Always Do the Math

We recently joined a very nice local pool (near our home, at an area high school, Olympic-sized pool with a smaller, warm-water pool too, inside, etc.) We had been going there quite a bit over a two-week period (at $6.50 a pop for our family) and decided we'd take the plunge on a membership to save ourselves money. As we discussed the membership options (3 months, 6 months and 1 year), we discovered that their rates are not what most people would expect -- that the longer time periods always saved the member more money than the shorter periods. Here are their family, resident rates:

• Day pass (family of four) -- $6.50
• Three months -- $65
• Six months -- $132
• Year -- $250

I was initially looking at the comparison between six months and a year. Obviously, the annual fee saves money over two 6-month fees (saves $14), but was it enough for us to shell out $250 for something we didn't know we'd be using a few months from now?

Then my wife noticed that the three-month rate was actually better than the six-month fee (two 3-month memberships are $130, $2 cheaper than one 6-month membership.) And the 3-month rate was only $10 more than the annual fee (four 3-month memberships are $260.) So we went with the three-month membership. It was a better price than the 6-month option, only slightly worse than the annual fee, and gave us the flexibility we needed in case we didn't like the pool over time.

This experience reminded us that you always need to do the math to determine the best deal -- you can't assume anything (like that longer time periods are always better deals.)

BTW, we've now been going to the pool for three weeks and we would have spent just over $60 if we had been paying the daily pass rate -- so investing in the three-month membership has been (or will be soon) a good investment for us.

Comments

[Jordan]

"This experience reminded us that you always need to do the math to determine the best deal -- you can't assume anything (like that longer time periods are always better deals.)"

But don't forget to factor in the fact that the prices might have changed when it's time to renew in 3 months. If the price goes up (or down), that would significantly affect the analysis.

[lurker carl]

I wonder why the rate for three months is proportionally cheaper than six months? On a similar note, I noticed the same thing with canned tuna, buying smaller cans comes out cheaper than buying the large cans. So many people won't, or can't, do the math.

[Mike Hunt]

Indeed. Companies also gain on cash flow by having a pre paid year or multi year memberships so should be offering substantial discounts.

The math is very important.

On another note, have you ever tried to break down the nightly cost of your house instead of looking at it like monthly or annual payments? It can be eye-opening when you find out an upscale house is costing well north of $100 a night!

-Mike

[Martin]

I can't remember all the details but at Der Weinershnitzel, I noticed that the combo meals were actually more expensive than buying everything separately! I was surprised as I discovered this fact after I paid for my meal. I mentioned this to the staff, who then did the math herself and hung her head in shame when she realized I was right. She offered to return the difference but I was in a rush so, I let it go. Try doing the math at the fast food joints sometime. You might be surprised.

[Melanie]

I can relate. I am amazed at how some "bulk" deals aren't always the best. It's like when you go to Costco or buy some things in bulk. Make sure you do the math as sometimes it is cheaper to buy smaller packages at the grocery store!