How to Hack Costco like a True Frugal Hacker

As we've alluded to many times in past posts, one of our biggest strategies to decreasing our grocery and household product spend was to shift as much of our purchases to Costco as possible. The idea is to buy more in bulk, but less often, and since we have the storage space for all of this stuff, we could afford to fit it all in our house. Buying in bulk from a warehouse store like Costco can dramatically reduce your per unit cost of groceries and household items. Read this post by MMM outlining how much cheaper Costco is compared to your neighborhood grocery store such as Safeway.

If you want to be a true frugal hacker, Costco is well worth the time and effort provided you have the discipline to stick to the rules. Also, the larger your family, the better your savings at Costco. Bonus points if you can pool your purchases with friends, roommates, neighbors, or colleagues, to make bulk-buying even more worth it! You can even split the membership fee with these people.

Our grocery spend for the two of us these days is a paltry $240/month! Even though we both get quite a few free meals at work throughout the week, we still cook 4-5 times a week at home, and eat breakfast and smoothies at home before heading to work.

That great feeling when you've escaped Costco with just 5 items in your cart, and none of it junk food.


How to Hack the Costco Game

  1. Only walk in if you have a pre-defined shopping list of what you intend to buy that day. If you go in without a list or a plan, you will get pwn3ed by a $100 bill at checkout. You will also get bulldozed by the crowds, especially on the weekends. Costco is not the place for your average shopper. It's a high-intensity warehouse store meant only for people who know what they're doing.
  2. Do not buy anything outside this list. Carry the exact amount you'll need in cash if you don't have the self-control (the credit card points are not worth the over-spending). You can't be deciding what to buy when you're at Costco. Those decisions need to have already happened ahead of time. You only go to Costco to pickup the stuff you need. Therefore it's best if you go there when you're in a hurry.
  3. Do unit price comparisons ahead of time. Not everything is cheaper at Costco. Sometimes Amazon is cheaper. Sometimes your neighborhood store is cheaper (Safeway, Whole Foods, etc.) for some products because of weekly sales, coupons, etc.
  4. Your Costco membership also works for pharmacies and eye glasses. Eye glasses are ridiculously cheap at Costco and they look just the same as if you bought them at a designer store. Mrs. FH's current pair is from Costco. Mr. FH's current pair is almost a decade old and will probably be getting his next pair from Costco as well.
  5. If you don't buy enough stuff from Costco, and consequently don't want to pay for the annual membership fee, you can either get one of your friends to buy you a bunch of gift cards, or you can just tag along with a friend whenever they go. The tag-along approach is more cumbersome since you need to sync your schedules, so the gift card route works better. You may not get the sale pricing though if you use the gift cards (never tried it). 
  6. Try the samples only if you won't be tempted to buy them. Usually the samples are the high-margin items!
  7. Don't walk around or meander aimlessly. Costco makes money when you buy shit you don't really need. Like a kayak! Or junk food. Or a new pair of shoes/sandals. Or sometimes even a TV.
  8. Do not overeat/over-consume products just because you have more of it at home. Costco is only cheaper if you continue to eat/consume the same amount as before. Better to hide the big bags and boxes out-of-sight in a pantry or in your basement and transfer small quantities to your kitchen / living space as you need it.
  9. Make sure nothing bought from Costco goes to waste or goes unused. Costco relies on you over-buying a larger quantity of something and finding yourself unable to finish it. If something is going to last you more than 6 months, don't buy it.
  10. Every month or two, take an inventory of all the things you bought from Costco but have never opened or made a reasonable dent into. These are your failures. These are the items where Costco has recovered their extraordinarily low prices from you.
  11. Costco deliberately has massive shopping carts to make you feel like you need to buy more to fill up the cart. Don't fall for that shit. Look at our cart above. It's only got 5 items. It's OK to have only 5 items. You can carry your own bags if your cart feels odd being so empty at the checkout line.
  12. Shop at Costco during low-traffic periods such as weekday mornings, weekday afternoons, or weeknights. If you work during the day, weeknights 30 minutes before closing is a good time. The crowds are low, parking is easier, and it's harder to meander since the store closes soon.
  13. If you have a tough time not over-buying at Costco, use a service like Google Express to buy your non-perishables. The $5 delivery fee is well worth the cost of overbuying shit you don't need. Also it covers the cost of delivery and not having to lug heavy products back home. You also get to keep your car at home and avoid the crazy parking situation.

