Is Costco a good place for a family of three to save money?
Hello YNABers -
We are a family of three - my husband, me and my 1 year old. We have been considering signing up for the Costco membership but I am not sure if it's going to be worth for us, especially for grocery. Our nearest store is 15 min away, which is not too bad but a bit time consuming. I would love to hear your opinion. or Costco saving hack, etc. Thanks!
It depends. Do you have room to store large quantities of items? Do you have the funds on hand for up front costs ? For example, I buy my toilet paper there. It's a giant package, but it fits on the floor of my linen closet. I compared the unit price (ie price per roll) to the prices at Target (including the 5% discount from my Red Card and it was definitely cheaper. But some people might only have $10 in their budget this month for paper products and no viable category to reallocate from so even though long term it might be cheaper to buy from Costco (the giant package of toilet paper lasts me 6+ months), if they need toilet paper on today, they need to go to the grocery store and buy a 6-pack. But there are lots of frozen foods I don't buy there even though the prices are really good because there is just no room in the freezer. Another consideration - since it is large quantities of items, will you use a perishable before it goes bad?
It's not just the store that you need to consider for food spending but also your family's approach to food.
Do you: meal plan, predominantly cook and eat at home, pack a lunch, shop with a list (and stick to the list), buy seasonal local foods, take advantage of sales on foods you use frequently? And how would you describe your typical food waste? The statistics on how much food the average household throws out are just shocking.
Because Costco is an easy place to impulse spend.
I agree with jenmas it really does depend. The things you can really save some money on are paper products (toilet paper, paper towels, paper plates, etc), but you need the space to store large quantities and the money to buy them up front. Garbage bags and food storage bags are a good deal too.
Food can be tricky, especially perishable food; it's very easy to waste money on food gone bad if you aren't really careful. In some cases food items are quite high quality and may be more expensive than similar items you're used to buying. Costco's meat is very good and prices are good for the quality. On the other hand, buying bread there for a family of three probably isn't a good idea - you'd probably never use it fast enough.
Thank you all for your advice. All is so helpful.
We currently do have a decent storing space in the basement; however, we are planning to move to a cheaper place this summer, and I am not sure if we get any extra storage space. That's an excellent point to consider.. Also budgeting for buying bulk is something important for us to consider... Right now, our budget is pretty tight and it will be a quite challenge (but not impossible) to adjust to get ready for purchasing bulk although we buy some items bulk at Amazon Prime.
We usually do meal planning weekly and we cook food at home like 99%. We pack lunch. We do not go to a coffee shop. We buy bulk for meat at Safeway (or H-mart) and freeze it sometimes but our freezer is not so big. We do a decent job not wasting food but it happens occasionally. We hardly eat packaged food. Considering the way we cook/eat, buying fresh food for bulk might not make sense... We also hardly buy new clothing. We go to a goodwill or Buffalo exchange.
Thank you again for your advice. I will continue considering to see if it fits in our need. Such a great community we have here.
There are several things at Costco that are worth the cost of a membership I think. The thing that sold me was a pack of razors that would cost $80 normally cost only $50 at Costco. That alone paid for about half the membership lasted us several years. Toilet paper and paper towel, which has already been mentioned. Also, their meat is much cheaper and good quality. We buy their pre-cooked chickens for $5 and then break them down to add to multiple meals - which goes a long way. Other expensive items like olive oil and alcohol are also cheaper. We've found that at our Costco tge fresh produce can be a bit spotty. In a large bag of oranges, for example, you may have some rotted ones or they're just not ripe adn not very good - so I would definitely watch out for that. The trick, as another user mentioned, is to stick to the basics. What are the things that you always need and have room to store? Avoid all the other "great deals" that you don't really need. It can be harder at first as you're figuring out what they have. Now we have a standing list and we try to stick to that. We also found that we needed to adjust our budgeting to accommodate the every other month trip to Costco which puts a bigger dent in some months than others.
I'm totally agree with Turquoise Keyboard. It can be a total profit to you if you just buy the things that you need on daily routine. Don't just buy anything looking at the cheaper price as it's directly going to decrease your overall profit. I prefer to read few proven guides also from the people who really purchased things & found discount in them. Perhaps, you should also go through them to save more bucks. I prefer DollarSprout, FinancePolice & The Penny Hoarder.
I love Costco. We are a family of 2 adults and 2 dogs. My fiance is no longer invited to Costco trips because he will meander the store and get suckered in to the deals while I am out fetching the list. I am very cautious which products I buy there. I love that their bulk meat (chicken & ground beef) comes in 6 vacuum sealed bags. I can use what I need, freeze the rest and un-freeze just a pack or two at a time. We also buy laundry detergent, ziploc bags, paper towels, toilet paper, frozen shrimp, gatorade, wine, Clif bars. Most things we purchase are non-perishable. Sometimes we will get produce if we happen to be in the mood for a whole lot of one type of veggie hahaha.
I agree about the money up front being the biggest thing. I go to Costco so infrequently that I had been just throwing it in the groceries budget and blowing that up about every other month and having to move money around. Now I have a Costco category so I can plan for those trips and only go when I know I have at least $200 in that category. Right now that category has nothing in it because I just went to Costco and have other priorities to fund.
I also agree - their $5 rotisserie chickens are the BEST.
I couldn't live without Costco. But it takes discipline to shop there and save money. Impulse buying will certainly kill your budget. Go with a list and be informed about what good prices are for your most common staples. I find their meats to be a good value for us, some of the fish is OK (it always seems fresh, by OK, I mean pricing), and there is no better value than the rotisserie chickens. The fruits and veggies are hit and miss. We get very good pricing on the bread, certain canned staples like black beans and kidney beans, the rice, the flour, the sugar, the milk and the eggs. Those items are usually 30%, or more, cheaper than the local supermarket. The gas and propane are also good values for us.
Oh, and you may need a dedicated freezer to handle the bulk. We bought an upright freezer only unit (no refrigerator) for around $400 new, and had no problem getting a return on our money by buying meats and fish in bulk when on sale.
Also budgeting for buying bulk is something important for us to consider... Right now, our budget is pretty tight and it will be a quite challenge (but not impossible) to adjust to get ready for purchasing bulk although we buy some items bulk at Amazon Prime.
My budget is pretty tight too, by choice now, but when I was unemployed I couldn't handle when my grocery spend came in too high from buying bulk items or having one of those months where you run out of everything at once.
My solution was to create two food categoies: grocery (for fresh items) and pantry/freezer (for frozen, dry, canned, condiments). In a way, the grocery category is for essential eating, as in I need it now. The pantry/freezer category is more a true expenses category, not always spent each month, but which will eventually be spent at some point this year. The bulk purchases are irregular and lumpy, but I can even out the budgeting for them and remove all annoyance and money drama. I also like to save up money to buy a share of a grass-fed animal direct from a farmer in the fall. Keeping the two pots of food money seprate enables me to save for irregular purchases. I am then able to look to my grocery category balance for spending/pacing guidance each month.
When I first separated my food money into the 2 categories, I just siphoned 10% off my total grocery spend each week/month to start to build up in pantry/freezer to take advantage of sales and bulk purchases. Over time, the amount spent at the grocery store was a little less due to having purchased items when on sale and having them in my pantry/freezer. I'm now at 2/3 money to grocery (fresh items) and 1/3 money to pantry/freezer.