Aldi vs Costco vs Walmart

Some of my favorite bloggers have written about groceries in the past:

  • Mr Money Mustache (link)
  • Justin at Root of Good (link)

Mr Money Mustache concludes that Costco is great. Justin at Root of Good concludes Costco is for chumps and that WalMart prevails as low cost leader (with Aldi to supplement).

Justin is as smart of an individual as I’ve seen on the internet and one of my favorite bloggers. When he comes to a conclusion that contradicts my priors, I step back and wonder where I’ve gone wrong. Ever since reading that article of his a couple months ago I’ve been dying to know whether my intuition was correct (that Costco was a good deal) or whether Justin was correct.

What further sparked my curiosity is that I’ve heard many people rave about Aldi recently, the peculiar German grocer known for charging its customers for bags and requiring a 25 cent deposit in order to use a grocery cart. In particular, my brother told me a few days ago that he and is wife are dropping Costco in favor of Aldi because they didn’t find Costco to be a particularly good deal (and it’s located 8 miles from their house while Aldi is much closer). Further, the folks at ChooseFI have raved about Aldi. They’re smart dudes, so I used this activity as an excuse to take my first trip to Aldi.

My wife was kind enough to accompany me on this experiment. It was a fun date.

I forgot to take a picture at Aldi, but here is a picture of their shopping carts. You push your cart through the store with the chain dangling like that, as if you have just broken out of prison.


Distance from home:

Costco: 0.3 miles (though in four previous states we’d drive up to 15 miles)
Walmart: 1.6 miles
Aldi: 2.2 miles


First impressions:

Costco: Home, sweet home. Love the organized chaos, the samples, the cleanliness, and the friendly employees. Shoppers appear high income. Store definitely caters to the wealthy with high end furniture, electronics, clothing, etc. Gotta love the juxtaposition of the luxury ($150k diamond ring) alongside the $1.50 hot dog & soda.

Walmart: Put a bullet in my head this place is depressing. A low frequency humming in the HVAC system almost drove me insane. The act of pulling into the parking lot made my soul hurt. Shoppers appeared incredibly downtrodden and unhappy. The cashier was friendly, the saving grace of our trip.

Aldi: At first, I saw the carts outside and thought I could take one for free. There wasn’t a security guard watching them and they appeared to be free to take despite the rumors of the 25 cent deposit. Then I saw the comical red chain on the handle. The store is TINY, which is good and bad. Good in that you can get in and out easily. Bad because their isn’t much variety, and bottlenecks caused by other shoppers are really common due to the tiny aisles. The clientele appeared really happy. What in the world is with their random retail aisle? I have never seen a more random assortment of products in my life.



We chose generics when available (sometimes not available at Costco). We chose products we buy often (we’re mostly vegetarian so few meat prices). We chose non-organic when possible, though Costco is making this increasingly hard to do. We chose largest quantity at each store to minimize the price per unit. This was a non-issue at Aldi and Costco whose sizes are small and gigantic, respectively. With Walmart it mattered, and unsurprisingly the unit price was always considerably lower for the larger size. I marvel that people ever choose the smaller size with the significantly higher unit price. Brings back memories to when I was a young kid and would calculate the unit price of grocery items while my mother grocery shopped back before it was formally calculated for you.



Price per unit is shown in first three columns. Yellow highlighting indicates organic (non-organic option not available). Next three columns calculate the % over the lowest price. Green cells are those within 7.5% of the minimum. Red cells are those more than 20% of the minimum.



Excel file downloadable here (link):



To me, the math says that Costco reigns supreme victor for the type of shopping we do (healthy-ish + bulk). Costco primarily lost to the other two primarily when it only offered organic while its competitors didn’t. However, I was pretty impressed by Aldi. It was a formidable opponent to Costco in produce & canned products. But Costco dominates Aldi in the nut department, grains, and cheese. Produce & dairy (milk/butter) wise they were pretty comparable. I will probably buy salmon from them from now on, which is probably the only actionable change resulting from today.

