Has Our Costco Membership Been Worth it?

I’ve heard from so many people growing up that having a warehouse club membership automatically meant you save money. My mom has been a Sam’s Club member for years and she’s saved money, especially when we were growing up in a family of four.

We currently have a Costco membership. We planned ahead before we paid for the membership, but I thought it would be useful to see if we really did save money with our Costco membership.

How is our Costco membership doing? Find out!
How is our Costco membership doing? Find out!

Costco Membership Costs

As you’re well aware, there are are fees to become a Costco member. They offer different memberships, each with their own fees and benefits.

  • Gold Star Member ship ($50/year): This membership allows you to purchase products for personal use at any Costco in the world. You also get an additional card for one member in your household included.
  • Business Membership ($50/year): In addition to the Gold Star membership benefits, you also purchase business products for use or resale and you can get to add 6 additional cardholders.
  • Executive Gold Star Membership ($100/year): Executive Members enjoy an annual 2% Reward on most Costco purchases, as well as additional values on member services, such as lower prices on check printing, payroll services and identity protection; an account bonus for money market and online investing accounts; free roadside assistance for vehicles covered through the auto insurance program; and extra travel benefits.

We decided to get the Executive Membership for our family. I’ll review the discounts and savings we have. I’ll also keep a running total of the membership’s value after each section where I have some numbers.

Costco Savings: -$100

Car Insurance Savings with Costco

We found a great discount with our Costco membership on our car insurance. Our previous policy with Progressive was $118/month. I shopped around for car insurance rates, trying to see if we could get something better.

Amerprise through Costco offered auto insurance coverage for $58/month. That saves us $60/month for an annual savings of $720.

I’ve also used their roadside assistance and didn’t have to pay anything, since that was included in our Executive membership.

Costco Savings: $620

Gasoline Discounts at Costco’s Gas Stations

I have noticed that Costco’s gasoline has been 12-15 cents cheaper a gallon then other gas stations around my area, which is a bit more expensive then the city’s  average. If I lived in a different part of town, the savings would drop to around 5-7 cents a gallon.

Since I live relatively near Costco, getting my gasoline there is a c0nvienent way to save money. I fill up about every 10-14 days, and my husband fills up just as frequently.  We have about 12 gallons for our cars’ gas tanks.

To keep it simple, I’ll calculate we fill up every two weeks and we get to Costco about 75% of the time for a total of 39 fill-ups between the two of us each year. I’ll say we save 13 cents a gallon. The annual savings comes out to $60.84.

Costco Savings: $680.84

Big Purchases and Warranty Savings

My husband purchased a 40″ LCD HDTV from Costco. It was $499 and with shipping, the total was $560. Best Buy has the model listed for $579.99, with a delivery cost of $70, for a total of $649.99.

It has a 2 year warranty with Costco. Best Buy has a 4 year warranty available for $100. To keep it fair, I’m using the deliver price to calculate savings of $89.99 .

Costco Savings: $770.83

Food and Bulk Item Savings

You may be surprised, but we haven’t saved a huge amount as we have in the other categories. We’re a family of two, so some bulk items aren’t good buys for us based on the amount we eat and our limited freezer space. We do buy our cold cuts of  roast beef and ham for lunch sandwiches.

We have saved money on paper goods like toilet paper and paper towels. We plan most of our purchases, so we don’t inadvertently spend too much, a complaint many families had with warehouse club shopping. i also want to point out some of Costco’s heat up and ready dinners are great for dinners where you invite a few friends over. their past and shrimp was phenomenal.

Rebate Check

Update: September 27, 2009 We just received our 2% Reward rebate check from Costco. It’s not huge, $34.87 , but getting cash back is always welcomed.

Costco Savings: $805.70

Run The Numbers Yourself on Warehouse Club Memberships

Even though the Costco Executive membership has saved us almost $800 in a year, you have to figure out for yourself and your family if warehouse membership will pay off. A candian blogger also took the time to see what Costco membeship benefits worked for them.

Your Take: How Do You Save Money with Your Warehouse Club?

If you’re a warehouse club member (Costco, Sam’s, BJ’s, or something else), what do you get and why? Has the membership paid off?

Photo Credit: reenwenvy08

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36 Responses to Has Our Costco Membership Been Worth it?

  1. We would be in the same situation as you in terms of the food savings. We are also a family of two and we probably have even less freezer space than you. We can hardly find room for a 4 pack of paper towels let alone a Costco pack (only God knows how big they are).

    In terms of the other stuff, I find it interesting that you can get that much in savings without even really shopping at the store. We have a Costco withing 10 miles so it’s not that convenient in terms of gas prices. Do you know if you can shop their car insurance rates without joining to see if it would be beneficial? I might check that out if it’s available.

    • We are fortunate that our apartment has an attached storage room for the paper goods, otherwise, we wouldn’t have space for them in the linen closet.

