Is a Costco Membership Worth it?
2014 is the first year we’ve purchased a Costco membership. I’ve been skeptical of membership stores like Costco, or Sam’s Club, because I always wonder if I could really save money, or if I would just end up buying a bunch of stuff I don’t need. And because even getting in the door requires a membership, I haven't seen the benefits....until now.
Read below to see how much we will save on organic eggs this year at Costco.
While skeptical, there was always part of me that wanted to try it out to see if I could find a way to make it work for our family. So, this experiment is exactly that… what works for our family. I’m hoping that you can adapt this into your family and household situation.
Since we’ve started budgeting as a family nearly four years ago, we’ve become pretty disciplined in creating and sticking to a grocery list. Aside from splurging here and there on Ben and Jerry's (my weakness) we stay away from what's not on our list.
We pounced on the Costco membership when Kelsey scored a living social deal for half price followed by posting about the deal on Facebook, where we earned the rest of our money back within a few hours.
But, let's assume the goal was to convince you that you can earn your money back by buying everyday grocery items at Costco... We have the Gold Star Membership which costs $55 per year. There is also an Executive Membership for $110 per year. The difference is that with the Costco Executive Membership you earn 2% on MOST purchases throughout the year (up to $750 back). Likely worth it for us next year. Let's look at the numbers...
Costco Membership vs. Grocery Store
A few disclaimers about the data before we get started.
- I looked at things we actually buy at the grocery store. Trying to match brands as best as possible.
- I stayed away from the home goods section, although I'm thinking of buying some light bulbs in bulk there because they are even cheaper than buying them from Amazon! If we happen to be in the market for a big ticket item, I'll price check Costco against other stores before purchasing.
- We buy some organic products, some not. We try to eat healthy 2/3 meals per day, and tend to eat less healthy for dinner... hence the coca-cola below.
- We buy our meat from a regional farm that delivers locally, which is why you don't see any meat comparison.
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Saving the Most Money at Costco
After our first trip to Costco I knew we could make our money back as long as we bought one item there... organic eggs. Because, I make eggs for Rooney and I every day and occasionally, Kelsey wants some as well. At minimum, I'm scrambling four eggs a day, if not five or six.
Occasionally, we'll substitute a donut, muffin, or banana for breakfast, but the majority of time we're eating organic eggs for breakfast. The math behind the eggs (conservative calculation): 4 eggs x 5 days per week= 20 eggs per week. 20 x 52 = 1,040 eggs per year. 1,040 / 12 = 86.66 dozen per year. 86.66 x $0.59 savings per dozen = $51.33 saved per year at Costco vs. our local grocery store.
And that's not to mention that the grocery store's brand of organic eggs was JUST THIS WEEK reduced $1 per dozen after Kelsey emailed and complained (bless her heart) that the price was $0.50 more per dozen than the Hy-Vee less than five miles away! I was surprised when I was doing my research because the savings would have been double over a year's time on eggs alone.
Here's some other yearly savings we'll rack up by shopping at Costco.
- Organic Strawberries: 2 lb. package purchased every other week = $186.68
- Dunkin' Donuts Original Blend Coffee: 2 lb. bag purchased every other month = $35.64
- Organic Baby Spinach: 1 lb. package purchased every other week= $65
- Grand total saved per year on eggs, organic strawberries, coffee, and baby spinach = $338.65
Deciding to buy at Costco or Grocery Store
There are a lot of factors to consider when it comes to actually saving money grocery shopping. The store's goal is to get you go buy as much as possible, whether you need it or not, so here's a list of factors that should be considered before grocery shopping at Costco or the grocery store.
- Distance from home or work: It doesn't make much sense to drive an extra 20 miles to save $0.50 with a coupon. Make sure it's worth the trip.
- Price per unit: The data above convinces me that it's worth a trip out of my way to save money on products I would buy at our grocery store anyway. The price per unit helps make sure I'm comparing apples to apples... well... I didn't compare apples, but you get the point.
- Local, Regional, or National: Sometimes it's worth it to buy local. Local businesses can be great, and if the service is spectacular, it may be worthwhile to pay a little more at your local supermarket.
- Buying in bulk: For things that won't expire and that you have room to store, like most toiletries, it may be worth it to shop at Costco once a month, vs. paying the extra weekly at the grocery store.
- Coupons: Some stores may offer enticing coupons. But I've found that coupons are nearly non-existent if you are trying to eat healthy. And the amount of time spent scanning coupons isn't necessarily worth it.
- Rewards: Hy-Vee (a local grocery store chain) offers a fuel saver program. Certain items will be tagged with fuel savings. If you buy them, you can rack up 3, 5, or even 10 cents off per gallon of gas on tagged items. The only way this works is to have patience. The items we buy on a weekly basis are rarely on the fuel saver program. But, when they are, it is a nice reward.
- Product availability: Costco seems to work similar to Trader Joe's in that we're never really sure they are going to have our favorite items in stock. Example: When doing this case study, Costco didn't have one of Rooney's favorite snacks (Pirate's Booty). Yarg!!!!
- Produce: When I was checking prices at Costco, they also didn't have organic strawberries, which is one of the main things we go for. We eat a ton of strawberries, so we went with the regular strawberries this time. However, you need to evaluate your situation to make sure you can eat the enormous quantity of produce that you get at Costco (don't wan to be wasteful).
- Throwing an adult party: I've heard that you can get a great deal on alcohol at Costco. We typically don't have alcohol in our house, but I've heard that prices are good if you needed to stock up.
- Gas/Fuel: You save $0.03 per gallon off gas at Costco. A nice perk, but probably not worth the drive across town. Fill up while you're there but don't go out of your way. If you have a 20 gallon tank, you'll only save $0.60 per fill up.
My initial thoughts were that we could save the most money on paper goods (Kleenex, paper towels, toilet paper, napkins), when in fact that proved to be where the least savings occurred at Costco. Getting the most bang for your buck at Costco seems to come down to produce, eggs, and coffee for us.
The key to making Costco work for you and your family comes down to making a list, comparing prices, and shopping accordingly. And this all depends on the location of the Costco nearest to you and making the most of it when you are in the area. It's likely not a one-stop-shop for everything.
How do you shop at Costco? How do you make the most of your Costco membership?