Here’s How to Make Sure You’re Actually Saving Money at Costco

updated May 11, 2022
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It’s pretty standard to walk out of Costco with a few hundred dollars less in your bank account. Blame it on the store’s bulk buys and members-only discounts on everything from apples to za’atar seasoning. You name it and Costco likely has an offer that’ll feel like the deal of the century. It’s easy to feel like you’re saving money while shopping at Costco, but you can also easily spend (way) more per trip than you had actually planned. And there’s also the membership fee to think about. How can you tell if Costco is actually saving you money in the long run?

Here’s how to examine whether or not you’re making the most of your Costco membership.

1. Choose the right membership level.

Costco offers two levels of memberships at varying price points (with a range of perks). The most affordable way to get your foot in the door is with a basic $60 Gold Star membership. At $120, the Gold Star Executive membership is twice the price, but cardholders also earn 2% back annually on eligible Costco warehouse and travel purchases. Both levels allow access to Costco’s U.S. locations, affiliated gas stations, and other member perks. Both memberships are valid for one primary member plus a secondary adult member from the same household.

Read more: Should You Get a Costco Membership?

The defining perk at the Gold Star Executive level (especially these days when rental car and travel deals aren’t as appealing) is the 2% cash back. If you spend $6,000 at Costco during the year, you’ll make back the cost of the membership fee. Spend more than $6,000 and that’s extra cash in your bank account. If you expect to spend at least $6,000 on groceries, household staples, appliances, gas, tires, eyeglasses, or personal care items within a year, sign up for the Gold Star Executive level. If you imagine you’ll come in less than that, get the basic $60 Gold Star membership.

If you’re already a member, check your credit card statements for the past year to see how much you’ve spent.

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2. Analyze your spending over a four-month period.

This is not a super-fun task, but try it: Save every single receipt for four months to keep track of every dollar you spent at Costco. When you’ve accumulated at least four months of receipts, identify your most regular purchases (i.e., toilet paper, eggs, dish soap) and compare the total amount of money spent on them to how much you would have spent on the very same quantity at a different grocery store. How do the numbers stack up?

Despite its oversized reputation, warehouse shopping isn’t all bulk buying. Costco’s famous rotisserie chicken is just $5 — that’s $2 cheaper than at Whole Foods and half the price of the organic option— and can feed a family of four for a night or an individual for a week. Beer, wine, and liquor are consistently less expensive at Costco whether you buy private-label or name-brand booze. Even personal care products you use everyday like shampoo are big money savers (Nexxus Shampoo and Conditioner cost 50 percent less at Costco than at Ulta). 

And don’t overlook Costco’s gas discount either. Costco gas is on average 21 cents cheaper per gallon than the corner station. The average working adult drives over 18,000 miles per year. If you only filled up at Costco you could save $164 per year on gas alone.

3. Examine big purchases.

Being a Costco member when it’s time to purchase a new set of tires can pay for itself in a single swipe. Speaking from experience, I recently had a set of four tires installed for my midsize SUV for $611 (including lifetime flat tire repair and tire rotation). In comparison, my local tire center in Georgia would have charged me $776 to install the exact same tires without the additional benefits. That savings of $165 pays for a Gold Star membership nearly three times over and more than pays for an Executive membership.

Even if you aren’t in the market for new tires, a Costco membership can pay for itself if you plan to purchase a television, computer, or any appliances in the next 12 months, all thanks to the store’s steep discounts on bigger-ticket items.

Are you a Costco member? Do you have any idea how much money it’s saved you? Discuss in the comments below!