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It costs a minimum of $60 per year for a Costco membership. Read on for a list of questions to answer before joining this year.
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Costco is a warehouse club beloved by many. Not only are its prices affordable, but it also has products that people really enjoy buying, including its famous $1.50 hot dog and soda combo and its line of Kirkland Signature branded products.
If you aren’t already a Costco member, you may be thinking about becoming one in 2024 so you can take advantage of all that this warehouse club offers. But before you move forward, there are a few key questions to answer first.
1. Is there a warehouse club near you?
Costco has 871 locations across the U.S., but that doesn’t necessarily mean everyone has a warehouse club close to them. Be sure to use the Warehouse Locator to find out where your closest Costco is before joining.
Research shows that the average consumer only travels about eight minutes from home to their grocery store. So it may be too much of a pain to go to Costco often enough to justify a membership if your nearest store is 45 minutes away.
2. Will you shop at Costco enough to justify the membership fee?
The cheapest Costco membership will run you $60 annually, so you’d need to shop at the warehouse club enough to save at least that much per year to break even on your membership.
This breaks down to about $5 per month for the cost of membership. If you shop at Costco every month or get gas there on a monthly basis and save $5 per trip on fuel or other products, then joining would be worth it.
It’s pretty easy to save $5 a month at Costco. Filling up your gas tank there about twice a month would do it, while switching to buying just your bread, eggs, and milk at Costco alone could save you more than $5 a month compared with other grocery stores like Stop & Shop.
3. Will you use up bulk purchases before they go bad?
Costco’s big savings come from buying in bulk. Unfortunately, if you can’t use up the items before they go bad, you won’t really end up saving money; you’ll be tossing some of the items you purchased in the trash.
You’re more likely to be able to use up bulk Costco purchases if you have a large family. If you don’t, then unless you can share items with friends or are primarily interested in buying non-perishable items with a long shelf life, then a Costco membership may not make sense.
4. Do you prefer to shop with manufacturer coupons?
If you like to keep your credit card bills down by using manufacturer coupons, joining Costco isn’t the right move. The warehouse club does not accept them.
There’s no sense in joining the warehouse club if you buy most of your household items with coupons that help bring prices down to be at or below what Costco is charging. For example, combining manufacturer coupons and drug store deals can often make it possible to get items like free toothpaste at drug stores. Costco isn’t going to beat $0.
5. Are you OK with in-store shopping or do you prefer online only?
Finally, think about whether you’re going to shop in person most of the time. Costco’s online prices are higher, so you won’t be able to benefit from the best deals if you like to order your stuff over the Internet.
Plus, Costco allows non-members to shop online for a 5% surcharge. Unless the surcharge you pay ends up adding up to more than the $60 membership (which would happen only after you spent at least $1,200 a year at Costco.com), you may be better off just paying it rather than becoming a member if you won’t be setting foot in your local warehouse store.
By considering these factors, you can decide if joining Costco makes sense for your personal finances. If you’ll be visiting the club often, it’s close to you, you don’t regularly clip coupons, and you’ll save at least $5 a month, then join. Otherwise, pass up your Costco membership and look for other ways to save on household items (like using those coupons!).
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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.
