Memberships to warehouse clubs are a budgeting dilemma we’ve faced a few times as a small family of DINKWADS (dual income, no kids with a dog). While warehouse clubs can be a great money saver for large families, it offers a lot more opportunity for analysis paralysis for smaller households.
We’ve gone back and forth on this question, spending many seasons without one before getting a Sam’s Club membership. We kept it for a few years, then cancelled it when the membership renewal seemed like it was no longer worth the annual cost.
Then we moved and found ourselves closer to a Costco than to where we normally buy our groceries (AKA Wally World). After a massive receipt hangover after our one and only trip to King Soopers, we revisited the warehouse club delimma.
Since it’s perfect fodder for The Budget Brigade, I figured I might as well share the factors we weighted to came to our current conclusion. We also track of our spending and savings at the bottom of the page to provide you with a real-world test case, and to help us keep track of if it was worth it or not come renewal time.
Do your homework up front
The question of whether to get a warehouse club membership came from passing the big Costco sign just a few blocks away almost daily. Since we were so close, we stopped in and did a recon mission. Armed with our camera phones, we stalked the aisles of Costco, snapping pictures of the pricing labels for items we often bought and used weekly, if not daily.
While the large sign out front declared in-store hours were for CUSTOMERS ONLY, we didn’t have an issue with a Costco greeter kicking us out for being behind enemy lines. Though if pop culture has taught me anything, I doubt it would have been an issue even if they’d been checking IDs at the door.
As we walked around, I pulled up the Walmart phone on my app to compare prices for what we usually bought. Some things were insanely cheaper at Costco, like the hemp hearts I put in my breakfast smoothie every morning. Other things, like frozen cod, were vastly more expensive. So if it’s worth it or not can come down to what you typically buy.
Factor in convenience
If you’ve got a bookie’s over/under spread going, then at least certain purchases are cheaper at a warehouse club and a membership could save you money on your monthly grocery and household budgeting line item.
In this situation, consider a few other factors in your membership assessment.
An issue that became a deal breaker for us with our last foray into the warehouse club world was convenience. While there were many staples at Sam’s Club that were cheaper than at Walmart, the Sam’s Club was four miles away, off a major highway that backed up from light to light during rush hour (which was almost always in Orlando by the time we moved). The parking lot was also a pain in the ass to get out of and either involved a rather dangerous U-turn on a busy two-lane side road or required a detour that took us in the opposite direction of our house.
By the time we included the extra gas and cost of my husband’s time, it wasn’t worth it to drive down to Sam’s Club for only a few items like almond butter and Tabasco. So we let our membership lapse.
Now, we can walk to Costco. Not only can we walk, but it’s an enjoyable walk. Our faces doesn’t melt off under the burning sun and suffocating humidity. (Though we’ll check back in this summer and see if we’re singing a different tune.)
Look for a first year discount
This is clutch and may make or break the decision, especially for small households like ours. It was another nail in the Sam’s Club coffin in our case.
For our first year of member, we got a discount (this Budget BO$$ loves her a good coupon) so that the membership only cost us $35. We stocked up on some staples (a word of caution on this below) and even bought my husband a new office chair there. We easily made up our investment.
The second year, no such offers were available. Like phone carriers, warehouse clubs don’t give two flips about incentivizing their current members to stay. They are far more concerned with getting new members in the door, because we all know how it goes with annual automatic subscription renewals. Not only did we not need another case of paper or office chair, but our membership cost doubled, making it twice as hard to return on the cost of our investment.
By year three, it wasn’t worth it.
Now that we live near a Costco, the newbie deals have reset. While we still have to pay $60 for a membership, I found a coupon code (that’s right, coupons to the rescue again) for a free $40 digital store card once I registered and signed up for auto renewals (because they know, too, how it goes with subscriptions).
For the first year, we only need to save $20 for the membership to break even. With our recon work above, we’re confident in our ability to take advantage of a membership.
At $60, we’re honestly not sure, which is why we’re going to track our progress below.
