How to budget for Costco

 Happy Wednesday!!!!
I have had TONS of great questions lately. I hope that I can answer them all for you in time, thanks for being patient with me as I slowly chip away at them!
I've still been getting tons of questions about how I budget and track my budgets, so I'll focus on banging those out until I answer them all.
Here's a big one that I've been getting regarding shopping at Costco, and how to keep track of it in my envelope budget. To see all my Costco tips and tricks, and for a list of what I buy (and avoid) at Costco click HERE.

Laurie wrote:
“I already shop at Costco, but not efficiently.  Most of the items you listed that you usually buy there I would buy there too.  For example, I have 3 children, 2 are still in diapers.  My first question is,

  1. do I wait until I run out of all or most of those items, or buy what there are coupons for, even if I don't need it?
  2. If I need it and there is not a coupon should I be filling in with the best deal I can find at Kroger until I do see a coupon?
  3. I don't see how I'll be able to stick to the grocery budget, which would be $125 a week for my family of 5, at least not initially. I can't seem to get out of Costco for under $100 and if i still had to go to Kroger, it would never happen. so if I waited to stock up on several items, I feel like I wouldn't have the money left over for the items I need immediately, like milk and eggs, for instance.
  4. I know that once I buy 6 boxes of dish washer detergent I wont need it for months, so I will save in the long run, I'm just confused about how to stick to the budget right off the bat. Can I expect it to cost more initially???  Aaaahhh! Sincerely, a confused but motivated wife and mother, Laurie”

Great questions, Laurie! I divided them up and numbered them to keep things clearer.
First off, trust me…we all feel the same way. It can be really confusing sometimes. Let me nail down your questions as best I can by breaking down my tips:

  • In general, you want to focus your shopping on stocking up. This takes time, trust me. But once you get in the habit of “buying ahead” as I call it, then you will get to the point where you shouldn't ever have to run out and pay full-price for something because you are in dire need of it. I explain this below better.
  • That being said, this is hard because you need to MUST stay within your budget! You simply CAN'T GO OVER. That's not how it works. You won't be doing anyone any favors if you get in the habit of allowing yourself to go over on those times you need to “really stock up”. Just know that you won't be able to stock up on everything at first. You won't be able to buy anything you want or even everything you need at first…and probably not ever again. But, you will get everything you want and need over time, but it might not be right when you want it every time. And guess what? It's totally fine! My family eats great, our clothes smell good, my hair isn't falling out, and we're fine! It's all about making choices and keeping the bigger picture in mind.
  • Be willing to put things back. I keep my shopping list, the calculator on my phone, and my price notebook with me while shopping. As I put something in the cart, I subtract it from the amount on my calculator so I always know how much I have left. Don't be afraid to put things back once at the register, try to avoid impulse buys!
  • Keep a price notebook. This will make or break whether you lose or save money when buying bulk. You need to learn your prices and figure out what is worth buying at Costco for your family, and what is better to buy at the grocery store. The next point helps illustrate this.
  • Space out the stocking-up. One thing to keep in mind is that the coupons usually run for at least a few weeks. If you can't afford to buy multiple quantities of something based on your weekly budget allowance, buy ONE…then go back and buy another the next week…then another the next week. Just space it out.
  • You need to learn to pick and choose. I used to buy almost everything on my list on Costco because it was convenient – one stop, large quantities, quality products, prices rarely fluctuate. However, since following my more strict weekly envelope budget, I have to pick and choose more.  Here is a perfect example:
I went to Costco the other day. As I mentioned before, I only have $100 per week to spend on groceries, so I knew that I would have to be careful going to Costco that week and that it would probably drain that whole week's budget. Because of this, I planned accordingly LAST week and stocked up on all my Walmart stuff I might need to hold me through this week.
At this Costco trip, I was stocking up on random, small items that I have been running out of.
Many of them were “want” items, and not “need” items…such as syrup, garlic, cooking spray,
chips, two-packs of milk,
seasonings, laughing cow cheese (great snack…and they had a coupon this week), and tortillas.

Why do I say they were WANT items?

  • Size. I didn't need a $6, double-huge-two-pack of syrup. I could've gone to Walmart and bought a small $1 or $2 container of it to get us through the next month or two. But, I wanted to stock up so I sacrificed that part of my budget. Same with the cooking spray, and milk. I could've bought just ONE gallon of each kind of milk from Walmart, but I made this choice.
  • Convenience. The Laughing Cow cheese is totally unnecessary. I already have sliced, block, cream cheese, and string cheese in my fridge. BUT…I like it because it's an easy, convenient snack for me, so since it's on sale and the coupon ends this week, I sacrificed that part of my budget and bought it.
  • Not do or die. The chips, tortillas, syrup, and seasonings especially I could have completely lived without this week. I even made taco soup the other night without taco seasoning…I just made it myself by looking online and using seasonings I had on-hand! BUT…I chose this week to re-stock the little stuff.
  • I'm stocking up. The syrup, tortillas, and cooking spray was a conscious “stocking-up” move. By buying the bigger packages, I now have syrup to last us for about the next year, cooking spray and tortillas for the next few months (I divide the package of tortillas up into 4ths or 5ths, put them in gallon ziplock bags, and freeze them – pull them out when I need more). I also put 3 of the 4 Laughing Cow cheese packs in the freezer, and they will last me for the next few months. I also stocked up on diapers and wipes:

There was also a coupon for Kirkland diapers and wipes that ends this week, so I saved room in my budget to buy 1 box of wipes, 1 box of diapers.

