Which do you put at ease? Your brain or your wallet

There are two main ways to buy things: individual items, or a subscription. We’re talking about any type of membership, or season passes.

When you sessions individually, you almost always spend less money. This puts your wallet at ease. When you buy a membership, you usually overpay. But, it puts your mind at ease knowing you can go whenever you want.

Let’s think about a gym membership, first.

To keep the numbers simple, imagine your gym membership costs $100/month. You tend to go to the gym once or twice a week, so about 8 times per month. It only costs $10 for a day pass to the gym. So which do you buy? Economic rationality says you should buy each day individually. You would save an average of $20/month.

But, there are hidden mental benefits to having a membership. The barrier to entry becomes lower. You don’t have to reach for your wallet and pay every time you walk in the door. You just get to punch in your member ID number and walk through. You also feel like you’re a part of the club. You’re a member at this gym, thus you should probably go. You can still have a sense of belonging if you buy individual sessions, but it just doesn’t feel the same as being “a member.”

Let’s look at another example: a season pass to a ski mountain. Again, to keep things simple, imagine a season pass costs $500 and individual day passes cost $50. You usually only go 6-8 times per season, but who knows, maybe if the snow is good, you’d go more.

So which do you buy? It’s a tougher decision than it seems at face value. Here’s a tricky situation: you are heading up to ski for the weekend and you have to leave at noon on Sunday. You ski on Saturday and have a great time. You look at prices for a half day lift ticket and see that if you wanted to ski in the morning on Sunday you would have to pay $45.

“$45 for just two hours?” you think to yourself. That’s not worth it. So instead of skiing Sunday, you eat breakfast, hang in the lodge and drive back home. Your friends send you texts saying the conditions were incredible and they only stayed until noon anyways because everyone got so tired.

This is the crux of the problem in my mind: what do you do when an individual pass might not be worth face value?

What if you only have 15 minutes to workout? Would you pay $10 to go to the gym for 15 minutes. Probably not. You’d convince yourself that you’ll exercise at home. Then, you probably wouldn’t end up exercising at all.

Would you pay $45 if you could only ski a few runs on Sunday morning? Probably not, but you would have enjoyed that time.

A full session at the gym or a full day skiing is undoubtedly worth the individual price, but what about the edge cases? The few minutes here and there that you could use, but you don’t want to buy a full ticket at that price.

In my experience, when you have a subscription, you find a way to use it. When you have to buy individually, you find a way to avoid it.

There is no right or wrong answer here. It all depends on who you are, what behaviors you want to encourage and how much money you have.

In general, when you want to encourage a behavior, you should lower the barriers to performing it. So next time you decide you want to attend more yoga classes, maybe you should get a membership, or buy a 10-class punch card. It’ll make it easier when you’re on the edge and not sure if it’s worth going.