Walmart is hell on earth. But we brave the inferno a few times per year to stock up on unsweetened applesauce, whole wheat pasta, and non-organic tomato stuff. We usually buy the entirety of their inventory in these items every time we go to minimize our time in that store. I chuckled at the signage in the grocery section indicating that they were perceived to be the low cost leader in groceries by residents of our state. Apparently residents of our state have a bad perception of reality.

Costco + a quarterly Walmart trip is what we’ve been doing since we first started dating, and today’s experiment reinforces that we’ll keep doing what we’ve been doing.



Costco requires membership, though if you spend at least $5,550/year (110/0.02), you make up the entirety of the fee. We in fact surpass this spending amount easily and get a refund check of about $200 each year.

It’s hard to compare the quality of Aldi’s vs Costco’s vs Walmart’s house brands. To be candid, I haven’t tried Aldi’s house brand, but I’m positive Costco’s brand is higher quality than Walmart’s.

Costco sells cage-free eggs which drives up the price. Knowing the disparity in prices between Costco’s eggs and Walmart’s, I have the moral dilemma if I should save a few pennies at the expense of chicken suffering. In many instances, Costco makes that moral decision on behalf of its consumers. I’m not sure where I stand on the issue. My father in law raises chickens. They appear to be of the dumbest creatures I’ve ever seen. But the thought of having to spend the majority of one’s life in a cage is depressing. I can’t say that I feel particularly bad about overpaying for eggs at Costco, especially when doing so saves me an extra trip to another store.

Costco requires purchasing in bulk. With our family size (5 kids), this is a non-issue, and in fact preferred. Even when my wife and I were dating we would shop at Costco and freeze stuff (bread, cheese, etc), so Costco can definitely work with smaller families if you’re smart. But if you don’t want to go through the nonsense, Aldi isn’t too bad.


Funny story:

At Aldi, we were cartless and bought salmon. The cashier put it in the cart adjacent to her (which we had NOT paid the deposit for) after checking us out. I assumed she intended for us to use the cart to take our order out of the store, and that I had just scored a free quarter in the process! I was elated! My elation only lasted 3 seconds until she chastised me for taking her cart. I guess she put our order in the cart for us to then pick up by hand. Lesson learned. The checkout process at Aldi was hilarious. A bunch of people either buying a hodge podge of bags or using old ones from Walmart or elsewhere. It seemed very inefficient from a time standpoint (but I get that reusing bags is good for the environment).

Not-so-funny story:

We started off in Walmart by price checking their produce, in which they were annihilated by Costco (who we had visited first). I almost quit the experiment at Walmart thinking it was futile, yet we persisted. I spent the rest of my Walmart trip wondering if the clientele were mindless drones who were bad at math.

Financial Update Dec 2017

Another month, another update. A few random comments.

Good Reads/Listens/Watches

  • Sebastian Thrun on Machine Learning & AI.
    • Found through “TED Talks Daily” Podcast. Youtube link here:
    • Sebastian is optimistic on the future of AI unlike many others. I liked the following quote: “Today 75% of us work in offices and do repetitive things. We’ve become spreadsheet monkeys. And not just low-end labor, we’ve become dermatologists doing repetitive things, lawyers doing repetitive things. I feel we’re at the brink of being able to take an AI [to] look over our shoulders, and make us maybe 10-50x as effective in these repetitive things.”
  • Comically tragic WSJ article of people losing access to their Bitcoins
    • James Howells, an IT worker in Newport, Wales, lost 7,500 bitcoin he mined in 2009 after a hard drive with his private key was accidentally thrown away during an office cleanup. His story went viral this month as the value of the hard drive’s contents rocketed to more than $100 million. Now he’s attempting to excavate the landfill and dig through four years’ worth of trash to find it.
  • Jonathan, the pharmacist at ChooseFI, is quitting his job to work on the podcast full time. Thought it was a pretty interesting episode:
  • Warren Buffet finally won his 10 year, $1M wager in which he pegged the S&P500 index against any hedge fund.