Now, here's the thing to note…

If you look at the picture below, you'll see that I didn't NEED the diapers – I wasn't OUT of them. I have an extra box of both diapers and wipes in my garage. However, by saving a little room in my budget and tossing in one box of each, that will last me through the weeks of no diaper coupons.

So all of that wiped out my $100. Actually, I went over a little and had to borrow from my OTHER budget, but I did that on purpose because I wanted to buy the wipes.

If I hadn't focused on the little items this week, I would've been able to buy more diapers and wipes. The other thing I sacrificed is shampoo/conditioner, and dog food. Dog food is $22 a bag and we're almost out, but I figure there's enough in there to last through the week so I'll buy it next week when my budget rolls over. With the shampoo/conditioner, I'm just using the cheap $.99 Suave stuff I have on-hand until I see a coupon come along for a kind I really like. My hair won't die if I have to use the cheap stuff for a month.

I hope that helped, Laurie!

Jasmine wrote:
“Hi Jordan,
I was wondering if you spend $100 per week for groceries for your family, and you said you usually do one bulk shopping trip (costco) per month, how do you figure that into your budget? I also only go to Costco about once a month, and I never leave there without spending at least $100. Do you borrow from your “other” budget for that week since you said to never borrow from the next week?
Thanks for the tips!
Sincerely, Jasmine”

Another set of great questions!

  • Since breaking my budget down into a WEEKLY budget instead of a MONTHLY budget, I have had to shop more…and shop less. Meaning, I shop more frequently, and spend less each time I go. I used to go 1x per month and spend $200+, but now I do what I did above and spend no more than $100 each time I go, and pick and choose what I buy from Costco and what I price-match or buy on-sale from Walmart.
  • Yes, this means I'm going to Costco more frequently each month (2x instead of 1x), but really, it hasn't been a big deal. More than anything it's helped me learn what things are worth buying from Costco (because it drains my budget much faster…but helps me stock up on things), and what's better to buy at Walmart (cheaper, but I have to cater to the sales and price-matching prices more, sometimes not as good of a deal as Costco but sometimes better).
  • Also, since cutting back on my Costco shopping I've learned that there was a lot I was buying there that I didn't really NEED, so it's saved me money in many ways in the long run!

Brandi wrote:

“I got a coupon in the mail for one entrance into Sam's club. I'm not sold on the whole buying in bulk yet, as it is just my hubby and I and we live in an itty bitty one bedroom apartment. However, I am wanting to take advantage of this and check it out to see what all of the fuss is about 😀
I did see your post, but there were so many things that were listed as ‘to start with these things' that I'm a bit overwhelmed.
We have a grocery budget of $65 a week, I am willing to eat from what we have for an additional week in order to take advantage of this deal, leaving me with a little over $100 to shop with.
The only freezer storage we have is over the fridge (right now there are a couple bags of frozen berries, some frozen juice concentrate and some corn I froze this summer). Everything else can be eaten before the free Sam's club shopping trip. What do you recommend I buy to make the best use of my one trip? Thanks! Brandi “

Great questions, Brandi!
Your situation is a little different, because it's just you and your husband with not much storage space. In all honesty…buying bulk from a place like Sam's or Costco for you right now might not be the best fit. Here are some things to consider:

  • You don't have to have a membership to Sam's or Costco to buy bulk. Most grocery stores now have a bulk section (albeit small, but they should have one nonetheless), so you can still try to find things in larger sizes when you feel it's something you use a lot of.
  • You could certainly get a membership, but just be very selective about what you buy. You probably don't need the Costco-sized pallet of toilet paper, even if it does save you $5/mo. You could buy a small pack on-sale at walmart and it would last you a month. However, things like bread, seasonings, cooking items like olive oil, detergent, and some other regularly used, non-refrigerated items might be worth the savings.
  • Really, what it comes down to is STICKING WITH YOUR BUDGET. If you can't afford bulk sizes right now, don't do it! Just stock up on regular-sized items when they are on sale (you can use my method HERE) and you'll build your stock-pile, without having to buy huge quantities.

In terms of that one shopping trip you get for free…

  • Stick with non-refrigerated items that will last you the longest, like my mini list I listed above (olive oil, detergent, etc.). Many times you can get a better deal on fresh items if you watch the sales at your local grocery store, PLUS it sounds like you don't have much freezer or fridge space which is a MUST with buying bulk produce and fresh items.
I hope that helps!

 Pam said:
“I retired last year and my husband will be retiring in December 2013.  We are going to be on a very strict budget at that time.  We have already had to cut back some since I retired.  My question is about budgeting for food. Is your trip to Costco part of the $400 you spend a month on food?  If it is I just don't see how you can do that.  I live in the Dallas area and food is really expensive.  I am spending around $600 and it is just my husband and I now (but one of our 3 children and their children will eat with us at least twice a week).  I have told all of them when Dad retires that may have to stop but I love them coming it just gets a little pricey.  I just have to be more creative with my meal planning to be able to feed them and when they all come we have 15.”

