Warehouse Clubs: To Join, or Not To Join?

A friend of mine who blogs at The Eatdown asked this:

Since you brought up Costco… I was thinking about biting the bullet and getting a membership. Would you recommend this? Only for certain items or what?

Excellent question. Actually it brings up two questions. Should you join a warehouse club? And if you do, which one should you join?

SHOULD YOU JOIN A WAREHOUSE CLUB?

PROS AND CONS

PRO: You WILL save money. Possibly in ways you never expected.

Buying in bulk undoubtedly saves money. If you have the room to store 30 rolls of toilet paper or several large jugs of spaghetti sauce, you’re going to get a good deal. But warehouse clubs deal in a lot more than that. You can find furniture, appliances, flooring, clothing, electronics, and more. I recently got a Whirlpool refrigerator at Costco for roughly half the price of similar models at other stores. And the “more” can be really interesting from time to time. For instance, Costco is carrying gift cards this Christmas season for several specialty stores, such as Godiva, at $39.99 for $50 worth of gift cards. This is a FANTASTIC deal, and one you can really take advantage of when Christmas sales and gift-with-purchases kick in; you’re getting twenty percent off before you even walk into the store.

(In interest of full disclosure, I DO have a hobby job at Godiva; there are other, different gift cards available, mostly for online concerns, but Godiva is the one that’s sticking in my head because I’ll be able to combine that initial twenty percent with my usual employee discount! BOOYAH!)

PRO: Clubs are ideal for people who use tons of ONE THING.

If you aren’t a parent, that pro may not jump out at you. Just let me say that buying diapers and wipes at Sam’s Club saved me my membership fee in four trips. If you entertain a lot, if you’re a small business owner, if you bake enough to wish that flour came in bigger bags, then you really need a warehouse club membership.

PRO: Warehouse clubs totally satisfy the freebie lover.

Seriously. They’re always sampling. If you come by in the evening, you’ll be disappointed — they’re out of everything by then — but usually (lunchtime is best) you can walk out with a nearly-full stomach without spending a dime. If you aren’t QUITE full, you can go to the little cafeteria they all have and get insanely cheap pizza or hot dog combos. Many are the weekend lunches we’ve had composed of  bits of lobster salad, hot wings, spinach ravioli and energy bars, topped off by the ubiquitous Polish sausage-onna-bun-with-fountain-drink.

CON: If you have very little space, this may not be for you.

Sure, you can still save a bunch on clothes and furniture, but you won’t get much of a benefit from the main attraction of warehouse clubs if one large bag of frozen chicken takes up your entire apartment-scaled freezer. If you lack storage space, consider carefully why exactly you want the membership.

CON: Infrequent shoppers don’t really save.

If you want the membership to really work for you, you need to save enough over the course of the year to cover that membership fee and then some. If you only shop once or twice a year — say, to get that giant box of frozen appetizers for your New Year’s party — then you probably aren’t getting your money’s worth. Of course, some people want it just to have occasional access to giant sizes, and don’t really care if it’s profitable. I know you’re smarter than that, right?

WHICH WAREHOUSE CLUB SHOULD YOU JOIN?

I have experience with all three warehouse clubs currently in operation in the U.S.: Sam’s Club, BJ’s, and Costco. My first club was Sam’s, as it was the only one in the area at the time. When BJ’s opened a half mile from Sam’s, we got a trial membership, and then decided to keep both, as they were useful for different things; I’ll go into the differences shortly. When Costco came to town about a year and a half ago, we gleefully ditched both BJ’s and Sam’s and joined.

SAM’S CLUB

What can you say? It’s WalMart writ large. VERY large. If you’ve never been in a warehouse club, they’re hard to describe; giant warehouses with huge products and a center section that shows they’ve realized that smaller items like clothes and DVDs and seasonal items like Christmas lights sell very well. It isn’t bad, but the extremely low diaper prices that originally made this one the shining star for our family have been eliminated. You’ll still save on diapers, but not the jaw-dropping amount that we used to save. It’s fine, especially if it’s the only one in your area.

BJ’s

Of the three, this is the one most directed towards individual consumers and families, as opposed to small businesses. Their grocery is outstanding, and you don’t HAVE to buy meats and produce in restaurant-geared packages. They even have a deli, something that neither of the others have. If you’re a bit panicked by the thought that everything in warehouse clubs comes in doghouse-sized containers, this may be the place for you. Of course, it’s also the smallest chain, so you may have trouble finding one. Our BJ’s just closed; I’m pretty sure the local advent of Costco spelled their doom.

