3 Reasons to Keep Your Costco Membership -- Despite the Fee Hikes

Well, it was bound to happen. After a good seven years of holding fees steady, Costco has finally announced that starting Sept. 1, 2024, the cost of a membership is set to increase.

Right now, a basic Costco membership costs $60 per year, while an Executive membership costs $120. Beginning Sept. 1, a basic membership will cost $65 a year, while an Executive membership will cost $130.

At first, you may be inclined to say "see ya, Costco" after hearing this news. Nobody wants to get stuck paying more for any given service at a time when life has gotten so unbearably expensive. But here's why it pays to keep your Costco membership despite the higher price tag.

1. The increases are fairly small

It would be one thing if you were looking at paying $5 or $10 more per month to keep your Costco membership. That's a pretty big increase, and one that could put a strain on your budget.

But the aforementioned increases are annual ones. This means that when you break it down, you're paying about $0.42 more per month for a basic Costco membership and $0.83 more per month for an Executive membership.

At a time when costs are elevated, it's true that every dollar counts. But here, we're not even talking about $1 per month. Chances are, you won't notice the financial impact of paying $5 or $10 more per year.

2. Your savings might well outweigh the extra money you're spending on a membership

While you might spend more to keep your Costco membership starting in September, the savings you get from your membership might more than make up for the extra $5 or $10.

Take a common household item like ibuprofen (the active ingredient in Advil). A 1,000-count bottle costs $13.99 on Costco.com, and in-store prices are usually even lower than online prices. To buy the equivalent amount of ibuprofen, you might spend close to $75 at a regular supermarket. So in that case, you're looking at saving $61 on one typical household purchase alone.

Now, multiply that savings by the various Costco items you buy. To put it another way, if you shop at Costco every week during the year and save $10 on groceries and household essentials by doing so, you're spending $520 less all in. Even when you subtract the $65 or $130 a membership will cost starting in September, you're ahead financially.

3. If you cancel your membership, you'll probably just spend the money elsewhere

You may be hesitant to give up any amount of extra money right now. But chances are, in the course of a year, you're going to find a way to blow that extra $5 or $10. And it's not because there's something wrong with you or the way you manage your money -- that's just life.

A rushed morning might make it so you're unable to pack lunch for work, forcing you to spend $11 to pick up a sandwich at a deli that's close to your office. Or, you might buy one extra latte on a morning you're feeling particularly tired and cold, and there goes $5 and change.

It's one thing to cut back on an expense that's costing you hundreds of dollars per year and bank the difference. But be honest with yourself. If you cancel your Costco membership, will you really be adding the money you save to your savings account? If not, then you might as well continue to shop at the store so you can spend less on the items you buy all the time.

If you were already thinking about canceling your Costco membership -- say, because you hardly ever go anymore or tend to throw out food you buy in bulk -- then news of a fee hike may be just the thing that prompts you to take action. But if you're enjoying your Costco membership and plan to continue maximizing the savings you reap there, then don't let a slightly higher cost keep you from sticking with it.