While I was looking at the rules and restrictions for the discount code, I saw a note that “eligible customers” included anyone who hadn’t had a membership in the last 18 months. So if you live in a bigger city and have a few different warehouse clubs nearby, you could set up a BJs-Sam’s Club-Costco circuit that you rotate out every 3 years so that you can always take advantage of a discounted membership deal. #LifeHack
A simple online search can help you find current discount codes and promos. They may have deals in store, too, and you can check during your recon visit, but from our experience, the online deals are better. Costco wanted us to sign up for a credit card and an enterprise plan just to save $40. HAHAHA, hard pass.
Stack your big purchase years, if it’s in the budget
One of the pitching points the Costco rep used at customer service was that you could save a lot if you bought all your electronics, tires for your car, etc. at Costco.
This can be true. We replaced the tires on my car and the battery on my husband’s car while we had a Sam’s Club membership. Those two purchases alone helped cover the cost of the membership.
The trick, though, is that you don’t need new tires and batteries, or office chairs and TVs, every year. If you do, for the love of God, stop shopping at Harbor Freight. It’s costing you far more when you consider how often you have to replace the cheap crap they sell.
The other trick is that you don’t want to use this mentality as an excuse to splurge and buy stuff you don’t need and otherwise wouldn’t purchase, just to justify the cost of the membership. Again, this ends up costing you far more in the end.
We don’t have any large purchases planned this year, and we did a full tune-up on our car before the cross-country road trip, so we had to evaluate the membership cost without large purchases.
They also try to sell you on the ancillary services, like the vacation packages. Which is all fine and dandy, but we already have a huge cruise planned next year, so we’ll be doing cheap road trips for the foreseeable future. We’re certainly not going to book a week-long cruise to Mexico to justify a $60 membership fee.
Be careful of overbuying
This is my Achilles’ heel. I love a good deal almost as much as a love a coupon. When I saw how cheap nuts were in bulk at Sam’s Club, I got little cartoon hearts in my eyes. I went absolutely nuts for nuts. We stocked up on:
- Almonds
- Cashews
- Pecans
- Pistachios
- Walnuts
Turns out, with my gut issues, cashews made me want to curl into a ball and die. And my husband didn’t even like cashews or walnuts.
When we prepped for our move, I still have the majority of the nuts we’d bought in bulk. I doubt they were edible at that point, given we hadn’t had a Sam’s Club membership in a year.
Budgeting wise, I would have been better off buying a smaller quantity, even though it was more expensive per ounce versus throwing out a large quantity. Plus, I hate wasting food. It physically makes my stomach hurt.
The lure of a “good deal” tricked me into a bad money decision I now regret. Ditto on the 20-something pack of replacement razor blades I bought. Seriously, how often did I think I was going to shave my legs and armpits?!?! Even after gifting some to my mom, I still have far too many that we then had to schelp across the country. Regret.
Lesson learned: don’t buy stuff in bulk that you don’t eat or use often.
The only nuts we bought at Costco to restock our Colorado pantry are pistachios, and that’s because my husband snacks on them almost every day, so they don’t go to waste.
Compare apples to oranges
I noticed on our recon trip that while one-for-one, Costco was often cheaper than Walmart, they are far more limited in their offerings, including knock-off brands. Our toothbrushes were a perfect example. While it was cheaper to buy an 8-pack of Colgate brushes than 8 individual Colgate brushes, the Colgate 8-pack was more expensive than two of the regular 4-pack of Equate toothbrushes we normally get at Walmart.
In this case, you may actually want to compare apples to oranges instead of apples to apples.
Learn more about saving money by shopping generic versus name brand.
Considering asking a friend to use theirs
Once we dropped our Sam’s Club membership, there were a few key items that we missed getting there, as they were more expensive at Walmart without the larger volume option.
Since we didn’t consume them often enough for the cost savings to justify the membership cost and road rage of traffic, I cashed in on social coupons. When we knew we had plans to see a family member with a young kid that thus was buying diapers in bulk, I’d ask them to grab us a few key staples on their run. I’d immediately cash app them the funds so they weren’t floating us the money, then I put a reminder on my phone and my calendar to make sure I asked for our Tabasco, coffee, and yes, toilet paper, when we saw them. I took a lot of shit for the last one (ha, so punny), but it was worth it.
