Personal Finance 

Money Leaks: Canceling Unused Memberships

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How many memberships do you have? How many of those do you use often enough to justify the fees? When was the last time you sat down and took a long look at what you were paying and whether it was still worth it? If it’s been a while, now’s a pretty good time to do it. 🙂

The classic unused membership is, of course, the gym membership. For the month or so after New Year’s Day, our gym is absolutely packed with people looking to achieve their resolutions. The influx of new people only lasts about a month or two before it goes back to its pre-NY resolution levels. While the people may no longer be going, their money continues to go to the gym since gyms know about this behavior. That’s why gyms will always have membership contracts. They are quite sneaky. 🙂

So, how do you go about trimming unused memberships, especially if you are locked in?

This is the latest edition of our new series called Money Leaks.

How Often Do You Use It?

The key to determining if you use your membership is by keeping a log. Keep a journal of how often you use the service, whether it’s a Costco membership or a gym membership, and decide whether you could save money by paying each time (if that’s an option). Let’s say I go to the Costco once a week to buy groceries and the membership costs me $50 a year – or less than $1 a week. If I can save more than a dollar per trip over my grocery store, then the membership is worth it.

The easiest one to calculate is the gym. If I pay $30 a month for my gym (it’s a local county gym that’s partially subsidized by property taxes – so yes, it’s quite affordable) and I go once a week, I’m paying about $6-7 a visit. If I go twice, that’s $3-4. If I visit three times, it’s just $2 a trip. So after I account for summers (when I go less frequently), I can decide whether or not it’s worth it for me to continue being a member.

Investigate Early Termination

This tip is a two-parter. First, before you ever sign a contract, figure out what the early termination fees may be. Some contracts don’t have one, they simply won’t let you cancel it (which makes the early termination fee the remaining balance of the contract). Be careful about how much you commit yourself to, especially if you don’t know how often you’ll use it.

Second, decide if canceling the contract early will end up saving you money. Let’s say you have 24 months left on a $50 a month contract with a $150 termination fee. If you feel that the membership isn’t worth it, it’s only costing you three months of bills to cancel the contract. $150 seems like a lot of money, and it is, but it’s cheap compared to continuing to pay $50 a month for two more years on something you won’t use (which, by the way, is $1200 in payments).

Finally, if you can’t cancel it, make sure it isn’t on auto-renew. 🙂

So, take a look at some of your memberships and decide whether they are all still worth it.

{ 6 comments, please add your thoughts now! }

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6 Responses to “Money Leaks: Canceling Unused Memberships”

  1. cubiclegeoff says:

    Netflix would have counted for this before streaming. Now with streaming, we definitely get our money’s worth.

  2. WRXTuan says:

    I actually bought my pre-paid 2 year gym membership from Costco. It roughly comes out to $12.50 a month. Since I go to the gym everyday but Thursdays, I think I’ve done well.

  3. Jason says:

    My friend just calls his credit card company every year or so and says that his card got lost. Then he waits to see who calls/emails and re-selects the services that he still wants to sign up for.

  4. Shirley says:

    I bought a one year pre-paid membership and found that I didn’t use it as I had expected I would. However I was able to transfer ownership of it to my daughter because it was within the first 30 days and she lived in the same household. That one worked out fine. 😉

  5. skylog says:

    i suppose, like most people, i did have a problem here and there with this in the past. that said, i have been much better about this after learning from prior mistakes. i simply will not sign up for something that i will not use enough to justify its cost.

  6. Shirley says:

    Though not exactly a membership, this post made me remember how in the early 1950s my grandmother insisted on paying her life insurance monthly. She said she didn’t want to pay for more than she used. 😉

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