My Great Costco Experiment! Will It Save You Money

Here’s my story about why I joined Costco and what shopping there is like. First, here’s our disclosure:

Clark Howard Made Me Take The Leap

I’ve been tuning in to consumer advocate guru Clark Howard for over twenty years. He has five main loves in life: Roth IRAs, Vanguard, Fidelity, Charles Schwab, and . . . Costco. In my twenties, Clark’s advice led me to open a Roth IRA and nudged me into the world of John C. Bogle and low-cost index funds. But believe it or not, it took me over twenty years to finally jump on the Costco bandwagon.

Many of you reading this post are asking, “What took you so long?” With how much Clark Howard talks about Costco, it’s surprising that I did not get a membership sooner. Getting stuck in a routine is easy, but the ever-increasing prices at the grocery store helped me break my habit.

After 20 years, I finally have a membership at one of the biggest retailers in the world, behind only Amazon and Walmart. I want to emphasize that I am not a Costco affiliate. Instead, I want to share my experience with Costco if you are debating if you should join.

Costco Scouting Mission

Before deciding to join, I wanted to see the products and pricing for myself. I do all of the grocery shopping and meal prep for the family, so I know the price of food. I was sold almost the second I walked into Costco.

Buying in bulk for items I buy regularly at the store will save me a lot of money. Not everything will pan out, but $11.50 for a 72-count box of Eggo Waffles is a fantastic deal if you have kids. Then there was the amazing deal of $9.99 for a 40oz bag of roasted almonds. But what pulled me over the finish line was the bakery goods.

The price for bakery items at the grocery store has gone through the roof. A 4-pack of freshly baked ciabatta rolls is now $4.25. That is almost $1.06 a roll. That’s ridiculous! I can get a 12-pack of the same rolls at Costco for $5.99. That is $0.50/per roll. That is a 50% difference in price!

I decided to give Costco a try and went to the membership desk. You can only shop in stores with a membership card, similar to how you need an Amazon Prime membership to get free 2-day delivery. The difference is that you can still shop at Amazon without a Prime membership, but you can’t shop inside Costco without one.

What Costco Membership Should I Get?

There are two primary Costco membership levels: Gold Star and Executive membership. They also offer a business membership if you run a business.

The Gold Star membership is all you need to shop in person at Costco and costs $60 per year. On the other hand, Executive membership is twice the cost at $120 per year, but it allows members to earn 2% back on qualifying purchases. The Executive membership also offers additional benefits and discounts on many Costco services.

As a first-time member, I leaned toward signing up for the Gold Star membership. The $60 fee seemed reasonable, as I wasn’t sure how much grocery shopping I would do at Costco. I thought I could upgrade to the Executive membership later if it became a better option. This plan seemed logical until membership services made me an offer I couldn’t refuse.

By signing up for an Executive membership, I would receive a $40 gift card and 2% cashback on purchases. The best part is you don’t need to open a credit card to receive the 2% cashback. Costco will send a check for the 2% cashback a few months before the membership renewal date. If the check is less than $60, I can have Costco reimburse me the $60 Executive membership fee and apply it to the Gold Star membership for the following year.

I couldn’t refuse that offer. This is the best risk-free trial available. Many companies offer a 30-day, 60-day, or 90-day trial, but Costco offers a 12-month money-back trial of the $60 upgrade for the Executive membership. Normally, I would be skeptical, but Clark Howard speaks so highly of Costco that I believe this is legitimate.

Now, I am a proud new parent of a Costco Executive membership. Let the shopping begin!

Warning! Costco Only Accepts Visa

Costco only accepts Visa credit cards. If you don’t have a Visa card, you may need to apply for a Costco Visa card.

It’s also important to note that any cashback rewards you receive from Costco’s Visa credit card are separate from the 2% cashback you may earn from the Executive membership. The 2% cashback from the Executive membership doesn’t require a credit card. Costco will mail you a check yearly for the cashback you earn as an Executive member.

What’s It Like Shopping At Costco?

Let me start by saying that I will try to avoid shopping at Costco on the weekends. When I signed up for a membership, it was on a Saturday, and the lines to check out stretched halfway to the back of the massive store. Right then and there, I decided that my trips would be on weekday evenings to avoid the crowds.

My first Costco run was on a Monday at 5:30 p.m. No crowds or lines made it a perfect time to shop.

I had a great time shopping at Costco, but I can see how easy it would be to overspend if you’re not careful. It’s difficult to resist buying in bulk. One minute, you grab 8 pounds of pasta, and before you know it, you have a 50-pound bag of flour in your cart! To avoid these temptations, I tried to stick to items I regularly buy at the grocery store.

