# How To Calculate The Value Of An Annual Membership

Do you have an annual membership or pass to any local attractions?

Many families find annual memberships to be a great way to save money on favorite places or attractions.  They can be especially valuable for families.  We have young kids, so we have four different memberships that we take part in:

• Detroit Zoo
• The Henry Ford Museum
• City Park  (for the beach)
• Robot Garage

It’s a pretty well rounded group of attractions.  The first three are pretty self explanatory.  The last one is a local business that recently opened up that offers classes and drop-in opportunities where kids build with Lego, gears, wheels, pulleys, motors and all kinds of other nifty materials to create things that walk, roll, open, close and other cool things.

Figuring out whether to buy a membership is a multi-step process that involves asking a series of questions.

1. Did you like the attraction?
2. Do you see yourself or your family liking it as much after a few more visits?
3. Do you have time to fit this into your schedule?
4. Can you commit to going at least as many times as it takes to get to the break even point?
5. What is the break even point?

Making sure that the answers to the first four questions are all YES is very important, understanding that you might not know the exact answer to #4 without knowing #5.  Still, the first three questions will largely get you there.

But, say you do answer yes, and you want to know what your break even point is. That’s the important question of the day from a financial perspective.

Calculating The Break Even Point

The number you are looking for is the number of visits at which you need to hit to reach your break even point.

You’ll need to:

• Calculate the cost per individual visit
• Get the cost of the annual membership

Divide the annual cost by the individual cost and this will give you the break even point as far as the number of visits that you need to exceed for the membership to ‘pay for itself.’  When the number comes out as a fraction, you round up to the nearest whole number.  That’s the simple method and it works for most cases.

Sometimes, it gets a little more complicated, as you’ll see with our examples below.

Detroit Zoo

Per Visit Cost:
2 Adults @ \$14 each: \$28
2 Kids \$ \$10 each: \$20
Parking: \$5
Total: \$53

Family Membership Cost: \$79

In this case, \$79 / \$53 = 1.5
Round up, and you see that it takes 2 visits to break even.

We go at least 10-15 times per year so this is well worth it.

The Henry Ford:

Per Visit Cost:
2 Adults @ \$21 each: \$42
2 Kids @ \$15.75 each: \$31.50
Parking: \$6
Total: \$79.50

Family Membership Cost: \$160

In this case, \$160/\$79.50 =2.0
We don’t need to round up, so the number of visits to break even is 2.

We go here at least 6 times per year, so we’re more than happy to renew this.

City Park Membership (Beach)

Per Visit Cost (car entry fee): \$6

Annual Pass: \$30

This one is a very simple calculation in that we have to go 5 times to break even.

In all the years we’ve gone, every year but one we’ve gone at least or more times, and I think one year we missed it by one visit (it was a chilly summer and also right after one of our kids was born, if memory serves), but typically we meet this one without a problem.

Robot Garage

This one is a little more tricky because the benefits come in a couple of different areas.

Per Cost Visit Drop-In Play: \$8
Class Discounts:\$11
Camp Discounts: \$8

Annual Membership: \$99

In this case, we have to estimate three different areas:

We take our kids around six times per year, meaning that we get \$96 worth of drop-in visits.  Wow, we’re almost there!

Our son typically goes to 2 classes per year, and while the \$11 per class is an estimated savings, the \$22 is enough to definitely push us over the edge.

We also sent our son to a week long ‘camp’ and members get a small discount (note: it’s actually listed as more, but since they offer an early bird special to non-members only, the net benefit is what I list): \$8

So, for the \$99 membership, we offset with a savings of  around \$126.

Not great, but we do calculate that we’re at least breaking even.

Using Numbers To Make Decisions

With the information we have above, we can see exactly how we’re doing.  Putting together this analysis is easy and it’s also something you should do regularly.  You can use it not only to estimate up front if you think you’ll get value from the membership, but to see if you’re actually using it when it’s time to renew.

