Got an Extra $65? This Could Be the Best Way to Spend It at Costco

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A lot of Costco shoppers are on a tight budget . Stubbornly high inflation is pushing a lot of people to their financial limits, forcing them to think carefully about the purchases they make -- even in the context of everyday items like groceries and cleaning supplies.

But if you can find an extra $65 to spend at Costco , there's one specific purchase it pays to make.

An upgraded Costco membership could work wonders for you

The current price difference between a Gold Star membership at Costco and an Executive membership is only $60. But starting Sept. 1, you'll have to spend $65 more for the upgraded membership. Beginning next month, a basic Costco membership will cost $65, while an Executive membership will cost $130.

If you have an extra $65 to spend at Costco , you may be interested in using it to load up on extra items for your fridge or pantry. But a smarter move could be to pay to update your membership.

The great thing about Costco's Executive membership is that it gives you 2% cash back on your purchases. Over a year, that could result in a lot of savings if you shop at Costco regularly.

Let's say your weekly Costco haul amounts to $100, and you shop at Costco 50 weeks out of the year. That has you spending $5,000 in total and getting $100 back from your Executive membership. That $100 can easily cover your $65 upgrade fee and leave you ahead by $35 compared to sticking to a basic Costco membership.

Even if you only shop at Costco every other week spending $100 per trip, that's still $2,600 over a year. If you make some larger one-off purchases at Costco, that could get you beyond the $3,250 a year it takes to break even on the $65 Executive membership upgrade cost. So even if you only spend $3,260 a year, the higher-priced membership still makes financial sense.

Costco provides a membership guarantee

You don't want to spend an extra $65 on an Executive membership only to not accrue enough cash back to make up that fee. But thanks to Costco's more-than-reasonable membership downgrade policy, that's not something you have to worry about.

If you see that the Executive membership isn't working out for you, you can downgrade to a Gold Star membership, no questions asked. Costco will refund you any portion of the $65 upgrade fee you didn't make back with the 2% reward.

Let's say you only spend enough to earn $50 back through your Executive membership. When you downgrade, you'll be refunded $15 so you're made whole on your $65 upgrade fee.

For this reason, it pays to invest an additional $65 in an Executive membership if you shop at Costco on any sort of regular basis. In a worst-case scenario, you'll get that money or a portion of it returned to you if you don't make enough money back. And in a best-case scenario, you'll end up with extra cash in your pocket you can use to pay for future Costco purchases or anything else you might need.

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