Smart Money Questions You Need to Ask Before Getting a Costco Membership

Costco membership card
Does it make sense for you? | Tim Boyle/Getty Images

Many people sing the praises of buying in bulk. And one warehouse store some bargain shoppers frequent is Costco. Although you can save money at warehouse stores, in some situations this might not be the best way to get the most bang for your buck. Before you commit to a Costco membership, it’s a good idea to ask yourself a few questions about your spending habits and budget needs.
Are you thinking of joining a warehouse club? Here are eight smart money questions you need to ask yourself before getting a Costco membership.

1. Do you have enough space?

Buying in bulk might sound like a great idea, but is it practical for your living situation? If you live in a tight space, adding large packages to an already cramped living space might not be such a great idea. Survey the amount of space in your kitchen, and identify any other storage spaces that could be suitable for holding your bulk orders. If you’re hard-pressed to find the space, a Costco membership is likely a bad move.

2. Do you buy enough groceries or other items to justify a membership?

costco shopper
If you go out to eat or travel a lot, it’s probably not worth it. | Tim Boyle/Getty Images

How often do you shop for groceries and household items? When is the last time you cooked a meal at home? If you tend to eat out a lot and you’re rarely home, adding the expense of a Costco membership won’t benefit you all that much. You’ll either have to stop eating out as much or forego the membership altogether. Doing both could make your budget a lot tighter than it has to be.

3. Can you control your spending?

Do you know how to control yourself around a good deal? | Joe Raedle/Getty Images

If you have a tough time controlling your urge to spend, a membership to a warehouse store like Costco might be too much to handle. It’s possible you’ll be so taken by the great prices that you’ll overspend and bust your budget. Be honest with yourself about your spending habits and triggers. If you decide a warehouse membership might make you fall off the wagon, don’t do it.

4. Will you use your membership?

costco store
If you don’t think you’ll use it, don’t get one. | Spencer Platt/Getty Images

An unused membership is just as bad as overspending. This is a sneaky way you could end up wasting your hard-earned cash. It’s similar to signing up for a gym membership and never going. Why give away money for a service you’re not receiving? If you hate crowds and have a habit of stopping at the local grocery store on your way home from work, having the additional expense of a Costco membership will chip away at your budget.

5. Do you live close enough to the nearest Costco?

Costco front entrance
If you don’t live close to one, you probably won’t make the time to drive there. | Kevork Djansezian/Getty Images

Decide beforehand whether you’re really going to make the effort to travel to Costco to do your shopping. If you don’t live close to Costco, the chances you’ll spend the energy going there are slim. It will take a lot of motivation to get in your car and go to Costco if it’s far from your home. You should consider how much you’ll be spending on transportation and the time you’ll need to set aside to make the trip.

6. Will you use all the items you buy in bulk?

Buying some things in bulk just doesn’t make sense. | Justin Sullivan/Getty Images

Do you really need six boxes of cereal and 12 rolls of paper towels? If you rarely eat cereal and don’t use that much paper towels, it doesn’t make sense to buy large amounts of these items. Also, if you live alone and don’t have guests over that often, purchasing in bulk could lead to waste. Think about whether you buy enough of certain items to warrant purchasing them in bulk. If you conclude you rarely purchase enough of these items to buy several of them at once, you have your answer. Don’t get a Costco membership “just in case” you might need it. This is an unwise way to manage your money.

7. Will you benefit from the membership’s additional services?

Costco warehouse
You can get so much more out of your membership. | The Cheat Sheet

Joining Costco might make sense if you need access to some of the additional services that come with membership. Costco offers deals on auto insurance, homeowners insurance, and travel packages. You can also access vision care, banking services, and health and life insurance. However, if you already have access to these services, membership might not add much benefit.

8. Will you really save more with a membership?

Woman shopping at Costco
Figure out what makes sense for you. | Tim Boyle/Getty Images

Although Costco has great prices, it’s not the only place to get a good deal. Depending on what you plan to buy, Costco might not be the best place. Take time to do some comparison shopping to see whether the items you buy most often could be purchased elsewhere for a lower price. Trader Joe’s, for example, offers deals that are just as good as (and sometimes better than) Costco. As of this writing, Costco doesn’t offer price matching, so your best bet is to find a store that offers the best deals and closely fits your shopping needs.
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