Will a Costco Membership Save You Money -- or Cost You More?

If you're looking for ways to keep your credit card bills down, a Costco membership is sometimes the right choice. Costco is a members-only warehouse club that offers special bargains to those who join.

But, is it worth paying your hard-earned money to become a member? There are three questions you should ask yourself to decide.

1. Will you visit the store enough to cover the membership fee?

Costco's entry-level membership costs $60 a year. This gets you and a household member a card and access to the warehouse clubs where you can buy discounted gas and consumer goods.

To break even for that upfront cost, you must save at least $60 a year -- to end up better off, you'll have to save more than that.

Now, this is pretty easy to do. If you fill up your car with gas at Costco once or twice a month, the gas savings alone would cover the cost of your membership fee. But if you don't live close to a Costco and don't go often, or can't find anything you want to buy when you get there, then you may not end up with $60 in savings.

To determine if you're really going to save, track what you spend on gas and groceries at Costco and compare it to what you'd pay elsewhere. If you save $3 on every tank of gas or $1 a pound on ground beef, and you buy both regularly, for example, you can easily see whether your savings will cover your membership costs. Say, for example, you buy five pounds of ground beef a month and save $1 on each one -- that's $5 a month or $60 a year in savings and the savings on that product alone covers your membership expenses.

2. Will you end up with a lot of waste?

You'll also have to think carefully about whether Costco shopping will leave you with less money in your checking account because you're not using all the products you purchase.

Costco requires you to buy in bulk, and not everyone can use bulk products before they go bad. Say, for example, you spring for Costco's 96 ounce box of Bisquick which makes 155 pancakes. The price is $10.99, so you pay about $0.12 per ounce.

But, let's say you don't eat 155 pancakes before the box goes bad but you instead eat only 75 pancakes (which, let's face it, is still a pretty good amount of pancakes.)

You've wasted about half the box in this scenario, so you actually ended up paying $0.24 per ounce while contributing to food waste. You would have been better off going to Target and buying a 40-ounce box for $4.89 (or about $0.122 per ounce).

This can happen with tons of Costco products, so really think about your consumption needs to determine if bulk buying will work for you. You can track how much pancake mix or pasta or cereal or toothpaste your family needs over a month, see how many months the Costco products would last you, and check the expiration date to see if they'll expire before you use them all.

3. Are you a coupon shopper?

Costco does not accept manufacturer coupons. The store claims it's because Costco offers its own deals and consistently low prices.

But if you are an avid couponer, you may be able to score items for pennies on the dollar or even get many things for free. Giving up that habit to shop at Costco may not make a whole lot of sense for you, especially if you enjoy couponing and can keep your grocery bills affordable by doing so.

By asking yourself these three questions, you can make an informed choice about whether Costco membership is a wise financial move or a big mistake that will leave you with less cash in the end.