Dave Ramsey Warns That New Costco Shoppers Make These Rookie Mistakes. Can You Avoid Them?

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Don’t make these errors when you go to Costco. 

Costco can be a great place to shop because the low prices the warehouse club offers may enable you to keep more money in your bank account. Unfortunately, if you aren’t a smart Costco shopper, your efforts to save could backfire and perhaps even lead to you running up big credit card bills on unnecessary purchases.

Finance expert Dave Ramsey has identified two “rookie mistakes” that new Costco shoppers often make. Here’s what those errors are, along with some tips on how you can avoid making them.

1. Overbuying to avoid going back

The first mistake Ramsey identified is one that can lead to overspending. As Ramsey explained, this rookie error involves “stocking up on things to avoid making a return trip.” It’s especially likely to be an issue if you don’t live close to a Costco location.

The reality is, it can seem like when you go out of your way to make a special visit to Costco, that you should just load up your cart with everything you could conceivably need for the weeks or even months ahead. But, this can backfire if you end up not having time to use up everything you purchased before it goes bad.

To avoid this error, Ramsey suggests steering clear of purchases that could go bad quickly, such as fruits, vegetables, dairy products, condiments, and spices.

You can also think about your consumption habits to make sure you buy only enough to get you through until your next Costco trip. If you want to go to Costco every two months, for example, then assess how much of a particular item your family actually uses over an eight-week period and don’t purchase more than that amount.

2. Trying too hard to maximize your membership in a way that backfires

The second rookie mistake Ramsey identified involves buying things at Costco that you shouldn’t just to try to make the most of your membership. Specifically, he warns against “doing all your grocery shopping at the warehouse store so you ‘get your money’s worth’ out of your membership.”

This can be a big mistake many novices make, because not everything actually is cheaper at Costco. And it doesn’t help you reduce your spending costs — or cover your membership fee — if you’re buying items at the warehouse club you could have spent less on at the grocery store, the drugstore, or online.

Rather than assuming you’ll always get the best bargains at Costco, Ramsey suggests figuring out the unit price of everything you buy. You’d do that by dividing the total item cost by the number of items in the package or the unit weight. This gives you a generic number you can use to compare the larger size products you’ buy at Costco with smaller ones found elsewhere.

The good news is, both of these rookie errors are easy to avoid now that you know about them. Heed Ramsey’s advice and don’t make these mistakes that undermine your efforts to save money with your Costco membership.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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