buy an annual membership to a health club overestimate by more than 70 percent how much they’ll actually use it. Many people, therefore, would be better off buying monthly or daily passes.”

The best advice came from Nic Cicutti in his MSN article entitled: Gym Membership: Six Questions to Ask Yourself.

1. Why do we pay for something we don’t use?
2. What should I do?
3. What should I know before I join?
4. How can I find cheap membership?
5. Do I actually need gym membership?
6. What else could I spend the money on?

He begins by asking, “Why do we pay for something we don’t use?” The answer: “Psychology: we join a gym in the belief that paying all that money will make our exercise regime twice as effective. But because we don’t go very often, we end up feeling guilty. Yet cancelling the membership means admitting defeat.”

Click on the title above or here for the answers to 2-5 but I’ll skip to number 6: What else could I spend the money on? Cicutti writes, “The Sainsbury’s research quoted earlier also found that more than 6.3 million people said their mortgages have made them feel ill through depression, stress and anxiety as they try to cope with their payments.”

“And yet had they increased the amount they repay to their mortgage lender by  £31 a month — which just happens to be the average monthly gym membership fee — they would have saved themselves a small fortune. In fact, a 25-year mortgage of  £80,000 would be cut by two years and 10 months, saving almost  £8,000 in interest payments.” Nic writes for the UK version of MSN so don’t mind the pounds. The concept translates to dollars quite easily.

All of the above begs the question, is the gym membership worth it? What do you think?