Dave Ramsey Said He's a Member of Costco and Sam's Club. Should You Sign Up?

Should you follow Ramsey's lead and become a club member?

Both Costco and Sam's Club are warehouse clubs where you can make bulk buys at a discount. But you have to become a member in order to be eligible to shop at either one.

Finance expert Dave Ramsey has joined both of these popular clubs. In response to a letter from a reader asking about his opinion on wholesale clubs, Ramsey wrote, "My wife and I are members of Costco and Sam's Club."

Ramsey is well-known for his financial knowledge, and for being careful and purposeful about how he spends his money. The fact he's chosen to pay a membership fee to Costco and Sam's obviously suggests he believes this upfront cost is worth paying due to the membership benefits available.

But, should you follow his lead and sign up for yourself?

Does Costco or Sam's membership make sense for you?

For most people, it doesn't make a whole lot of sense to pay a membership fee for two warehouse clubs. You may decide you want to join Sam's or you may decide you want to join Costco -- and doing either one could be smart depending on your circumstances. But paying for both would likely be redundant as the discounts and savings you'd get from each club would overlap in many ways.

So, the big question is, would it be smart to join either one. And the answer to that is going to depend on how you shop and what you tend to shop for.

Both Costco and Sam's Club sell large bulk items. You need to buy a lot of something in order to get a meaningful discount on it. This can be fine if you have a large family or a big household -- or if you can join up with a group of others and split bulk purchases up among you. But if you are single or in a small household and you won't be able to use up bulk buys before they go bad, then Costco and Sam's probably aren't right for you.

Both stores also have large grocery departments along with selling just about everything else you can imagine from clothing to TVs. If you tend to be a big consumer and you buy a lot of stuff, then you can benefit from bargains on the myriad products the big warehouse clubs offer. But if you're a minimalist who rarely buys things and you prefer to get mostly organic fresh foods, you may not find much you actually want to buy at a warehouse club.

Finally, proximity to your home also matters. If you have to drive a long distance to go to a warehouse club, then it may be a hassle and any savings you realize would be lost due to gas and time.

Think carefully before you become a warehouse club member

For many people, joining Costco or Sam's as Dave Ramsey has done will end up paying off. You may be able to give your credit cards less of a workout when you shop thanks to lower prices.

But, ultimately, you need to think about how often you'll shop there and what kinds of things you'll buy in order to decide if the membership fee is justified. Taking time to think this decision through before paying an annual fee can help you avoid wasting money on a membership you don't use much in the end.