3 Ways Costco Can Inflation-Proof Your Budget

Inflation isn't the sort of thing many of us think about regularly -- or at least it wasn't until a few years ago. But in 2021, inflation started to pick up, partly as a result of the government's generous stimulus policies. That year, Americans found themselves flush with cash thanks to stimulus checks and a boosted Child Tax Credit. And what did they do with that money? In many cases, they spent it.

That was actually what lawmakers wanted to happen. The economy needed a boost following the beating it took in 2020 due to the COVID-19 pandemic. But because consumer demand rose so much in 2021, the cost of goods and services increased exponentially, leading to sky-high inflation throughout 2022.

Thankfully, things have calmed down a bit since. In May, inflation was only up 3.3% as per that month's Consumer Price Index, which measures changes in the cost of consumer goods and services. But inflation is by no means a limited-time problem. It's a perpetual part of the economy, and it won't be going away -- ever. So it's important to do what you can to inflation-proof your budget as much as possible. And one tactic that might work is holding onto a Costco membership. Here's why.

1. You can expect to pay $1.50 for a hot dog and soda for the foreseeable future

Costco introduced its $1.50 hot dog and soda combo almost 40 years ago. But you've probably noticed that the price has held steady since then. Costco could've easily raised the price of that food court meal many times over through the years. Instead, it intentionally kept the price steady to benefit customers and draw them in to shop. And chances are, it will continue to do so for the foreseeable future.

On Costco's most recent earnings call, CFO Gary Millerchip was quoted as saying, "I also want to confirm the $1.50 hot dog price is safe." So you may be able to enjoy that deal for many more years to come.

2. You can expect membership fees to hold steady for years

The last time Costco raised the cost of its membership fees was June 2017. So it's officially been more than seven years since members had to pay more than $60 for a basic membership or $120 for an Executive membership to shop at the store.

Costco's normal schedule for increasing membership fees is every 5.5 years or so. So at some point, a fee hike is likely to happen. But chances are, many of your bills increase on a yearly basis. So the fact that you'll generally get a five-plus-year reprieve from paying more for Costco is something you can take comfort in if you're worried about inflation.

3. You can save enough with Costco's low prices to offset increases elsewhere

Inflation commonly drives many expenses upward, from groceries to gas to housing. But because Costco offers such low prices on the items it sells, you may be able to save enough money on your shopping that you're able to more easily cover other bills that increase.

For example, let's say that after deducting your membership fees, you save $300 a year by shopping at Costco. If your rent goes up $50 a month in a given year, you've just managed to cover half of that increase.

Inflation is something consumers just have to deal with. Much of the time, it isn't that noticeable. But it's a good thing to have strategies to fight it. And joining Costco may be a surprising one you can rely on.