So my wife decided she was no longer satisfied with her current gym. We have been paying $32.46 a month for her membership (includes taxes).
After talking her off the ledge of the local Lifetime Fitness and Yoga studios, we settled on a really nice 24 Hour Fitness that offered everything she needed, and was the same distance from our apartment as the old gym. Here's where you help me with math to see if I actually made a good decision with the membership fees.
Here were the two best options, I chose option B:
A) $120.07 extra upfront fees, 29.99 / month for first year, then $24.99/ month after that. Potentially, the $120 upfront could have been negotiated down.
B) 2-year membership for flat upfront payment of $519.59. This works out to $21.65 a month
In a direct comparison, option A would cost me $779.83 over 2 years, or $260.24 more than option B.
What I am unsure of how to calculate is the indirect cost in interest of not paying $429.51 (option B less first month of option A) towards my student loans this month. My loan balances, that I've been paying off high interest to low are as follows:
$7,405.83 @ %6.55
$9,208.38 @ %6.3
$14,999 @ %6.0
$968.62 @ %5.35
$5,229.61 @ %4.25
I've been paying off between 2 - 2.5k a month on top of regularly scheduled payments, although this amount should increase with the increase in my side hustle profits and a probable 1.5k/mo pay increase for my wife. All will be paid off by April 2014, one way or another.
Is the interest that will accumulate a negligible consideration, or is it significant? I don't really know the best way to go about figuring this out, especially with multiple interest rates on my loans. Did I actually get a good deal, or is the opportunity cost of having to pay more money upfront make option A and B about the same?
