What a $200 Costco Trip Really Gets You in Retirement
Living on a fixed income often means that every grocery trip has to work harder.
Shopping at Costco can stretch a $200 grocery budget. However, retirement experts say the real value depends on when you buy, what you buy and how much you realistically use.
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Here’s how you can make your $200 go further.
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Spend It at the Right Time
Stretching retirement income means when you spend the money matters just as much as when it comes in, said Jason Gerstenberger, an insurance broker focused on retirement income.
“Income arrives once a month, not every two weeks,” he said. “A working family only has to float a big Costco trip until the next paycheck, whereas a retiree floats it until next month.”
Shop for How You Live
Someone who cooks most meals at home can spend $200 very differently from someone who gets most meals through Meals on Wheels.
Melanie Musson, a retirement finance expert with Quote.com, said home cooks may be better off putting that money toward items they already use, such as frozen chicken, olive oil and spices, while retirees who get most meals elsewhere have different needs.
“Some of the best buys at Costco are toilet paper, dairy products and baking staples,” Musson said. “So, if a retiree will use up the items in these categories, buying them at Costco is a great way to get the most bang for your buck.”
Find the Biggest Savings
When asked Gerstenberger to pick where retirees can find the biggest value at Costco right now, and he’d start with protein. Using Bureau of Labor Statistics data, he said Costco’s ground beef and rotisserie chicken were the “two clearest wins against the national average.”
After that, Gerstenberger recommended buying things you use every month that don’t spoil, such as paper goods, coffee, oats, rice, and canned goods.
Don’t Let Bulk Become Waste
A large package of apples may look like a bargain until part of it ends up in the trash.
However, if you prefer buying fresh produce, bakery items and other perishables from Costco, you can find the most value on a $200 budget when you focus on quantities you can eat, freeze or store it before it goes bad.
“Before you spend money on a bulk purchase, figure out how much you could really save,” said Paul Ferrara, senior wealth counsellor at Avenue Investment Management. “Calculate the price per ounce, pound or piece and compare it with the price of a smaller package.”
Use It to the Last Drop
“Good to the last drop” isn’t just a coffee slogan.
Gerstenberger said spreading $200 across too many categories can leave a smaller household with more bulk packages than it needs or has room to store.
He recommends concentrating the money on a few larger purchases that offer meaningful savings and will actually get used. That way, the value comes from what makes it into the household routine, not simply from leaving Costco with a fuller cart.
“I would rather see somebody buy four or five things that they will use to the last drop,” he said.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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