Thrift Is Beautiful: The Gym

If you're a total gym-o-holic and your gym activities are a huge part of your free time, social life, and personal image, you'll probably read this article and think, "yeah, but it's worth it!"  If you're in that camp and a gym membership is one of your thoughtfully-chosen luxuries, have at it.  For the other 99.9% of us...

According to StatisticsBrain, fitness gyms are a $20 billion dollar industry.  45 million people pay an average of $55 per month to for gym memberships.  But fitness is good and it's totally worth it, right?
pumping some serious iron

67% of people with a gym membership never visit the gym.
Of these $55 spent per month, $39 are estimated to go to waste due to underutilization.  People pay for access to the gym, and then they just don't make time for it.  Don't be That Guy Subsidizing Everyone Else's Towel Service with your fitness commitment failings!

Let's take a look at the numbers.

Future Value Factor (FVF) Analysis

Say you're saving and investing 40% of your income and planning to retire in approximately 20 years.  If the market average return is in the vicinity of 7% (and this is historically very reasonable), that puts your Future Value Factors (FVFs) at approximately 4x, 40x, 500x, and 15500x for one-time, annual, monthly, and daily purchases, respectively.

This brings the real cost of a $55 membership to $27,500 at retirement.  Depending on what you make, that will push back retirement by a couple of months to a year.

But wait!  The cost of the membership is not necessarily the only financial cost of going to the gym.  If you walk/jog/run or ride your bike to the gym, you can certainly write off the commute time as part of the workout.  But if you drive, you certainly can't!  If the gym is 10 miles away and you visit three times a week, that's ($0.55 /mile) x (10 miles) x (2 ways) x (3 trips/week) / (7 days/week) = $4.70 a day.  Your trips to the gym will cost almost three times more ($140) than the gym membership!  And now we're in Latte Land - that extra $4.70 a day will hack another $73,000 off of your invested savings at retirement.  Added to the membership, that's one hundred thousand dollars you'll have to make up.

Keep in mind, these calculations are for a relatively-short-by-American-standards 20-year retirement horizon.  At the standard-issue 45-year employment duration and a 7% market annualized market return, your Future Value Factors will be seven times larger.  That's almost $200,000 for the gym membership and over $500,000 for the gym commute.  At the pathetic average US savings rate of 6% (or the just-as-pathetic recommended savings rate of 10%), that's a huge increase in the number of years you would need to work to completely cover your expenses with investment earnings.  (From this, you can probably see how impossible it is to reach Financial Independence at these savings rates.  The vast majority of workers never reach complete coverage, and most people are forced to scale back their expenses substantially in retirement.)

Of course... if you're one of the 67% who don't go at all, I guess you don't have to worry about those transportation costs.

Smart Alternatives

Considering only the financial cost of the membership, you could spend $6,900 to outfit a home gym today and you'd break even at retirement.  $6,900 will buy quite a lot of freeweights on Craigslist!  (and with the astronomical failure rate of fitness commitment attempts, you can bet that Craigslist is absolutely overflowing with almost-new exercise equipment)

But wait!  Gravity also works outside of gyms.  You can take advantage of this by doing all sorts of fitness activities that do not require a membership:
  1. walking, jogging, running, hiking (locally, or bike there - watch out for transport costs)
  2. bicycling (if you already use it for transport, the extra maintenance cost is negligible)
  3. sports in the park with friends or in community/school/work leagues
Of course, there are some activities that might be difficult or impossible to do without a membership to the right kind of gym (for instance, martial arts or rock climbing).  If you've taken up a fitness hobby that requires regular payments, make the most of it!  If you're participating in your paid activity three times a week for two hours and it's costing you $55 a month, your cost per hour is only $2.  You can shave off those couple dollars per day somewhere else, by cooking a meal instead of going to a restaurant, skipping a beer at happy hour, borrowing from the library instead of buying, driving less, etcetera etcetera.  If you need more ideas/inspiration, Mr. Money Mustache would be happy to help.

If you can't make the time, don't hesitate to drop the membership.  Don't let your pride make you a sucker.

If you're looking for something low cost that's a little different, considering learning an array of bodyweight exercises.  Everyone knows push-ups and sit-ups, but there are a whole universe of exercises out there that require no or minimal equipment.  You can find descriptions in books like Mark Lauren's popular book You Are Your Own Gym, and there are tons of descriptions and videos on Wikipedia, YouTube, About.com, and a million other places.  No memberships necessary - go crazy!

Working out at home has additional perks:
  1. no commute time
  2. your home gym is open 24/7
  3. no waiting on sweaty strangers for equipment
  4. you can look as dumb as you want
  5. pants optional
  6. these guys aren't there:

Need some general-purpose mass to throw around?  25lb bag of salt at Costco: $3.99.  Pick up a used Wheel of Unexpected Difficulty/Torture on Craigslist, and you're good to go!