Speaking of temptation, I could not help but check out the prices at their food court. The food and prices will make your mouth water: a hot dog and drink combo for $1.50, a mango smoothie for $3, or a massive slice of pizza for $1.99. The best part is these are just a few options available at the food court. There are many more affordable options to choose from.

Another surprising aspect of the shopping experience was the wide range of non-food items they sell, including appliances, clothes, and furniture. Almost half of the store is dedicated to these items.

Overall, it was a great shopping experience. Although the store was big, it did not feel overwhelming. It was well-organized and easy to navigate.

Will I Save Money At Costco?

I spent about $190 on 16 items, which averages $12 per item. At first glance, that might seem pricey, but it’s not so bad when you compare it to grocery store prices.

For instance, I scored a 10 lb bag of Krusteaz pancake mix for $7.99, which would have set me back nearly $14 at the grocery store. I also got 8 lbs of Barilla penne pasta for $10.49, which would have been closer to $13 at the grocery store. These two purchases alone saved me $9.

My Purchases

Here’s a complete list of all the items I bought at Costco and how much the equivalent amount of an item would have cost me at the grocery store. For example, Costco sells a 64-count box of Nutri-Grain bars for $16.99. To purchase the same item at my grocery store, I would need to buy two 32-count boxes for $11.99 each, for a total of $23.98.

I saved $100 by shopping at Costco compared to what I would have paid at the grocery store for the same products and quantities. Most of the items I bought will last me months. Please don’t judge me! I know there are a lot of snack bars, but they come in handy for school or as a quick pick-me-up between sporting events.

Since I already had meat and produce at home, I bought none during my first trip. I’m planning to focus more on those products next time. A quick look at the per lb pricing on meat during my first trip leads me to believe I will have similar results.

Costco Vs. Walmart

On average, I spend $1,100 monthly on groceries for my family of four. My main objective is to reduce my family’s monthly grocery bill to $700 or less, a level it was at before COVID and sky-high inflation. I feel confident I can accomplish this at Costco, but what about Walmart?

A quick price comparison tells me it will be difficult to beat Costco for the products I buy. For instance, a 64-count box of Nutri-Grain bars at Costco costs $16.99. At Walmart, I would need to buy two 32-count boxes for $11.92 each for $23.84. However, Walmart is still an excellent choice for price-conscious shoppers.

Not everyone wants to buy Nutri-Grain bars in bulk (please do not judge my food choices!). Walmart offers a greater variety of options in smaller quantities at better prices than the grocery store, and you do not need a membership to shop there. On the other hand, Costco is a wholesaler, so it’s all about buying in bulk, which can have disadvantages.

What Are Costco’s Disadvantages?

What makes Costco cheap can also be its biggest disadvantage.

Costco scores lower prices from suppliers by buying in bulk and then passes those savings on to customers. Buying in bulk means cheaper items but fewer choices in the store. Also, buying in bulk only makes sense if you will use it all. If not, it can be a big waste of money.

Costco also maintains small profit margins on its products to provide more savings to its customers. As such, it relies on membership fees for revenue to offset its small margins. As a result, shopping at Costco is not free. That can be a disadvantage if you do not shop there often enough to offset the membership cost with your savings.

Conclusion: Should You Become A Costco Member?

My decision to join Costco was driven by my desire to save on groceries and inspired by consumer advocate Clark Howard’s endorsement. When it came to signing up, I chose the Executive membership. By signing up for an Executive membership, I will receive 2% cash back on purchases and be eligible for reimbursement if my cashback is less than $60 over the course of the year,

On my first visit, I learned how much money I could save by purchasing items in bulk. However, be cautious, as it’s easy to overspend at Costco. Keep in mind that a good deal is only worthwhile if you’re going to use the products you buy. You might need soy sauce, but do you really need a 5-gallon jug that will expire before you can use it all?

While Costco may seem like a money-saver for me, it may not be for everyone. Buying in bulk lowers prices, but that leads to fewer options. You will not find the same variety at Costco as at your local grocery store. So, if variety is important to you, a Costco membership may not be worth it.

Costco will not replace all my grocery shopping, but I hope it will replace most of it. On my first trip, I focused on items we regularly buy and saved $100. For my next run, I will focus on meats that I can freeze.

I am confident I can take advantage of Costco’s low prices and bulk products to slash my grocery budget. Inflation has hit hard, but now I’m fighting back with a Costco membership.

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