      I read that they have a deal with Ameriprise for a discount for members.

  2. Timely post for us. My wife and I were discussing whether we should get a costco membership this weekend, or if we shouldn’t since we’re a family of two. Your post helped bring to light some other savings we could get from having the membership, even though we don’t have kids.. thanks!

    • Thanks! Running the numbers was an interesting project this weekend and I was surprised by the amount. I’m glad this post came at he right time for you guys.

  3. Nice to see some of the non-food savings. I did a piece a couple years back comparing Sam’s to two local grocery chains (Kroger and Meijer) that might be of interest.

    As for non-food items, I know we’ve saved money at Costco on car tires and for prescriptions as well. I’ll be looking into travel packages through Costco for our anniversary in October. Hope to report substantial deals.

    Glad to have discovered your site (courtesy of @MattJabs).

  4. i haven’t truly compared prices with grocery stores in a while, but the last time i did, the price on kitty litter alone paid for my annual membership fee in short order. And the price hasn’t changed: $6.99 for a 44 lb box of clumping cat litter.

    Price of a gallon of milk: $2.05 is also excellent, as is that of bananas at .33 a pound.

    I just wish they carried organic produce.

    • Thanks for reminding me about pet care; I hadn’t considered it for the post. We’re going this week to shop, so I’ll look at the prices.

  5. Here’s the thing I love about Costco – you can get a great price without time consuming shopping. You know you are going to get a competitive price on your items. I think if you shop around you can typically match the prices, but who wants to do all the work?

    The biggest downside of a Costco membership is that I think people typically buy more then they need of an item and therefore use more than they need so their literally eat up a lot of the savings.

    Thanks for the informative post.

    • True, buying something because it’s cheap or on sale even if you don’t need it won’t automatically equate to savings.

      The stuff my wife posted about were either items we need (like car insurance) or items we were looking to purchase anyway (TV). The car insurance alone has been worth it several times over. The savings we have on other grocery items aren’t nearly as spectacular in our circumstance, but at this point, they’re simply additional savings.

      Of course, we do allow ourselves some impulse buys at Costco, just like we would at any grocery store, but we limit them. Since it seems like everything costs $10 at Costco, we do have to watch the number of impulse buys much more closely than we would at normal grocery stores.

  6. This is really interesting. My wife and I are a member of BJ’s, a wholesale club in Raleigh, but we haven’t taken full advantage of the many discounts that the club offers on insurance and the like. Need to do more research and see if we’re getting a good value out of our membership.

  7. As a college student I was able to get a card from my dad’s account for cheap, but it was hard to get too much good out of it. My dad on the other hand has a small business and saves TONS of money on paper products (he makes lenses and uses tissues on each one).

    We’ve been using Costco for YEARS now and it’s usually been a good investment!

  8. My wife and I have $100 membership. We have tried to make American express/costco charge/credit card our primary plastic. We try to gas up at costco as much as possible, with rebates, [trying to make the] membership free.

  9. I don’t buy much food at costco anymore, I find much better savings at local latin market. we buy mostly fresh veggies and meat and they have the best price.

    I go to costco to buy, milk, soy milk, paper towells, toillet paper, and detergent. I beleive the biggest saver is the cat litter. I buy 1 30ib box every month and save about $10 each time.

  10. We value our costco membership greatly. We buy milk there once a week and it is a .50 cents savings per gallon. 3 Gallons a week x a year is $78 in savings. So milk alone is worth our membership. We also only buy our gas there which is normally 5 cents cheaper per gallon. Brokedad and I go there once a week for a date. Our lunch costs less than $6 and we are full from all of the free samples. The best part is when its hot it is always around 65 degrees in there and plenty of stuff to look at.

  11. Hey ,
    We are in between in deciding to go or not to go for Costco membership .This post has been a gr8 help for me and my wife for sure .Another thing that I need to add to this is
    American Express Visa card .One of there VISA card comes only free if you have a Costoc membership otherwise you end up paying like 50$ or so for annual fee on it .Please check that … tooo
    Regards
    Sudeep

  12. Hi

    I have been a very satisfied costco member for the past 7 years and it has worked out great for us (Family of 3). Our savings haven’t been this dramatic, but we were able to recoup substantial amount of our membership fees each year. I really love their great quality of the products and generous return policy.

    KCDesi

  13. Thanks for the mention, I found another BIG savings, on BEER. Thanks to the Ontario Liquor control laws you cannot sell beer anywhere but in a beer store, but in Quebec (across the river) you can have sales and Costco sells beer CHEAP there.

    Will investigate other savings as well, good article, I will check into this stuff.

  14. I’ve been a member at Sam’s Club for a while (no costco’s near us), and we find that the membership is well worth it for medicines alone. You can literally buy a 5-pack of advil for the cost of one at the grocery store. We don’t use our membership that often, but a once-a-year stock up on supplies for the bathroom cabinet, as well as the occasional deal in preparing for a family party, and it’s well worth it.