DOOM I TELL YOU!

COSTCO

This is the largest chain, and the best overall. It has a lot of similarities to Sam’s, but for some reason they just do everything better. Prices, selection, customer service. We switched when Costco came to town because of the good experiences our respective families had with it, and we haven’t regretted changing. We buy our gas there because they consistently have the lowest prices. The only negative I’ve ever encountered there is that their deli meats mojo is weak: packages are large, selection is small, and prices are exorbitant.

I’m a wholehearted supporter of warehouse clubs, but I’ve always been a hoarder at heart. Miserly? No. Even the Bible approves:

In the house of the wise are stores of choice food and oil,
       but a foolish man devours all he has.  — Proverbs 21:20

That means it’s smart to have a little more than you immediately need. In addition to an emergency savings account, it means you’re never one paycheck away from starving. That’s always had a priority for me, for some reason. So, in conclusion, if you want to stock up, want some discounts, or even just want a place to graze for a free lunch on Saturday afternoons, warehouse clubs are a good deal. Even if you’re a starving college student, you may want to consider pitching in for a membership with your friends or roommates, and splitting large packages. If you have a 20-pound bag of rice in your kitchen, you at least can rest assured you have something to eat.

 Anyway, I’m really glad I have a membership. Do you have an experience or insight that you’d like to share?

Pennywisdom is written by Amy Heider Brown.

How to Keep Your Money, Part 1: Don’t Use Your Debit Card

If you want to avoid hemorrhaging money the way Bruce Willis leaked red-tinted corn syrup in Die Hard, then really, you need to have a budget. But that isn’t what we’re going to talk about today. We’re going to start small with discipline, and take small steps. The first step is putting away your debit card.

“But Penny!” you exclaim somewhat inaccurately (Penny isn’t my name, but given then name of my blog, I might as well go with it), “What’s wrong with a debit card? It’s just accessing my bank account! It doesn’t even cost me anything!” And there, my friend, you would be wrong. As wrong as Hans Gruber, to extend the Willis-movie similes.

First of all, check your bank statement. Know what your fees are for. Some banks do carry a charge for you having the convenience of a debit card. Hm. They charge you for saving them the trouble of taking out your money through a teller. Thanks, banking industry! Of course, even if they charge, you may decide it’s worth it to keep the convenience of being able to take out money at any time. I certainly can’t argue with that.

The first big problem with debit cards is that they make us sloppy with our money. The convenience is really, really tempting. If I use my debit card at WalMart, for instance, and you ask me five minutes later what the total was, I really wouldn’t be able to tell you. What did the total matter? I just swiped my card and it went away, like Hans disappearing out an open window.

Okay, I’m really going to stop with the Die Hard references now.

Now, if I have cash from my grocery budget in my wallet and I use that to pay for my purchase at WalMart, you can bet I’ll know the total. Nothing gives you a cold slap of reality like handing over $125.48 to the clerk, realizing that that was a quarter of your food budget for the month. It really makes you think twice about whether you actually needed all the things you tossed into the cart. I’m looking at you, Shrek the Halls DVD with Shrek beanie. Sheesh.

But that’s not the only problem with debit cards, just the biggest and most nebulous one. The second big problem is hidden fees.

We already talked about the possibility that you’re charged just for having the card. The other fees can be broken down into two categories: the fees other banks charge you for using it, and the fees YOUR bank charge you for using it. Usually, you’re getting hit by both categories at the same time.

Be honest. How often do you actually use your card at one of your bank’s ATMs? Do you go out of your way to hit your bank for cash, or do you just stick the card into any machine handy? Every time you use an ATM not owned by your bank, you’re paying a fee. Sometimes a pretty hefty one. And at least the other bank’s machine is nice enough to tell you that fee up front. Adding insult to injury is the fact that your bank is probably adding another fee that they don’t tell you about.

This is where checking your bank statement becomes important. Check to see if your bank is adding charges (mine charges $1.00) when you use a different ATM. I used to congratulate myself for getting cash back with my purchase at fee-free places like WalMart or the grocery store; that warm, smug feeling pretty much disappeared when I realized that my bank was slapping charges on those withdrawals as well.

Let’s take a worst-case scenario, and see how much money tossing around your debit card can cost you in a month:

Let’s say you take out some cash every three days or so, just enough to keep you going. Let’s say you’re really careless and never use your own bank’s ATMs.

