When creating a budget, one of the categories that people evaluate first is their grocery bill.
Are we eating all of our perishable food, or is it going to waste?
Can my family eat healthy without breaking the bank?
Am I saving as much as I can on groceries?
These are some of the most common questions that people ask when evaluating their budget. After all, groceries are essentially a recurring monthly bill. But unlike a monthly mortgage or car payment, your grocery expense is something you can dictate.
So that leads to the question: Is a warehouse membership to places like Costco, Sam’s Club, and BJ’s truly worth it? Do the savings actually offset the cost of membership?
Like most financial questions, the answer is, “It depends.” There really is no definitive answer to this question. Instead, let’s look at the individual factors that can determine whether a warehouse membership is right for you.
How Do Warehouse Chains Like Costco Work?
To determine whether a membership to places like Costco, Sam’s Club, or BJ’s Wholesale Club is worth it, it is important to understand how these chains work.
Unlike regular retailers, warehouse stores charge a fixed yearly membership to their customers. This membership is what allows you into each store. The benefit of the membership is that you pay a much lower markup, which is why these stores often refer to themselves as “buying clubs.”
According to Kiplinger, your local grocery store likely charges a markup between 25% and 50% of the actual cost of the product. Compare that to the average 14% markup at warehouse chains. But it’s important to remember that while you may be paying rock bottom prices for some of these products, the chain is making up for those lost profits through the membership fee.
So instead of asking whether a membership is worth it, perhaps a better question might be: “Am I saving enough to offset the cost of membership?”

How to Save Money with a Costco, Sam’s Club, or BJ’s Wholesale Club Membership
The trick to actually saving money with a membership is to be strategic.
It’s easy to impulse buy and overspend because you’re “saving” so much money by buying in bulk and avoiding high markups. But this mindset can quickly lead to busting your budget instead of reining it in.
Here are the top strategies to make a Costco membership worth it:
Consider the perishable waste.
Aside from low markups, warehouse stores are known for the ability to purchase items in bulk. However, buying perishable items in bulk can often lead to waste. This is a “hidden” budget buster because instead of wasting money upfront, the money is lost when you are forced to throw the perishable items away. This isn’t as much of an issue for larger families, especially if you pack lunches for the kids or meal prep at home. But if you’re single or have a smaller family, purchasing perishables such as chicken salad or fruit might be better at your local supermarket unless you can consume the food by the expiration date.
Stock up on the essentials.
We all need toilet paper, garbage bags, and toothpaste. Since these essentials don’t spoil like fruits, vegetables, or dairy, these are excellent buys at wholesale clubs. If you have a newborn, you can save incredible money by stocking up on diapers and baby wipes. In many cases, the savings from these items alone can make the cost of membership worth it.
Access to discounted services.
It’s easy to think that these stores only sell groceries or household products, but they also sell a range of products and services we don’t think about until we need them. For example, we typically don’t think about tires or car batteries until it’s time to replace them. Warehouse clubs like Costco sell a wide range of brand-name tires and offer tire installation that is often more cost-effective than a traditional auto shop. Other services include auto and home insurance, deals on travel, and savings on prescription drugs.
Enjoy the free samples.
Warehouse clubs like Costco are known for their free samples. If you have picky eaters in the family, then I recommend trying the free samples before purchasing a product, especially in bulk. This is a much better alternative than trying a new item from a traditional grocery store, only to discover that no one wants to eat it and the item goes to waste. In addition to free samples, warehouse clubs often have snack bars or a food court with things like pizza and hotdogs that make for a cost-effective date or night away from home.
Fill up the tank whenever you shop.
If your Costco has a gas station, make it part of your strategy to fill up whenever you go on a grocery run. Costco gas stations can save you anywhere between 5 cents and 30 cents a gallon, depending on where you live. Those savings add up quickly, especially in today’s economy!
While there are great deals and savings to be had at stores like Costco, simply getting a membership isn’t a guaranteed way to save money. You still need a strategy to take advantage of the membership benefits. By keeping these tips in mind, you’ll be able to be more efficient with your money!
Are There Any Disadvantages to Stores Like Costco?
Just because there are plenty of benefits to warehouse clubs, it doesn’t necessarily mean that it’s the right fit for you and your family.
Consider some of the cons.
Sometimes there is no membership club nearby.
In some cases, the cost of driving to the closest Costco or Sam’s Club could offset any potential savings. For instance, in rural areas, you might be better off just shopping at the local grocery store and taking advantage of coupons and any special promotions. But even if you live in a metropolitan area, if the club is located on the other side of the city or is similarly difficult to get to, that is a factor to take into consideration before committing to a membership.
You need a place to store items in bulk.
Since most of the savings are through purchasing items in bulk, you will need a place to store the items you don’t use immediately. Do you have a place to store toilet paper and tissues until it’s time to use them? Is there enough space in the pantry for lots of extra condiments and canned food?
If you live in an apartment or in a starter home, this is definitely something to consider, especially if you are trying to keep the place tidy and avoid clutter. In short, it’s important to think beyond the point of purchase and envision where you’ll store the items, when you’ll use them, and how you’ll use them.
It is an upfront investment.
It might take some planning to fully commit to a warehouse store membership for those living paycheck to paycheck.

Aside from the actual membership cost, purchasing in bulk can actually cause your grocery bill to skyrocket upfront. Remember, most savings happen when you buy in bulk, which also means you have to purchase a lot of one specific item to enjoy the cost savings. For example, buying nuts in bulk could easily cost the same amount as groceries for an entire week.
Of course, this isn’t to say that membership is bad or is a budget buster. It simply means that you may need to plan or “transition” into incorporating Costco into your grocery routine.
What If I’m Unsure About Joining a Warehouse Club?
Fortunately, there are ways to “test” out a membership to see if joining is right for you and your family!
Some clubs will allow you to enter the store as a member’s guest.
If you have friends that are members of Costco, Sam’s Club, or BJ’s, ask them what the guest policy is and whether or not they’d be willing to bring you as a guest. If so, you’ll be able to experience the same savings and see whether or not this is a membership you can take advantage of.
Some clubs will even allow you to shop using a day-pass. However, keep in mind that the day-pass typically includes an added surcharge, so you’re not truly experiencing the full savings. Costco, for example, has a 5% surcharge for day passes. Still, you’ll be able to peruse and shop the range of products and get a feel for what it is like to be a member.
The Truth About Saving Money with Costco or Any Other Membership Club
At the end of the day, there is no “magic bullet” or secret formula to saving money on groceries or household items.
What I mean is: chances are that a Costco membership will not make or break your financial situation.
This is also true for Sam’s Club, BJ’s, or any other warehouse store.
Why?
Because a healthy budget is all about balancing your income with your expenditures, taking your priorities and your goals into account.
In this way, creating a budget is similar to dieting. With dieting and fitness, people are always looking for that one “secret” that will help them lose weight, get a six-pack, or simply feel healthier and younger again. But just as the principles of health and fitness are relatively straightforward, the same is true with our finances: spend less than you take in.
So with that being said, a membership to Costco isn’t some exclusive “secret” that will fix your budget overnight.

You won’t suddenly be rolling in the dough just because you joined a warehouse club.
However, you can certainly incorporate a membership into your budget to save money, but it will take strategic planning and commitment to execute that plan.
Are you a member of Costco or any of these membership clubs? Do you think it’s worth it? Your experience may help another mom and their family! Leave your thoughts in the comments section below. I’d love to hear what you think!