Say you loved the beach the one time you went and had every intention of going a whole bunch…on the day you signed up.  But, when you came back at the end of the year, you realized that you only went twice.  You’d know that renewing might not be your best option moving forward.

Annual memberships can be a great way to save money and create lots of great experiences for you and your family to enjoy.  Understanding just how they fit into your budget and how spending money can save you money in the long run is great knowledge to have.

Readers, do you have any annual memberships?  Do you sit down and do a cost benefit analysis to ensure that you’re ‘making back’ the cost of the actual membership?

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### 12 thoughts on “How To Calculate The Value Of An Annual Membership”

1. I don’t think I’ve ever paid for an annual membership. I’ve done gym payments month to month in the past but never a year up front. I like the benefits that certain establishments offer, but I don’t visit the zoo or concert halls enough to make it worth the money to be a member.
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2. We are members of one museum and one aquarium. We only have to go twice a year to break even on the cost of each, but we still like to support both of them (tax deductible, too!) even if we can’t make it more than once or twice a year. It’s a bit of splurge to hold memberships when we aren’t absolutely going to go and get our money’s worth every year, but I also consider it part of our charity budget to support the work they do.
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• Yes, the tax deduction actually makes it even more favorable, but I didn’t want to add that extra level of complexity in my calculations, plus some people might take the standard deduction and not get that benefit, so I chose to exclude it.

3. Good post topic!! One of my friends lives close to a popular county park where she likes to hike several times a week. These days, in addition to raising our property taxes substantially every year, the county gouges taxpayer to use their own parks. So she pays \$80 a year for the privilege. She probably gets her money’s worth because she’s so close to the place. But people who have to make a special trip across the city? Not so much.

When you’re at an attraction that offers annual memberships, you think “ohhh this is so neat! if i just had a membership i’d come here all the time!” But it never seems to work out that way. I bought a membership to the AZ Botanical Garden and then never went back even once the entire year.

If the idea is to “support” a public amenity, I’d rather give a donation than feel like I was bamboozled into buying something I couldn’t use, given the time constraints, traffic battles, and weather issues.

• Yes, once you stop using it, you don’t want to keep paying for the membership, but I think that first year is key in determining whether your motivation leads to results. In your case, with your Gardens, it didn’t. And that’s just fine, so long as you factor that in to your decision the following year.

4. I almost bought a car wash “membership” yesterday…..unlimited washes for \$20 a month. A single wash costs \$7, so I would have to wash the car 3 times a month to make it worth it. Sounds easy to do….but in reality I don’t wash my car that often – not because I’m trying to save money, I just don’t think of doing it that often. So….no unlimited washes for me.

• Yeah, even if you used it, then you’ll always see your car when it’s dirty after the membership finishes up, which of course they’d use to try to get you to extend it. No thanks!

5. We usually only make one family trip to the zoo per year, but I’m sure that the kids would love to go back more often. There is always something we don’t get to see and it can seem rushed at times. I didn’t realize that the expense it tax deductible. I am definitely going to run some numbers on a membership.
Harmony @ CreatingMyKaleidoscope recently posted..The One Thing I Want My Children To Know About Money

• Many times it is tax deductible if it’s supporting a non-profit organization or something along those lines. I think you just need to check on an individual basis. I’ve usually found it on an organization’s FAQ page.

6. This is such a great way to look at it and honestly, I’ve never considered it like this before. We do go to places, but it’s hardly more than once per year, but if we’re ever in a position where we do go more often, I’ll definitely remember your advice!

• It can definitely pay off, or it can waste money. The key is to make sure you do some numbers beforehand.

7. GREAT way to look at the cost of memberships! Now that our son is almost 2, we’re looking into memberships as well. I asked for a zoo membership for Christmas and we got it from grandparents. I love that it is something we will use without extra things cluttering up our house, making it VERY cost efficient too!
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