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I was at Costco recently and was told it was time to renew my yearly membership. I obliged, having a cart of things I needed to purchase, but that $50 membership fee really shocks a frugal person like me.
The renewal got me thinking: is my Costco membership worth $50 dollars? Are most people's memberships? I decided to do the math.
First, the rules:
- I only considered the kinds of things I regularly buy from Costco. Although it's probably true that you can get a load of laminate flooring at a better price than a flooring store, this is not something I can count on buying anytime soon. I didn't count the kinds of things I rarely buy there either, like ketchup and toilet paper, since Costco makes you buy enough to last for years.
- I compared the prices at Costco to the cheapest prices I could find elsewhere. If I can buy something for less outside of Costco, I will.
- I also did just rough estimates of how often I buy the things I do. For this exercise, I'm too lazy to go back through my purchases from a whole year.
- Finally, we are a family of 4, including a toddler and a baby.
Regular purchases made at Costco versus somewhere else:
Milk: 2 gallons at $5.16 vs 1 gallon at $2.98 at grocery store. Savings of $.40 per gallon, about $60 per year.Formula: 2 cans at $17 vs 1 can at $11 at Wal-Mart. Savings of $2.50 per can, about $180 per year.
Diapers: 200 diapers for $35 vs $19 for 92 diapers at Wal-Mart. Savings of $.03 per diaper, about $72 per year.
Gas: $2.88 per gallon vs $2.95 per gallon at Sinclair or Maverik. Savings of $.07 per gallon, about $60 per year. (I want to note here that we can easily get gas from Costco without going out of our way. If that weren't the case, I'm not sure it would make a real difference.)
Baby Wipes: 8 packages(88 count) at $15.49 vs 1 package at $2 at Wal-Mart. Savings of $.07 per package, about $1 per year. (This one sort of made me laugh, but a dollar's a dollar, right?)
Total Annual Savings: $373
Less membership fee: -$50
Net Savings: $323
Wow! What a difference one store can make! I knew there was a reason I loved Costco other than their $1.50 hot dog/soda combo.
Obviously, we get the majority of our savings from the fact that we have a baby. But even if we bought just milk and gas alone, we would still save much more than the cost of the membership. As our family grows, I anticipate buying more of our groceries from there as well, taking advantage of the bulk quantities. And although I didn't count big ticket items, over time, the savings would really add up. I guess we are destined to be long-time (satisfied) Costco customers.
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