Broadcaster and author Dave Ramsey has built a thriving business on his brand of financial advice, which often emphasizes thrift.
In a recent blog post, he elaborated on one of his favorite cost-cutting measures. Hidden in plain sight on supermarket aisles across the country, Ramsey argued that generic products are often not the inferior knockoffs they once were.
As part of his report, he purchased the ingredients needed to prepare three dinner recipes with both store and brand-name products. With everything except fresh onions and tomatoes replaced by generic alternatives, Ramsey wrote that each meal could be recreated for substantially less money with a negligible impact on the final result.
A spaghetti meal, for instance, cost $6.72 to prepare with generic ingredients, compared to a name-brand price of $9.41. Recipes for a casserole and a taco dinner showed similar savings. Some individual generic products, like tomato sauce and sour cream, were purchased for half the price of more recognizable brands.
Choosing store-brand options for dinners alone, Ramsey wrote, could net a savings of $20 a week, totaling more than $1,000 in extra money per year for a family with little added effort.
“And that’s not even counting how much you could save by buying store brand for breakfast and lunch items, cleaning supplies, toiletries and snacks,” Ramsey wrote.
As with most tips, however, there were a few caveats and exceptions, including the wild card of “couponing.”
Many shoppers have strategically used coupons to save staggering amounts on their grocery bills in a niche industry that has gained popularity in recent years. Since coupons are typically redeemable for name-brand items, even moderate couponing can negate the impact of purchasing generics.
“So don’t automatically assume generic will be the least expensive option every time,” Ramsey wrote. “It pays to compare prices, coupons and sales flyers!”
Ramsey also noted that not all generics are created equal. While most food items come down to a personal taste or brand preference for shoppers, he said some generics are seen as the logical alternative even by seasoned chefs.
A study by the National Bureau of Economic Research backed up his argument, reporting that chefs purchase generic staples — specifically salt, sugar and baking powder — at a higher rate than the general public. That report also indicated that primary shoppers “who were science majors in college buy more store brands than those with other college degrees.”
Ramsey listed a few other generic products that are often indistinguishable, aside from packaging, from name-brand items.
Other pantry items, including spices, flour and sugar, are near the top of his list. These products are “basically the same” as the more familiar brands, he wrote.
Milk and juice also offer an opportunity to save money without sacrificing quality, according to Ramsey. When available, he wrote that generic produce is a smart alternative to “items like certain name-brand bananas,” adding that shoppers will “find that the batch of ‘no-name’ bananas will likely taste like — you guessed it — bananas.”
The bottom line, Ramsey wrote, is that anyone struggling to make household budget cuts and is not already buying generic products should at least consider whether it might be a solution.
“It requires pretty minimal effort on your part, and it can save you big bucks in the long run,” he wrote.
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