  • I taught a 90 minute personal finance lecture for a friend’s class comprising of a dozen soon-to-graduate grad students. Here was a note I received from one of them:
    • That was without a doubt the most interesting lecture of the fall semester. I wish someone would’ve taught me this during undergrad or graduate school studies. I appreciate you giving us a nudge in the right direction! I’m excited to maximize my savings and wealth once I start working full time. Thanks again for coming and speaking with us… I really enjoyed it.
    • For the life of me I can’t figure out why the basics of personal finance aren’t taught in K-12, undergrad, or grad school. Why are university systems sending recent college graduates (undergrad + grad + phds) into the world without arming them with the understanding of what an index fund is, what the difference between a Roth & trad IRA is, and the mechanics of how a progressive tax code should shape their decision making?
      • Perhaps I’ll eventually expend the personal capital to convince my department to let me develop and teach that course.
  • For some reason (I was an idiot) I had dragged my feet on enabling two-step authentication on my investment accounts, fearing it would interfere with account aggregators like Personal Capital. I enabled two-step authentication this month on all accounts. Personal Capital works just fine with two-step authentication. You simply add the second step token within Personal Capital.
    • Everyone should enable two step authentication on all investment accounts.
    • I found this site helpful for navigating sites where it wasn’t obvious how to turn on:
  • Took advantage of the free Global Entry membership (usually $100) using my BOA Premium Rewards Card. They allow one credit every four years.
  • Started climbing at the university gym. Easily one of my favorite things to do. Such a fun combination of strength, strategy, and endurance. I took my wife and 5 kids one Saturday. I need to do that on a weekly basis.
  • Continued biking to work in 20-30 degree weather. Had wind gusts of up to 30-40MPH one day. Luckily most of the time the wind is at my back in the evenings making for a quick ride home. I drove one day this month and instantly regretted it. I’m convinced that bike commuting highly correlated with happiness.
    • A friend forwarded me a link to this running/biking visibility product, which is like battery operated blinking glow-sticks for your body:
      • 2 weeks into owning the product and I’m a fan. I purchased it to improve my side visibility as well as provide an extra layer of redundancy in my lighting in case my primary lights die.
  • My wife and I took advantage of free skin cancer screening: My wife’s primary care physician recommended that she see a dermatologist.
    • I highly recommend the program. A participating physician wasn’t available in our home state so we went to one while on Christmas vacation out of state.
    • Upon returning home, my wife is going to follow up and get a mole removed and biopsied as a preventative measure.
      • One of her brothers had melanoma in his 30’s but detected it early enough to survive unscathed. Skin cancer is terrifying.

This month’s finances

  • The good:
    • Crossed $500k of net worth. Though an arbitrary milestone, it feels good to be growing that number month after month.
    • Followed my own advice to save over $1k in 2017 taxes. If we were not in AMT territory, we would have benefited an additional $3k through early payment of 2017 property taxes. Bummer.
      • Prepaid next month’s mortgage payment to save $300 in taxes next year. 5 minutes of work for $300 in savings is a pretty good ROI.
  • The bad:
    • $2,500 insurance deductible for deer + $120 check engine light investigation at dealer ($500 car rental showed up last month).
    • A neighbor’s friend knocked over our brick mailbox. We repaired it for $850 and the driver refused to get insurance involved. After much pestering them they coughed up half while still refusing to involve insurance. I was convinced by smart friends to not pursue the matter further and file a police report.
      • A wise friend told me recently that he budgets around $500/year in people screwing him over. That way, when he is screwed over in real life like we all are, it doesn’t upset him. It’s known as “mental accounting.” I think there is a lot of wisdom here.
    • Spent $400 on a Crocs order (20 pairs of shoes which should last our family another few years).
      • Have I mentioned we like Crocs?
      • I might be a hoarder.
    • Splurged on two $90 MoviePasses from Costco:
      • We have several family members with passes and they all rave about them. I’ll update later with our experiences.
      • The local theater a mile away from our house participates in the program, so that should be a cheap and easy date. Looking forward to it.
    • High restaurant expenditures is deceptive. We purchased fifteen (7 for us, 8 for gifts) $8 cow calendars from Chick-fil-a.
      • They give you a “freebie” every month which is usually pretty good.

