I was at Costco recently and was told it was time to renew my yearly membership. I obliged, having a cart of things I needed to purchase, but that $50 membership fee really shocks a frugal person like me.The renewal got me thinking: is my Costco membership worth $50 dollars? Are most people's memberships? I decided to do the math.
First, the rules:
- I only considered the kinds of things I regularly buy from Costco. Although it's probably true that you can get a load of laminate flooring at a better price than a flooring store, this is not something I can count on buying anytime soon.
- I didn't count the kinds of things I rarely buy there either, like ketchup and toilet paper, since Costco makes you buy enough to last for years.
- I compared the prices at Costco to the cheapest prices I could find elsewhere. If I can buy something for less outside of Costco, I will.
- I also did just rough estimates of how often I buy the things I do. For this exercise, I'm too lazy to go back through my purchases from a whole year.
- Finally, we are a family of 4, including a toddler and a baby.
Regular purchases made at Costco versus somewhere else:
Milk: 2 gallons at $5.16 vs 1 gallon at $2.98 at grocery store. Savings of $.40 per gallon, about $60 per year.
Formula: 2 cans at $17 vs 1 can at $11 at Wal-Mart. Savings of $2.50 per can, about $180 per year.
Diapers: 200 diapers for $35 vs $19 for 92 diapers at Wal-Mart. Savings of $.03 per diaper, about $72 per year.
Gas: $2.88 per gallon vs $2.95 per gallon at Sinclair or Maverik. Savings of $.07 per gallon, about $60 per year. (I want to note here that we can easily get gas from Costco without going out of our way. If that weren't the case, I'm not sure it would make a real difference.)
Baby Wipes: 8 packages(88 count) at $15.49 vs 1 package at $2 at Wal-Mart. Savings of $.07 per package, about $1 per year. (This one sort of made me laugh, but a dollar's a dollar, right?)
Total Annual Savings: $373
Less membership fee: -$50
Net Savings: $323
Wow! What a difference one store can make! I knew there was a reason I loved Costco other than their $1.50 hot dog/soda combo.
Obviously, we get the majority of our savings from the fact that we have a baby. But even if we bought just milk and gas alone, we would still save much more than the cost of the membership. As our family grows, I anticipate buying more of our groceries from there as well, taking advantage of the bulk quantities. And although I didn't count big ticket items, over time, the savings would really add up. I guess we are destined to be long-time (satisfied) Costco customers.
What do you all think?
4 comments:
Wow, thanks for doin' the math! I just recently became a Costco member after doing only a little math in my head with the formula & diapers. I have been curious about how much I really do save by going to Costco. Now, the tricky part is...do you have enough self control to stick to what you & your family need while you're there. lol. my dad jokes about going in for milk and coming out with big screen TV's. so if i were a big impulse buyer i might think twice about getting a membership. hehe.
oh matt and i LOVE costco. We're addicts. if we're bored, we go to costco and 'play pretend' what all we'd buy if we had endless amounts of money. or how much it would cost you to buy one of everything in the store. we haven't settled on an answer yet. we're such kids. haha.
Hi there - I'm Pam Walton, first time blogger on this blog. I heard about it from a friend of a friend.
We love Costco too. We have an Executive Membership which costs $100 a year, but we get somewhere between 1-2% back on all our Costco purchases. We also have a Costco American Express and they give you 1-3% back for Costco and non-Costco purchases. We spend a lot of money at Costco so we usually end up getting several hundred dollars back a year in the form of a Costco check (which can be turned in for cash). Pretty cool. But I must admit that I make a shopping list before entering the doors or I end up spending way too much money!
I know this post is a little farther down the blog but I wanted to say thanks for putting the info out there. I know I save a lot more than that with the things I buy at Costco, especially when they have coupons for things like Fruit by the Foot which are $2.50 for a 6 pack at the grocers vs. $7.50 (coupon price) for a box of 42! I also have the Costco Amex which easily pays for the membership with all my cashback - just be sure to pay that balance IN FULL every month:) I try to explain this to my friends but they never believe me.
Love the Blog, Keep it up!
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