We all have our favorite brand names. No matter how value-conscious we might be, each of us – consciously or subconsciously - probably has a few brands that we for whatever reason trust over the alternatives.
In some cases, there’s real merit to it. There are some brand-name items that taste better , and some brand-name products that simply work better. I’ve had my share of both of those. But, I’ve also seen a few examples recently where there was seemingly little difference in the actual items other than the price.
Here are two examples:
Yes, we know the notion of doing away with a gourmet coffee drink every day is one of those popular examples used in showing how little daily savings can add up. It’s a good point I agree with, in the case that you want to give up something entirely. Which, of course, makes sense quite often.
If you want to keep what you like, but want to save money, there are ways to save money. I previously shared my extremely frugal coffee savings method, which was of course over the top. However, if you simply want to enjoy a regular coffee each work day, there are legitimate ways to save. Simply buy a less expensive brand.
A great example was at a prior workplace where there two types of coffee offered in the cafeteria: premium, and “no-name” varieties. For a medium cup of premium (with a known brand name), it came out to about $2.40. Not exactly inexpensive! However, the no-name “house” variety went for about $1.30 for the same size. Interestingly, talking to the cashier, there were people that regularly bought the more expensive coffee every day. For me, I could detect little difference between the two, having tried each.
So, if somebody gets coffee every working day, the cost of getting the premium version can really add up. Over the course of a year with 250 working days, that comes out to $275. Just for buying a branded coffee over a house variety, with both being the same otherwise.
First Aid Products
Okay, so this is quite a departure from coffee! Yet, it’s another area where I noticed a difference in prices that made me wonder why people would spend so much more.
I was in the first aid aisle of a local retail/grocery, and came across what I was looking for: a topical anti-biotic ointment. Good to have around, in case of cuts or minor injury. Anyway, I saw a small tube of a premium brand selling for about $4.50. Nearby on the shelf, there was a store brand version for sale for about $2.50.
Now, when it comes to health care, I’d be instinctively more likely to think about a brand name I trust versus something else. However, in looking at the ingredients of the two items, they didn’t seem to be different based on the labeling. In this case, why pay $2 more?
This can all really add up! Well, think about that coffee example. That’s $275 right there. Then go back to the grocery example. If you can save $2 each week by making substitutions on household goods or food, that comes out to another $260 per year. Just those two changes – switching coffee varieties and $2 in grocery savings a week – can add up to $535 annually.
In this example, just imagine if you did this every year for 25 years. It’s $13,000 saved by simply doing a few painless substitutions. Now, if you took those annual savings and invested them along the way and got a decent 8% annual rate of return, that $13,000 could increase by a lot more. As in, to more than $42,000!. Enough to buy you enough to buy you a couple of cars over those 25 years!
All for making a few painless substitutions in terms of brands!