If you’ve been reading my newest blog, No. Calories Needed, the you know that I recently joined a local gym.Â (And if you haven’t been reading my newest blog, get to it!Â You know you want to!Â See if I can do with my fat what I did with my debt.Â Get rid of it!)Â The gym offers a discount if you sign up for a monthly “bank draft”.Â The regular monthly fee is $35.Â The discounted fee for a “bank draft” account is $31.Â Over the course of a year, that’s a savings of $48, so I signed up for the monthly “bank draft”.Â Today, however, while I was checking in at the counter, I noticed that there was an ADDITIONAL sign-up option.Â If I prepaid for a year, I could get a monthly rate of $29.Â Over the course of a year, that’s an additional savings of $24.Â I’ve just run the numbers and I’ve decided to prepay for the year.Â Here are the reasons:
- The obvious reason is the $24 discount.
- If I put $372 in a savings account ($31 x 12) at 5%, I could make $18.60 in interest in a year.Â That amount is LESS than the $24 discount, so the discount is a good deal.Â (Plus, the $372 would be reduced every month, and the actual interest earned would be less than $18.60)
- I don’t particularly like to give access to my checking account.
Of course, if I prepay, I’m STUCK with a solid year of gym membership.Â I’m actually using this to my advantage.Â I’m so cheap, that I will probably continue to go to the gym for the entire year, if only to “get my money’s worth”. 🙂
If you are offered a discount for prepaying, consider the following:
- Is the discount MORE or LESS than I could earn in interest?
- Will I actually use the service for the ENTIRE time for which I am paying?
- Can I get the discount even if I don’t prepay?Â (In other words, ask the people offering the service if you can get a discount for using cash, etc.)
Oh yeah, for those of you who were wondering, I will be paying for this membership with money that I made this month from eBay sales.
2 thoughts on “Joining A Gym: The Financial Impact”
I just bought a gym membership after much debating and reading your post.
How should I budget for something I pre-paid? I used the extra cash my dad gave me recently to cover the expenses ($600). But that’s just as a temporary solution. Should I include $14 into my monthly budget as my gym membership or not include the expense since it’s paid for already?
Well, if it’s already paid for, you don’t really have to include it in your budget…
But, if you are going to have to pay for it in the future (from the looks of your post, it looks like that will be in 3 years), you’ll need to budget for it then…
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