10 ATM withdrawals: $25 in service fees from other banks, $10 in fees from your bank

Cost: $35

One overdraw, buying something before your paycheck clears, but you weren’t keeping track of the money in your account… Whoops!

Cost: $30

You use the debit card at the gas station, and the bank arbitrarily puts a $75 hold on your account for UP TO THREE DAYS (this has happened to me!). You try to use the card elsewhere, and guess what? You’re short!

Cost: Priceless.

In other words, THESE THINGS ADD UP.
To sum up, here’s a good way to save money: Get cash out of your bank account once or twice a month, at YOUR bank. Figure how much you’ll need. You can get more later if you have to, but the idea is to keep the damn card in your wallet. Only use the card at your bank, for really large purchases that you’d be insane pay for in cash, or for budgeted items (For instance, our gas is always cheapest at Costco, but they don’t take cash. We budget on leaving the gas money in the checking account for that reason.).

 

Your wallet will thank you. And that’s just a little thing! Imagine how good your wallet would feel if you got rid of the credit cards!

Okay, I promised myself I wasn’t going to scare you that bad just yet. Small steps.

Yippee-ki-yay.

Making MyPoint

Do you get email? If not, how are you even reading this page?

Do you have a separate account that you use when signing up for something you know will generate spam? You should.

Do you wind up getting a lot of junk anyway?  Of COURSE you do.

So why aren’t you getting paid to open some of it?

Yes, yes, the concept of reading mail for money is one of the oldest scams on the internet. Lots of sites tried and failed through the internet boom to make it real. Only one, the great granddaddy of them all, is still up and running, and yes, GIVING YOU FREE STUFF for reading their emails.

It’s called MyPoints. The premise is as old as the internet itself: Get an email. Open it. Click on the link at the bottom. Get points. If you use the offer in the link (anything from taking a survey to changing your car insurance), you may get more points. You can also get points per dollar spent shopping through links to sponsored sites. When you get enough points, you turn them into rewards in the form of gift cards, from an impressive list of over 70 companies. And not just from lame e-tailers you never heard of, but from Amazon and Macy’s and Williams-Sonoma. I’ve cashed out about $400 worth of those points, and I’ve been REALLY lazy about opening the emails over the years.

I’m making this my first Free Stuff post because right now is the best time of year to rack up points. Entering into the holiday season, depending on the interests you’ve given them, you’ll get 5-10 emails a day that will deliver about 5 points apiece. Shop through the site (as long as you’re shopping online anyway) and you’ll get even more. You may not get enough points to cash in this holiday season, but considering that, say, you can get a Red Lobster $10 gift card for 1400 points, a yuletide redemption just may be possible.

Joining is easy. Just go to MyPoints and sign up. Or, if you’re grateful for the suggestion, email me at alderaan@gmail.com, give me your name and email, and I’ll refer you (Hey, I’m collecting points too! Referring up to five friends a month also nets you points. Make sure they’re friends who want it.).

Caveats about MyPoints:

• Don’t feel you NEED to take them up on their offers if you aren’t interested. Scam sites try to force you into it. MyPoints offers you lots of points, but chances are you’ll spend a lot more than you save. Clicking on the box in the email and visiting the site is all you need to do, and those 5-point clicks add up fast.
• DON’T play MyPoints Games. They require real money. You aren’t that dumb. I know you. By the way, your mother says you never call.

If you’re reading this at work, you have more than enough time to open several emails a day and get free stuff. Now go forth and click.

The Term “Cheap” Is So… Well… Cheap.

I’m a pretty normal person. Married, mortgage, one child. But I have a dark secret. I’m thrifty.

I’ve clipped coupons, taken surveys, shopped at scratch-‘n’-dent groceries, and even dived into dumpsters. I’m by no means the tightest wad out there, but while I’ve never really pinched a penny until it screamed, I’ve certainly taken great pleasure in making one whimper on occasion.

I am a thrifty person. Just don’t call me cheap.

I’m doing this blog to share the best ways I’ve found to save money, to save effort, and to get stuff for free. If any given entry I write makes you roll your eyes and go “Well, duh,” then congratulations! You’re thrifty too, and probably internet-savvy as well.  I’m trying to do this for everybody, especially people who may be jumping on the thrifty bandwagon for the first time due to recent economic unpleasantness. So join me on my gently-used magic carpet ($35 on Craigslist, and I only had to have it cleaned twice to get rid of all the cat dander), and let’s go on a thrifting adventure! Bring small bills. Your debit card carries too many hidden charges, but that’s a different post.