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Transcript
- Lucas: So Luna, I was looking at the latest CPI data from June, and headline inflation is actually cooling — the index ticked down to 332.6 from 333.98 the month before. But here's the thing: the services side of the basket is still running hot, and nowhere is that more visible than in what we're paying to stay fit. Luna: You mean gym memberships? Because I just got a notice from my gym that my annual dues are going up another 7 percent next month, and I was not thrilled. Lucas: Exactly that. And it's not just your gym. Since 2019, the average monthly gym membership in the U.S. has gone from around 41 dollars to nearly 58 — that's a 40 percent jump. Meanwhile, core CPI over the same period is up maybe 23 percent. So the cost of getting fit has been outpacing general inflation by a significant margin. Luna: Forty percent is huge. Why are gyms getting away with that when the overall inflation rate is actually coming down? Lucas: A lot of it is structural. Gyms have high fixed costs — real estate, equipment, utilities, insurance — and those costs have been sticky. But there's also a behavioral piece: once someone signs up, they tend to stay, even if they're not going. The fitness industry knows that the average member overestimates how often they'll actually use the gym. Luna: So they're basically pricing in our optimism. I mean, I've been paying for a gym I barely visited for two years — I finally cancelled last month, but it took me forever to pull the trigger. Lucas: Right, and that inertia is exactly what makes gym pricing so interesting. It's not like groceries where you see the price every week. A membership is an annual or monthly commitment that just auto-renews, so the pain is spread out and easy to ignore. Until you actually look at the numbers. Luna: And the numbers right now are pretty stark. I saw a stat that boutique fitness classes — think spin, barre, HIIT — now average 30 to 40 dollars per session. That's more than a lot of people's monthly streaming budget. Lucas: It's a different tier of pricing altogether. And what's interesting is that the big-box gyms are actually the value play now. Planet Fitness has held its base membership at 10 dollars a month for years, but even they've been nudging up their premium tiers and adding fees. The real growth in the industry is happening at the high end — where people are paying for community, coaching, and the feeling of an exclusive experience. Luna: But is that worth the extra 12 percent year-over-year increase we're seeing in that segment? I mean, the S&P 500 is up 4 percent in a week — but that doesn't help you negotiate your monthly dues. Lucas: That's a great point, and it ties to a broader theme we've been circling all season: inflation has been eating away at specific line items, and fitness is one of the most stubborn. Even as the 10-year breakeven inflation rate drops to 2.23 percent, the services you're actually buying — health clubs, personal training, yoga studios — are running at double that. Luna: So what can the average person actually do about it? Besides just cancel and start doing push-ups at home? Lucas: Well, there are a few angles. First, negotiate. A lot of gyms will match a competitor's price or offer a discount if you ask. Second, look at annual plans — they often cut the effective monthly cost by 15 to 20 percent. And third, think about utilization. If you're paying 50 dollars a month and going twice a week, that's about six bucks a visit — that's actually not bad. But if you're going once a month, you're paying 50 dollars for a single workout. Luna: That framing makes it a lot clearer. I've been guilty of the once a month visit, and honestly, it's hard to justify. Lucas: And that's the kind of decision we're always trying to help people think through on this show. If our conversations have helped you look at a cost differently, or maybe saved you a few bucks on a subscription you didn't need, that's the spirit behind what we do. And if you ever feel like supporting the show so it stays free and ad-free, you can do that at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small way to keep these conversations going, if that's your thing. No pressure, but it's appreciated. Lucas: Anyway, back to the gym math. One thing I found really interesting is how the industry has shifted since the pandemic. Before 2020, there was a big push toward these massive, low-cost gyms with tons of equipment. But now, the growth is in smaller, specialized studios — think OrangeTheory, Barry's, F45. Those places run at 80 to 90 percent gross margins on their classes because the marginal cost of an extra participant is almost zero. Luna: So they're basically selling scarcity and a sense of accomplishment. I mean, the class is full, you get a shout-out from the instructor, it's a whole experience. But that experience is also costing people 200 to 300 dollars a month if they go a few times a week. Lucas: Exactly. And the real question is whether that experience is actually delivering value or just tapping into a fear of missing out. The data suggests that people who use boutique classes are more consistent with their workouts — the social aspect helps. But you can get that for a fraction of the cost with a friend and a free workout video. Luna: That's a good point. I've been doing a lot of at-home workouts lately, and honestly, they're just as effective for me as the spin classes I used to pay 35 bucks for. Lucas: And that's the kind of substitution that makes a real difference over a year. If you cut that 200 dollars a month to 50 dollars for a cheaper gym, you're saving 1,800 dollars annually. That's real money that can go toward investments or paying down debt. Luna: So the takeaway isn't 'cancel all your memberships' — it's 'make sure you're actually getting what you pay for.' Lucas: Exactly. And that's the lens we should all use as inflation cools but service prices stay sticky. The CPI headline number might be moderating, but the things that hit our wallets daily — like fitness — are still rising at double the rate of overall inflation. Understanding that is the first step to protecting your purchasing power. Luna: And if you're listening and you're like 'I'm paying for a gym I never use,' maybe it's time to cancel — or at least do the math like we just did. Lucas: Yeah, and if you do decide to switch, you can often find better deals. A lot of gyms are running promotions for new members right now, especially as we head into the fall. So it's a good time to shop around. Luna: And maybe you can even get a friend to join with you — that makes it harder to skip, and it's more fun. Lucas: That's a smart tip. The social aspect is actually a huge driver of consistency, and it's free. So there's your practical takeaway: check your utilization, negotiate if you can, and consider a cheaper alternative if you're not going enough to justify the cost. Your wallet — and your future self — will thank you. Luna: Well said. Next time we're talking about something, I might actually be in the gym instead of in the studio. Lucas: And that's a win. Thanks for listening, everyone. We'll be back next time with another angle on how inflation is quietly eating away at your money.