This is why a gym membership is worth the cost—if you use it

Is a gym membership worth the cost?

Everybody seems to have their own excuse for why they're not in better shape. The most common ones seem to be "I don't have time" and "I'm too tired." We're all so busy working, sleeping, catching up on Netflix, and working (again), that hitting the gym doesn't sound like the relaxing break from life that we're looking for.

Yet, just about everyone wants to make a commitment to improving their health. Year after year eating better and exercising more are two of the nation's top New Year’s resolutions. But of course, millions of Americans sign up for a gym membership that they ultimately never use.

I would encourage you to take a look at the HHS website to see some stats on US health and fitness. It's alarming. Here are a few stats to whet your appetite:

  • Less than 5% of adults participate in 30 minutes of physical activity each day.
  • More than 80% of adults do not meet the guidelines for both aerobic and muscle-strengthening activities.
  • Recent reports project that by 2030, half [editor note: HALF!] of all adults in the United States will be obese (115 million adults).

Ok, I'll be right back. That makes me want to hit the gym right now.

Why the cost of a gym membership is worth every penny

From a health standpoint, it would seem that we're in a crisis. But this is a personal finance site. So I'm here to make a financial case for why we should all spend more time at the gym. Let's put away our gym shoes for a few minutes, and focus on the dollars.

The average gym membership in the US costs $58 per month, according to a study by the Statistic Brain Research Institute. That's $696 per year.

The average Healthcare spend per person is $10,348 per year, according to National Healthcare Expenditure data published by CMS.

Right off the bat, one point becomes crystal clear. Where is there more room to save money? Healthcare costs.

Of course, it's not quite that simple. Healthcare insurance covers a large portion of those costs, so your actual out-of-pocket cost is typically much lower. CMS estimates the out-of-pocket treatment cost per person is ~$1,105 (excluding health insurance premiums).

For overweight and obese Americans (a growing proportion of the country), these numbers get much worse.

Prevalence of obesity among adults — Behavioral Risk Factor Surveillance System, United States, 2009


Source: CDC


The average annual cost of being overweight in the US is $478 (that's incremental cost above the average of $1,105). For women, the cost is $524 and for men $432.

The average annual cost of being obese is even higher: $3,763 (incremental cost above the average cost of $1,105). For women, the cost is $4,879 and for men $2,646.

To put this into context, let's think about these extra expenses over the course of a lifetime.

The future value of a gym membership

To demonstrate the savings you could achieve, I'd like to examine the value of a gym membership under various scenarios.

For this first analysis, let's imagine there are 3 individuals, all 25 years old. One is average-weight, the second is overweight, and the third is obese. Now let's assume they all stay that same classification (average/overweight/obese) for the next 40 years.

Here are the questions we want to answer for each person:

  1. Average-weight: How much would this person spend on a gym membership, versus save from costs avoided from being neither overweight nor obese?
  2. Overweight: How much would this person spend on being overweight, versus save from costs avoided related to obesity?
  3. Obese: How much would this person spend on costs related to being overweight and obese?

STAY WITH ME. I know. It's starting to get more complex than I promised. Hang in there. I'm here for you. I promise the result is interesting and actionable.

Follow each column vertically for maximum readability.

These values represent the future value of all costs and costs avoided.


How to read this chart:

  1. Average-weight: The total future cost of a gym membership (plus opportunity cost) is $220k. BUT this person gets a return on their investment in the form of costs avoided. These costs avoided are $1.2 million and $175k.
    • Total value in year 40: +$1.2 million!
  2. Overweight: Assume this person doesn't have a gym membership, but they do have the added costs of being overweight of $175k. But they avoid the cost of being obese of $1.2 million.
    • Total value in year 40: +$1.0 million
  3. Obese: Assume this person also doesn't have a gym membership. But they have costs of $175k associated with being overweight, and an additional $1.2 million associated with being obese.
    • Total value in year 40: ($1.4 million)

The conclusion is fairly clear.

By avoiding additional healthcare costs that come with being overweight or obese, we can save ourselves over $1 million in our lifetimes.

I'd say that could accelerate your financial goals juuuust a bit.

I know that there is much more to a person's weight than just having a gym membership. Nutrition and genetics also play a huge role. But for the sake of this analysis, I've simplified it down to the bare bones.

Friendly disclaimer: these values are highly dependent on the assumptions I have made. Each scenario includes the same underlying assumptions:

  • Savings are calculated over a 40-year period (from age 25 to 65) and reinvested at a 7% annual return rate.
  • The price of a gym membership grows at 3% per year, while the Healthcare cost savings grow at 4% per year.
    • The implicit assumption is that the growth of Healthcare costs will outpace the growth in price of a gym membership over time.

I have to say, I'm surprised by the magnitude of the results. Some Americans stand to save over $1 million if they can get their healthcare spending down to the average rate. Who knew?!

Get a gym membership—it's your American duty

So far this has all been targeted toward individuals. It's clear that many of us could accelerate our individual financial goals drastically by improving our health.

But we can't forget that Healthcare costs have become an increasingly large part of US spending as well. From 1960 to 2016, Healthcare spending as a % of GDP grew from 5.0% to 17.9%!

Source: CMS


As the population gets older, this figure will likely continue to grow. Healthcare spending per person has seen a dramatic rise over this same time (nearly 7000% — yes you read that correctly).

Source: CMS


Will legislators take action to reduce drug prices? I'll believe it when I see it. Will CMS increase incentives for doctors to lower the total cost of care? Maybe someday.

In the meantime, the only surefire way of reducing healthcare spending per person is to simply reduce the consumption of those services (i.e. be healthier).

Therefore, I could even argue that it is your American DUTY to get a gym membership—and use it!

Source: CMS

  • How often do you workout?

  • Are you surprised by the amount of potential savings?

  • What are your best tips for getting yourself to the gym?