The following is a guest post from Money Crashers
The majority of what I write about personal finance highlights the various ways to save money and spend less. The topics range from saving on electric bills by going green, to learning how to extreme coupon so you can cut down on expenses at the grocery store. In this article, however, I’m going to do something a little different and propose an idea that involves spending more money.
When it comes to shopping for brand name vs. generic items, generally you can save money by going with the generic version of the product – at least in the short-term. After all, when you purchase name brand groceries, the extra costs often go towards nothing more than the advertising on the package.
So should you ever buy name brands over generics? If you typically purchase only generic brands to save money, you may be surprised to learn that this can sometimes be a mistake.
Can You Be Too Frugal?
Sometimes, you may find yourself going overboard and becoming too frugal. Saving money only benefits you when it doesn’t cost you more money down the road. Consider this before switching to an “all generic” mindset. In addition to the cost of food, other factors should impact your buying decisions, including the taste of the food, and whether or not your family actually enjoys eating it.
Taste vs. Price
Many generic brands taste the same as their brand name counterparts. However, when name brand foods taste better, the amount you save may not be worth it. Research from Consumer Reports shows that the taste of the brand name product does beat out the taste of the generic brand for some foods, including: butter, French fries, mayonnaise, peas, and tuna. The study also indicates that Target’s brand of ketchup won over Heinz, and Walmart’s brand of potato chips beat out Lay’s.
You can save up to 30% by buying generic brands at the grocery store. However, if you and your family don’t like the taste of the generic food you buy, it may be unused and thrown in the trash. This of course mitigates any savings received from buying the generic brand. What was initially done to save money, ends up costing you money instead.
Tips for Choosing Between Brand Name and Generic
In my own experience, I used to believe that everyone should only buy generic brands to save money, because the difference in taste was minimal. Over time, I began to realize that some name brand products do in fact hold a competitive edge over their generic counterparts.
Here are some tips you can use to decide whether to go with brand name or generic for a particular product:
- Perform Taste Tests. Perform your own taste tests to determine when you can substitute generic brands and when you need to purchase name brand products. Try serving generic brands to your family to get their input. Generic products that seem to taste the same as name brand products include: bagged cereal, canola oil, soy sauce, spices, and yellow mustard.
- Use Generics for Cleaning and Paper Products. In addition, try substituting generic brands for name brand cleaning products, napkins, and paper towels. These products might make up a smaller portion of your grocery list, but you can still realize a savings when you switch to generics for non-food products at the grocery store.
- Find Quality Store Brands. You can also find some savings when you purchase store brands instead of name brand products. Many large chain grocery stores offer their own private label brands for groceries, paper products, and various sundries (e.g. the Kirkland Signature store brand for Costco Wholesale). The stores frequently offer varying levels of quality in their private label brands, from high-end products, to inexpensive value-driven products.
- Take Advantage of Sales & Coupons for Your Favorites. Don’t sacrifice things that you enjoy in life, like a favorite food, just to save a few dollars. Instead, watch for sales on the foods you like, and use coupons in addition to paying sale prices, to get the best deals.
Sometimes, you may want to spend a few extra dollars to buy a brand name of a certain item instead of the generic equivalent. However, you can still realize savings at the grocery store when you purchase generic cleaning products, some generic foods, and generic paper products. Also use store and manufacturer coupons for the foods you love during store sales. You can save a lot of money by incorporating some generics into your shopping budget, but don’t give up your favorite foods and brands in an attempt to save money.
What’s your strategy when it comes to buying generic vs. brand name products to save money?