Costco – Love it or hate it? Two financial advisors battle it out!

For your entertainment, I have brought into the fighting ring two financial advisors, Rebecca Kennedy and Addie McHale, to duke it out over whether a Costco membership is a good or bad financial move.  Hold onto your hats, readers!  This could get messy!


This week we hear from Costco Non-Believer, Rebecca Kennedy, CFP ®.


Kristi:  When did you get your first Costco membership?  Why?  How long did you have it?


Rebecca Kennedy:  My first membership was a wedding gift that we received almost exactly 10 years ago.  We had it for one year because that was the length of the membership.  We let it expire because we just didn’t go much. We tend to join every few years for one reason or other, mainly because our memories are short.


KS:  What did you love about your membership?  What did you hate about it?


RK:  Shopping at Costco is truly an experience.  It’s laid-out with fun, eye-catching products that are sure to enhance your life in some form or fashion – at least temporarily, like all things.   What I dislike about Costco, in addition to the crowds and how much time a shopping trip can take, is that it’s FAR too easy to walk out having spent hundreds of dollars on debatable “needs.”


KS: Can you quantify or just anecdotally say why you think a membership is a good/bad financial move?


RK:  I think membership is a bad financial move for most people, though I can’t unequivocally say it is for all.  I consider myself a fairly disciplined person, though definitely not as disciplined as Addie, and I have trouble making rational purchases at Costco.  Inevitably, I walk out having spent more than was ever intended and purchased things that were not on my shopping list.


Not everything sold at Costco is even that good a deal, especially when you factor in the time value of money spent upfront on an item that could take months to consume.  It’s even less of a good deal if some portion of your purchases aren’t fully consumed and eventually get thrown out or perish before their “use by” date.     Case in point, I still have four frozen veggie burgers in my freezer from the 16-count bulk pack purchased months ago.  They were a decent deal, and I thought they would make weeknight dinners easier.  But you know what?  I’m sick of veggie burgers.


And what about the value of your time making trips to multiple stores?  Costco doesn’t carry everything on my shopping list so that means at least one other trip. All of these things, in my opinion, argue against a Costco membership as a good financial move.


Rebecca Kennedy


Rebecca Kennedy, CFP ® is the Principal of Kennedy Financial Planning, a fee-only Registered Investment Advisor based in Denver, Colorado.  She does hourly and project-based financial planning and investment advising for a wide range of clients.  She is a member of the Garrett Planning Network, NAPFA, and the Colorado Financial Planning Association, and has over 19 years of experience in the financial services industry.


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