Well, it's 2020.

Now, be honest.

How many of you decided to kick off the new decade by making a resolution to get into shape?

Does this sound familiar?

You head into your local gym.

The body builders are pumpin', the club music's bumpin', the smoothie station is...blendin'.

And a sales rep presents you with a menu of contract options.

Yo, you ready to get jacked?

Sweet.

You can sign up for a whole year for $600, or on a month-to-month basis for $58 a month, or pay per visit for $10 a day.

So which one should I choose?

[light music] The new you plans on working out three times a week, so the cost per visit for each plan shakes out like this.

We're not including those extra startup fees, since most of the time, those only exist so they can be waived to make you feel like you're getting a bargain.

From a purely mathematical standpoint, the annual contract makes the most sense, and maybe by locking yourself in, you'll be more likely to stick to your resolution.

Psychologists call this strategy precommitment, when your present self tries to control the behavior of your future self by making obligations your future self can't get out of.

Social scientist Jon Elster cited the story of Odysseus and the sirens as a classic example of precommitment.

The sirens were creatures of Greek mythology whose beautiful songs lured sailors to wreck their ships on the rocks.

Odysseus wanted to hear the sirens' songs, so he instructed his men to tie him to the mast.

In other words, he didn't trust his future self to resist temptation, so he took steps to limit his own freedom.

In the same way, gym members tie themselves to a financial commitment to prevent their future selves from succumbing to the temptation of not working out.

Essentially, precommitment is an admission of weakness.

So does it work?

Sometimes, yes.

Setting up an automatic withdrawal on your paycheck into an investment account is a good way of pre-committing to a savings plan.

And buying healthy food at the grocery store does pre-commit you to cooking at home rather than eating out.

But when it comes to gym memberships, the results are a little less optimistic.

According to a survey of over 5,000 American gym members, 82% go less than once a week and 22% stop going completely after 6 months.

So much for precommitment.

In light of those odds, maybe it's best to go with the monthly contract.

Sure, it costs a bit more, but at least if my future self betrays me, I can drop out and cut my losses, right?

(host 1) Maybe not.

Another study on the habits of gym goers or non-gym goers found that members who subscribe to a $70 monthly program ended up using it only 4.3 times per month.

Even though their gyms had a $10 per visit option, they were essentially paying $17 per visit.

And here's where it gets weird.

The whole point of these monthly plans is that you can cancel whenever you want.

But people in the monthly plans were actually 17% more likely than annual members to keep their subscriptions going after 12 months, even if they weren't using them.

Future self, what the heck is wrong with you?

The answer is that the monthly subscribers were on an auto-renewal program, which simply charged their credit cards every month without needing explicit permission from the customer.

Because it's a passive transaction, these auto-renewals don't cause much negative utility, what economists call the emotional pain of losing money.

If those people had to actually hand over 70 bucks in cash on the first of every month, a lot more of them probably would have canceled their memberships.

Auto-renewals, or evergreen clauses, are pretty ubiquitous these days, and they are convenient.

Imagine having to manually renew every regular service you use.

But some companies are less than forthright about it, hiding the clause behind free trials or making canceling an overcomplicated process.

You often won't even be notified when your subscription is renewed because they want you to forget about them.

Gym memberships are especially tough to cancel because it feels like admitting defeat.

And many gyms charge re-sign-up fees that make members just keep paying in the hopes that maybe they'll start using it again.

It sounds like a broken system, but this is actually how it's designed to function.

See, running a gym is actually really expensive.

High utility bills, big spaces filled with tons of fancy equipment, a large staff of trained professionals.

In order to pay for all this, they have to sign up way more people than the facility can actually serve.

Major fitness chains commonly recruit between 5,000 to 10,000 members per location, which have max capacities of just 300 to 500 people.

If just 5% of their members showed up at the same time, they'd have to start turning people away.

So despite all those motivational posters and slogans, they're counting on the vast majority of their members to rarely or never use the service they're paying for.

The silver lining is that if you happen to be one of the small minority who actually uses your gym regularly, well, you're making out like a bandit.

Three or four dollars a visit is an incredible steal only made possible by all those other resolution breakers who are subsidizing your wellness.

Now, of course we're not saying that you shouldn't try to get into shape.

Regular exercise is one of the best things you can do for your body, mind, and pocketbook, since many expensive medical problems can be prevented with a healthy lifestyle.

But there are cheaper ways to kick-start it.

For instance, you can buy a nice pair of running shoes or a bicycle and chart a course through your neighborhood.

Home fitness equipment like weights, bands, even machines can get pretty pricey.

But at least once you own them, you don't have to keep paying every month.

There are also lots of inexpensive apps and online courses and free YouTube videos that can help get you started.

Many fitness experts will say that the most important thing isn't what equipment you use or how many calories you burn in a day, but finding a way to make exercise a lifetime habit.

So how do you do that?

Don't look at us.

We're a financial show.

But we can say that making big financial commitments doesn't seem to work.

If you already exercise three times a week, joining a gym can be a great bargain.

But if you're just starting out, don't think you can extort your future self into exercising with the threat of a deadweight loss.

[sighs] Turns out our future selves are pretty crafty at wriggling out of precommitments, especially when the pain of losing money is no match for the pain I'm gonna feel in my legs tomorrow.

Woof.

(both) And that's our Two Cents.