Is a Gym Membership a Bad Investment?

Is a Gym Membership a Bad Investment.

A gym membership is one of the few monthly bills people feel pretty good about. It’s for your health, after all. But the promise of a leaner physique, improved energy, or whatever may be drawing you to the gym could be masking the proven drawbacks of gym memberships. We’ve written before about what you should take into account before joining a gym or fitness center. Perhaps the most important fact to consider is that by and large, most people who pay for gym memberships don’t go to the gym.

The average monthly cost of a gym membership is $58, and out of that amount, about $39 per month goes to waste due to under-utilization. This is because 67% of gym members don’t go to the gym, and even more fail to go regularly. According to the 2005 study, “Paying Not to Go to the Gym” by economists Stefano Dellavigna and Ulrike Malmendier, average gym attendance is lower than 4.8 times per month.

Fitness centers know this, of course. In fact, it’s part of their business model. Commercial health clubs need at least 10 times as many members as they can fit in the door to be profitable. Planet Fitness, for example, has an average of 6,500 members per gym, yet its average facility only holds 300 people. Low-priced gyms like this one have the most extreme disparities because it helps them keep prices down. In order to maintain profitability, gyms actually target the customers who are least likely to show up. The typical health club design has even changed to attract customers who aren’t really “gym people.” Weight rooms and intimidating equipment are often hidden in the back, and lobbies are designed to look more like hotels, coffee shops, and restaurants.

Gyms are also notorious for making it a pain in the neck to cancel your membership. But still, why do so many people continue to throw their money away? Why do we sign up for these memberships in the first place if we aren’t going to go to the gym?

In their 2005 study, Dellavigna and Malmendier concluded that it’s because people grossly overestimate their willpower to go to the gym. Participants in the study were offered the choice between a $10-per-visit package and a monthly contract for $70. The monthly contract is a better deal the more you work out, so most people chose this option. But they only ended up going to the gym four times per month, paying 70% more per visit than they would under the other plan.