Great questions, Pam!

  • Yes, feeding a crowd can be expensive…but it doesn't have to be. See HERE for lots of cheap meal ideas for you to make when your family comes to visit. If one of your kids and their family eats 2x a week for you, have them help! Trade of cooking dinner, or have them bring at least the main course, at least 1/2 the time. You shouldn't have to foot the bill 100% every time, just make sure they are contributing – especially if it is going to effect your retirement. That's not doing anyone any favors! If you like your family coming, you just need to make cheaper meals. It's give and take – either you have your family come and you make it work within your finances come, or you make nicer meals and have them eat at their own house…and come over for dessert and games after. Give and take!
  • Yes, groceries are expensive…if you pay full-price. You say food is expensive in your area, which I completely believe. Depending on where you live does affect your food budget. However…is it so expensive because you're paying full-price for it? If you shop the sales or shop at cheaper places (even if it means driving 30 minutes to the nearest Walmart or discount store) then you will ultimately spend a lot less than $600 a month for just you and your husband. No matter where you live, you shouldn't be paying $600 a month for food alone for just two of you.
  • What it really comes down to is planning. You must must absolutely MUST plan your meals out in advance. You need to plan at least 1 week in advance, but it's easier on you if you plan 2 weeks in advance. Here's what that means:
    • Looking at what's on sale that week at your local stores
    • Planning your menu items around the store sales items,
    • USING WHAT YOU HAVE. Try to shop as little as possible and use up what you have. Then…
    • When you go shopping, buy a little extra of the items that can be stored in your pantry, or frozen. That way you have them on-hand (bought while on-sale, mind you…) so you don't have to pay full-price for them when you DO need them.
    • Don't waste ANYTHING. If it's getting soft, going bad, or you're getting tired of eating it…stick it in your freezer and use it later. Wasting food is the easiest way to waste money.

Wheew! I'm worn out! That was a doozie of a post!
Hope that helped all of you. Thanks for the questions, and good luck shopping!

*Note: for those of you who are still confused, or would simply like more help check out my budgeting program This program contains 27 videos, where I walk you through every aspect of your finances. It has helped thousands of Freebs change their financial situation for the better! Check out more HERE and use the code FCFBLOG to get 10% off! 

Thanks, and enjoy your day!

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  1. AvatarJessica Gtz says

    Hi I follow you o everything and no matter what I can’t stick to my budget we are a family of four and we earn $4300.00 a month so I do 400.00 + 200.00 a month and I’m always over and ener have any money left over to pay of the $5000.00 we owe in credit cards. Please help I don’t know what to do and I’m to the point that I can’t sleep

  2. Avatarsarah says

    the questions were all very interesting. my family spends $300 on groceries and household goods… this includes diapers, food and pet care, personal hyigene, etc. we often dont even spend the whole $300. we live in baltimore. i go to bj’s or costco once or twice a month. i stop by a cvs once a month, and whole foods once a week (cvs is next to my house and office, whole foods within walking distance from my office). we buy organic produce that is on the dirty dozen list, eggs, chicken, but only sometimes organic beef. we also buy produce in season. we do not meal plan, i just decide the day before what i’m going to make with what i have, though i think you need to be VERY familiar with cooking and your kitchen to do this, but its not an unattainable skill. my family also does our finances for entire quarters of the year at a time, so we are never blind sided. it has taken me 2 years to perfect this system. my point is, your grocery shopping can get this cheap, but know that achieving these type of goals requires accumulated knowledge and experience, so dont give up.

    • AvatarFunCheapOrFree says

      Sarah – thank you SO MUCH for sharing this comment, I am SO HAPPY to hear something like this! Would it be ok if I shared your story in a post?

  3. AvatarJamie says

    I just wanted to tell you how much reading this question and answer session has helped me. As someone who plans out meals, clips coupons and reads the sale ads, I was still overspending once costco was factored in. When you said that you have a weekly budget and CAN’T go over the budget, it finally started to click for me. I finally accepted that I cannot be completely stocked and have everything that I want when I want it (and that is OK!). But beyond just that, It helped me to realize that OTHER PEOPLE dont have it all either. (I mean, some people do, maybe, but they’re probably not reading this blog.). Thank you!

    • AvatarFunCheapOrFree says

      Jamie I love this comment so much! Thank you for sharing and for being so honest. I’m honored that I was able to help. Thanks for reading! XO

  4. AvatarMaureen says

    I keep the slush fund money from the grocery budget separate, and use it for Costco trips and CSA membership, rather than transferring it into the general slush fund of “found money” … It makes more sense to me to use it as budgeted …
    The most important tip you offer is to shop once per week … Even if it means shopping at more than one grocer to take advantage of sales, you must do it all in one day … This has done wonders for my budget and more importantly to me, curtailed our food waste … As I shop on Friday, Thursday evening meals are usually comical & creative!


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