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There’s a reason millions of people are willing to spend money on a Costco membership. While you’re looking at paying $65 per year for a Gold Star membership or $130 for an Executive membership that gives you cash back on your purchases, you’re also getting the benefit of affordably priced products. So all told, shopping at Costco can save you a lot of money.
But if you’re not careful, you might fall into a few common Costco traps that cost you money instead. Here are three pitfalls you might run into.
1. You might buy too many fresh items in bulk — and throw out money as a result
There’s potential savings to be reaped by buying groceries from Costco in bulk. But if you go overboard, you risk having that food spoil before you eat it, which leads to wasted money instead of saved money.
That’s why you must be cautious about buying food in bulk — particularly fresh items with a limited shelf life. As a general rule, you should limit bulk perishables to items your family eats consistently every week, and multiple days a week.
It may be tempting to buy a bag of six avocados from Costco if the cost comes to $1.25 apiece and the cheapest price at your local grocery store is $1.50 apiece. But if you end up throwing out three of those avocados, you’re not doing your finances any good.
So if you’re only likely to use three avocados per week because it’s not a food your family eats regularly, you should spend $4.50 at the supermarket on the three you need instead of spending $7.50 on a six-pack you won’t use up.
2. You might overspend when you’re tempted by the store’s massive inventory
You might occasionally pick up an extra snack at the supermarket when you spot things that entice you. But at Costco, the potential for making impulsive purchases is downright huge thanks to the store’s massive selection of inventory. And if you don’t find a way to keep your impulse spending in check, you risk racking up credit card debt from all of those extra purchases.
Shopping with a list at Costco could help you stay focused and organized, thereby reducing your chances of impulse shopping. It’s also a good idea to stay out of aisles that don’t contain items on your list to reduce the temptation to overspend even more.
Better yet, take a shopping buddy with you who’s on a similar budget. This way, you can keep each other in check.
3. You might miss out on better deals at your local grocery store
Since Costco is known for its ultra-low prices, you might assume it will always have the best deals on food every given week, but that’s not necessarily true.
To go back to avocados, Costco’s avocados for $1.25 apiece might normally be a better deal than what your local supermarket offers. But if there’s a random sale on avocados that brings your cost down to $1 each at your regular supermarket, that’s clearly a better buy.
Before you stock up at Costco, take a look at what your local supermarket has on sale. You may be surprised to learn that Costco doesn’t always have the lowest prices on every single product, even if it often does.
There’s much to be gained from a Costco membership. But you don’t want to fall into these money-wasting traps. Now that they’re on your radar, you can take steps to avoid them.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