2017 Year in Review

  • Finances
    • Paid 13.6% of income to taxes
    • Spent 24.2% of income
    • Saved 62.2% of gross income; 72.0% of net income
  • Family
    • Pulled kids from organized sports due to too much craziness
    • One extended road trip including a getaway to British Columbia with spouse (and no kids!)
    • Two camping trips
  • Personal
    • Bike commuted most of year (except during horrible winter months)
    • Body weight exercises 3x/week
    • One 50 mile backpacking trip in Uintas
    • Started a blog (technically end of 2016)
    • Officially became a doctor, but not the useful variety (kind of funny)

Goals for 2018

  • Finances
    • Keep doing the painfully simple things that generate wealth:
      • Living significantly below means
        • Keep staving off lifestyle creep
      • Keep maxing out all tax-advantaged accounts
      • Keep investing in low-cost index funds, trying best to ignore market fluctuations along the way
    • Don’t hit a deer (5% of 2017 annual spend)
    • I’d like 2018 annual spending to drop to $50k
  • Family
    • Do another extended road trip
      • One of these years I want to do a national parks tour…probably not in 2018 though
    • More quality time with kids
      • Minimize phone usage in front of kids
    • More camping trips
  • Personal
    • Complete coding course at:
    • Incorporate olympic lifting into training
    • Climb >= 3X/month
    • Start training for 2019 half ironman???
    • 50 mile backpacking trip (Wind River Range, WY?)
    • Limit online rotting (phone & computer)
      • No incessant checking of news or Reddit

Full version is downloadable here (link).


  1. Don’t lend money to friends/family.
  2. I lazily approximate home value as my historical purchase price.
  3. I have a 15Y mortgage; which results in a faster rate of repayment. The true cost of the mortgage should exclude repayment of principal, which I show above.
  4. $20 internet and $0 cell phones as described here.
  5. All expenditures at Costco & Walmart are classified as “Food at home” for simplicity (even if it’s laundry detergent, clothing, etc).
  6. I prefer Vanguard funds but my employer offers Fidelity instead.
  7. Nobody knows the perfect asset allocation. Just pick one and run with it. Use a target date retirement fund as a benchmark if you want some guidance (link).
  8. My low portfolio expense ratio is the primary reason why I don’t hold target-date funds, which have expense ratios anywhere from 0.16% to 1%. I can achieve a much lower expense ratio on my own due to Admiral shares, etc. And it’s not hard. Plus, a DIY portfolio allows one to tax-loss-harvest more easily.
  9. ETF’s are a pain to own relative to holding index funds directly. You have to deal with bid-ask spreads as well as the inability to buy partial shares. With a simple index fund, you don’t have to deal with either of these issues. I am currently invested in VTI b/c it’s $10/year cheaper than VTSAX in my Saturna HSA.
  10. The one blight in my expense ratio analysis is my 529 plan. The underlying Vanguard fund is almost free to hold (0.02%), but the high administrative fees bring the total cost of holding the fund to 0.32%. I abhor fees and would likely avoid 529 plans if I didn’t get to deduct up to $10k of contributions per year on my state return, saving myself $700/year in state income taxes.
  11. The only other administrative cost not captured by my expense ratios is a $19/year administrative fee for my HSA at Saturna Capital ($15 per transaction + 4*$1/dividend reinvestment).

This site is for entertainment purposes only, as disclosed here:

Not itemizing next year? Make your Jan 1 mortgage payment by Dec 31

Taking 5 minutes yesterday to follow this advice from the Finance Buff saved me around $300 in taxes:

The higher YTD interest paid already posted in my mortgage account today after making my payment yesterday. Easily one of the simplest tax hacks I’ve ever employed.

Though this tax hack is mostly targeted towards those itemizing this year and not next year, if you are itemizing both years you will still probably come out slightly ahead due to the difference in effective marginal tax rates across years.