  15. I use Sam’s Club and just the basic membership. I am a single person in my 30s but have enjoyed buying food in bulk at Sam’s. The only drawback is space. Like you, I have limited space in my freezer.

    I will be relocating in the near future into a house with two roommates and we were talking about using Sam’s for some bulk purchases. They have the same issue, limited freezer space which is leading me to do some research on a mini-freezer for items like beef, or bulk fruit (like blueberries) that we can freeze because the prices double in the winter.

    What I normally do on days when I go do my Sam’s Club shopping spree is buy what I need and then spend an hour splitting up the food into portions, some to put in the freezer right away, and others to prepare for the week. I make my own spagetti/pizza sauce and that’s a considerable savings over the grocery store brands.

    Side note, if you are a cheese lover, your best bet is at the warehouse, you can save up to 10 dollars for a couple pounds of cheese. I buy mozzerlla/cheddar for my homemade pizzas at about 7 to 8 dollars for 5 lbs. At the store, it’s about 7 to 8 dollars for 3 lbs. Sure, it’s a lot of cheese but if you can, you can freeze some of the cheese right away to make oven-baked items later (like lasange or pizza or mac’n’cheese). The taste is the same, the quality is the same, frozen or not.

  16. This is crazy……my wife and I were just talking about this last night!

    Your post was really helpful. We were of the mind that the membership wasn’t worth it….but I think we haven’t really taken advantage of it fully.

    Thanks for this post and also, thanks for including me in your roundup. It is a big honor for me.

  17. I wish we had a Costco here. They seem to have significantly better prices than Sam’s Club, which is the only warehouse club in this area.

  18. The boyfriend and I just moved to an area that actually has a Costco, so we’ve been discussing whether or not to get a membership – especially because he can get a discount membership through work. This post and all of the comments are invaluable! Thanks Laura, and everyone who commented, for your thoughts :)

  19. Great post. My wife and I have a Sam’s Membership. I find that we save money on many things, but you still have to be careful. We end up shopping at several different stores to get the things we need.

  20. Thanks for the comments! I’m glad the post has been helpful. I think if you use the different discounts besides just bulk items with food, you can come out ahead. I agree with everyone’s comments about shopping around for the best price. Costco has good prices, but their selection isn’t too much. I’d also consider using a price book.

  21. False savings.

    You supposedly saved $805.70, but $720 comes from auto insurance. If you shopped around (online comparison sites, geico, etc.), you would have found other companies with comparable savings. For some people Costco insurance is the lowest price, but for others it’s actually higher. In any case, the lowest rates don’t generally vary much more than $100 at best and you might have saved even more.

    One other thing, you paid $100 for the Executive membership instead of the $50 memberships. The only benefits you listed were the roadside assistance and the $34.87 check. If you’re not getting your car towed every year, you’re probably better off with just a regular membership. $15 for a tow is definitely worth it, but if it’s only very occasionally, then it’s like insurance and then you may consider other options like auto club,(As little as $12 each year per car), etc. Don’t forget that some new cars come with road service while under warranty and it’s just duplicate insurance.

    While Costco makes sense for some people, your actual savings are quite minimal and on some years, you might be paying extra membership fees for nothing.

    • Harry,

      To me savings is savings and I got the discount price by being a Costco member. We shop around for car insurance twice a year and this by far has been the cheapest. We just had to use the tow service this weekend and find that extra benefit pretty handy.

      But you do bring up a point, so my next Costco review I’m also including our food and goods savings.

  22. Imagine Costco has your home phone number, you cell phone number, your email address, your home address and so on but now Imagine thinking you have car insurance only to find out 2 weeks after the fact that Costco has dropped your insurance. What happened? And you have been driving without insurance for 2 weeks. TWO WEEKS!!!!! ago Costco dropped our insurance!!

    Yes and they can and will do it to you. As is Costco’s policy you needed to use a credit card to pay for our insurance and be billed automatically about every 5 months. Be careful if you credit card expires as they all do, Costco will not be able to auto charge your account. So what will Costco do? Well for us after our account number changed and a new card was issued, and even with all our contact information, Costco notified us via US mail that 2 weeks ago, as a legal notice we dropped your policy do to not being able to bill your credit card. What???? Two weeks after the fact with every means of contacting you Costco sends snail mail 2 weeks after dropping my insurance do to Credit Card Changes. All I’m saying is be careful. If you get a new Credit card issued by your company don’t forget to contact Costco and let them know. They will not notify you of the problem until it is to late and it will be your fault. They can contact you but don’t expect them to be looking out for your best interest.

  23. Walmart is a lot better than costco. Walmart has low prices and you only pay $0 per year to shop at wmt unlike costco which charges 50 bucks every year for as long as ur a memba.