We secured a $55 Costco membership and put together a pre-defined list of things we would get from there. The list is absolutely critical to ensuring you don't over-buy anything. Here's what our list looks like. We only buy stuff from this list, nothing else.


Our Costco Shopping List

  • Refrigerated
    • Milk Homo 2pk
    • Eggs
    • Tropicana Orange Juice
    • Cuties/Clementines (sometimes)
    • Baby Spinach box
    • Cucumbers (cukes)
    • Minced garlic bottle
    • Almond milk 6pk
    • Martinelli's Apple Cider
    • Butter
  • Frozen
    • Ice cream - Haagen Dazs / Mochi / Drumstick
    • Frozen veggies (for cooking)
    • Frozen berries (for smoothies)
    • Frozen pineapple chunks (for smoothies + pizza)
  • Kitchen
    • Wildroots Trail Mix / Nature's Garden Omega 3 Deluxe Mix
    • Mixed nuts
    • Almonds
    • Bread - Buttermilk/multigrain/whole wheat
    • Organic Quinoa
    • Avocados
    • Bananas
    • Sugar
    • Brown Sugar
    • Avocado oil
    • Compostable Bio Bags
    • Kirkland Basmati Rice Bag (20lb)
    • Lundberg Brown Rice 12lb
    • Maple Syrup
    • Ziploc Sandwich bags
    • Unroasted/Unsalted Cashews (black lid)
    • Almonds
    • Vanilla Whey Protein Powder
    • Chips (Ruffles/Lays/Kirkland/Veggie Straws/Sweet Potato)
    • Quaker Oatmeal 10lb
    • Kirkland/Bounty Kitchen Towels
  • Canned
    • Garbanzo beans canned
    • Red kidney beans canned
    • Black Beans canned
  • Bathroom
    • Kirkland Body Wash
    • Always Sanitary Napkins
    • Charmin Toilet Paper (30pk)
    • Pantene Shampoo
    • Pantene Conditioner
    • Crest Toothpaste 5pk / Sensodyne Toothpaste 4pk
    • Oral-B Glide Floss
  • Other
    • Cinemark Movie Tickets
    • Neutrogena / Alba Sunscreen
    • Glaceau Smart Water
    • Kirkland Bottled Water (occasional use only, we get amazing tap water here in SF)


Costco vs. Whole Foods

We weren't buying from Whole Foods before, but to see how much extra our friends were paying, we did a quick comparison of unit prices between Whole Foods and Costco for regular bulk stuff we get, and it blew our minds. The winner? Costco! Whole Foods is just insanely pricey and it's not clear if the extra pricing is worth it.

Unit price comparison of basic bulk stuff we get between Whole Foods and Costco. On average, Whole Foods is 82% more expensive than Costco in our city (San Francisco).

From these numbers alone, Whole Foods is a whopping 82% more expensive than Costco on average. That's ridiculous! And that's not even taking into account the 2% guaranteed cash back rewards Costco offers to all its members.

Here's another post by MMM pitting Costco with Safeway this time, showing how Costco is 41% cheaper than Safeway. If you don't really care about shopping at stores like Whole Foods or Safeway, switch your shopping to Costco and watch the savings add up quickly!

Mr. Frugal Hacker

Born in India. Grew up in Dubai for 15 years. Studied and lived in Canada for 8 years. Backpacked in Europe for 2 months. Lived in Toronto for 1.5 years. Working in San Francisco for the past 4 years. Runner, cyclist, software engineer.