Many of us have a Sam’s Club or Costco in our neighborhood, and we frequently hear stories of how friends of colleagues saved a boatload of money on purchases there. But sometimes buying in bulk can be a challenge—you have to strike a perfect balance of buying in bulk without wasting any money.

Last year, the Motley Fool reported that the average American wastes $640 per year on uneaten food. Seeing as the majority of U.S. adults have less than $1,000 in the bank, buying in bulk and tossing excess food can be a financially dangerous habit, especially when you’re at a warehouse club and see the low prices for large volumes of food. 

To be clear, buying in bulk has its benefits and isn’t always a waste. According to the U.S. Department of Agriculture, you’ll typically save up to 12% on meat, 11% on dairy and produce, and 6% on grains by purchasing these items at warehouse stores. If these are items your household tends to eat regularly and you can beat the clock on the expiration date, then you might save some money by purchasing them in bulk. But in many cases, you won’t actually snag a better deal at the warehouse club than you will by waiting for a good grocery store sale.

When deciding if you want to buy something in bulk, ask yourself these questions to help understand if it’s a good financial decision:

1.     Is this item something my household eats on a regular basis?

2.     Is this item on sale at a grocery store in a smaller quantity at a better price?

3.     Do I need this item now, or can it wait?

4.     Can I store what I’m about to purchase?

5.     Will I use this item before it expires?

  
Generally, if you can answer yes to the questions above, it’s likely a good financial decision to purchase the item in bulk at a warehouse club. If you respond no to any of the questions above, it might be worth reconsidering the purchase.