I actually don't think your gym membership is too high. I think that is what we pay here in Minnesota (also Lifetime) and we get indoor and outdoor pools, water park, classes, cafe, restaurant, indoor and outdoor tennis, spa, salon, shop, locker rooms, child care, family locker room, climbing wall, racquetball, bball, etc. Also, that $120/month price is for the entire family. Having the gym membership has significantly improved our quality of life. It is what we do. Both my husband and I go every day and on the weekend we bring the kids. While we work out, they play basketball or soccer or in the 3 story maze in the child care center or do a craft or work on the iMacs. After our work out we all might go to the pool or play tennis together. Then, we hit the cafe for lunch before grabbing a shower (it is so much easier to shower the kids there....everyone gets their own stall and it goes so fast) and heading home. Really, we would pay a lot more to keep this in our life.
Having said that, our boys were a bit nervous the first couple of times as well. The child care center staff were great about letting us go in with them for 10 or 15 minutes to get them acclimated. We just decreased the amount of time until we could just drop them off and go. The first couple of times we only left them in there 10 minutes or so before taking them out. We stretched that out too and now we can leave them in there for an hour or so with no problems. They love it.
Good luck with your decision. Working out at the gym is sacred to me and not something I would give up with out a big fight.