This Trick Helps Me Maximize My Savings at Costco

It's a strategy you can use, too.

When my husband and I first started shopping at Costco jointly, we had recently moved in together and didn't have children. And while we enjoyed walking the aisles, sampling different food items, and scoring household products on the cheap, we generally didn't visit Costco more than once or twice a month.

Nowadays, Costco runs are a weekly thing in my household. That's because we rely on Costco to snag discounts on things like produce, milk, eggs, and other food items we go through a lot. Compared to what we'd spend at a regular supermarket, loading up on these and other items at Costco shaves a lot of money off of my family's grocery bills.

But it's not just Costco's low prices that lead to savings. Choosing the right membership could also put more back in your pocket, as I learned several years back.

It could pay to upgrade your membership

For years, my husband and I shared a basic Costco membership, which now comes with a $60 price tag. But for $60 more ($120 in total), you can upgrade to an Executive Membership. That's a move we made a few years ago, and it's been paying off ever since.

When you upgrade to an Executive Membership at Costco, you're entitled to 2% rewards on your Costco purchases. And those rewards extend to online purchases as well as Costco Travel purchases.

Now a lot of people are familiar with getting cash back rewards on their credit cards. This program works similarly so that if you spend $5,000 a year at Costco, you get $100 back.

Since my family commonly spends upward of $5,000 a year at Costco, the Executive Membership makes a lot of sense for us. Most weeks that we shop there, our tab comes to roughly $100 -- sometimes a little less, and sometimes (okay, often) more. Plus, we'll also make one-off purchases at Costco, like a new TV or laptop. And those are eligible for 2% rewards as well.

All told, it's common for us to receive an annual reward certificate from our Executive Membership that's upward of $100. Since it costs $60 to do that upgrade, we come out ahead financially.

Should you upgrade your Costco membership?

Costco's Executive Membership won't make sense for you if you don't shop there all that often or don't tend to spend a lot in the course of a year. But if you shop at Costco frequently, then it pays to crunch some numbers to see if an Executive Membership makes sense.

In a nutshell, if you spend $3,000 a year at Costco, you'll break even when upgrading to the Executive Membership. That's because you'll be eligible for $60 in rewards but will also spend an added $60 on your higher-tiered membership.

So basically, all you need to do is look at your Costco spending from the past year or two and see what it totals. If it's $3,000 or more, an Executive Membership probably makes sense for you (unless there's a reason you expect your Costco spending to go down this year).

In fact, if your recent Costco yearly spending puts you on the cusp of that $3,000 threshold, it could still pay to upgrade this year. Living costs are much higher right now due to inflation, and while Costco's prices are still competitive, like other retailers, they've also gone up to some degree. So investing in an Executive Membership could ultimately put more money in your pocket.