It wasn’t a connection I wanted to abuse, so we only did this once or twice a year, but it saved us a $60 membership fee without costing us a relationship.
Is a warehouse membership worth it for small families?
Here comes the fun part. Once you’ve assessed the areas above, you might still be on the fence, especially if you can’t find a killer coupon. One option is to wait and keep an eye out for coupons. (They tend to rotate every month.)
To help you evaluate the cost, however, we wanted to offer a case study of our experience this year, since it’s going to help us assess if we renewal next year.
Costco Analysis: Week 1
| Item | Our Normal Purchase | Warehouse Club Price | Saved |
| Hemp hearts | $0.686/ounce | $0.434/ounce | $8.05 |
| Cholula hot sauce | $0.636/ounce | $0.412/ounce | $5.37 |
| Chewy protein bars | $0.404/ounce | $0.25/ounce | $9.32 |
| Colombian coffee | $0.393/ounce | $0.29/ounce | $4.87 |
| Protein bars | $2.08/bar | $1.24/bar | $13.44 |
Week one savings: $41.05
Costco Analysis: Week 2
| Item | Our Normal Purchase | Warehouse Club Price | Saved |
| Sparkling water | $0.465/can | $0.375/can | $2.16 |
| Chicken breasts | $2.67/lb | $2.40/lb | $2.31 |
| Frozen blueberries | $0.151/ounce | $0.146/ounce | $0.24 |
| Chicken stock | $0.093/ounce | $0.052/ounce | $7.87 |
| Cranberry juice | $0.062/ounce | $0.042/ounce | $3.84 |
| Local honey | $0.468/ounce | $0.281/ounce | $8.98 |
| EVOO | $0.392/ounce | $0.414/ounce | -$1.49 |
Week two savings: $23.91
Running total so far: $64.96
Learned my lesson with the EVOO! We must have missed that math on the recon trip.
Costco Analysis: Week 3
| Item | Our Normal Purchase | Warehouse Club Price | Saved |
| GF almond tortillas | $0.995/count | $0.595/count | $8.00 |
| Chicken breasts | $2.67/lb | $2.46/lb | $1.99 |
| Chicken sausage | $1.25/count | $0.98/count | $4.05 |
| Bananas | $0.57/lb | $0.50/lb | $0.21 |
Week three savings: $14.25
Running total so far: $79.21
Surprisingly, our Costco membership, even if we had paid full price, paid off within the first month, though a few notes:
- Walmart chicken is usually cheaper, but the Costco chicken was on sale for $5 off a pack, making it cheaper during the sale, so we’ll continue to buy it while it’s on sale, then switch back to Walmart.
- If you’re on a tight budget, it may be cheaper to buy the sparkling flavored waters and cranberry juice at a warehouse club versus your local grocery store, but it’s an even better budgeting decision to skip them entirely and opt for filtered tap water. We did this for a while to help save for and then recover from moving season.
- Same goes for protein bars. To prevent ourselves from overindulging in this pricey snack, we leave the protein bars by our hiking gear in the hallway, away from the pantry, so I’m not tempted to grab them for snacks throughout the day. Then we make sure to pre-pack them, along with a lunch, so we aren’t tempted to eat out after our hike. This way, we still save money overall.
- As the EVOO above shows, even in bulk, warehouse pricing isn’t always cheaper, so make sure you compare before you buy. For example, we still buy all our fresh berries at Walmart because it’s cheaper than Costco. Ditto for fresh veggies, at least for the quantity we’ll consume as a family of two.
Even with the caveats above, I can honestly say I’m surprised and very glad I decided to track our spending to see. I don’t think I would have believed the savings if I haven’t.
The bottom line
Like with many of the questions we address here at The Budget Brigade, there’s no one clear answer if memberships to warehouse clubs worth it. The factors we cover above all weigh in and have different answers depending on your particular situation. We hope the guidance can help you make the right decision for you.
Looking for other ways to save? Check out our budgeting station for all things related to budgeting. We’re frugal, but we love to have fun, so we’ve put a lot of thought into creative ways to save money without sacrificing.