When Sarah and I were really straining to get our finances under control, we went through a phase where we bought the cheapest versions of every food and common household product. We bought cheap coffee, cheap cereal, cheap dishwashing detergent – you name it.
As we used this stuff, we found that most of it did a very nice job. In most cases, we couldn’t notice a difference between the name brand version we used to buy and the inexpensive version we were now using.
Sometimes, though, the difference was disastrous.
I’ve told this story before on Money360, but one of the disasters we faced came in the form of garbage bags.
Before the switch, we had purchased premium-level garbage bags and had never had a single problem with them. We were quite used to filling up our trash can to the brim, then easily pulling out the sack and taking it to the dumpster.
When we switched to the cheap bags, we continued doing the same thing – why wouldn’t we? The first bag or two held, but then one of them exploded on the carpet in front of our door, with the bottom completely ripped out of the bag. We had a huge mess to clean up.
After that, about one in every seven or eight bags would blow up. We started double-bagging, which drastically reduced (but didn’t eliminate) the blowouts, but when we did that, we calculated that we really weren’t saving money any more over the expensive bags.
(We did eventually learn that you can almost eliminate the blowouts with cheap bags if you only fill them up to about 50% to 60% of capacity and never put heavy items in them, but, again, if you’re using two cheap bags for every one expensive bag, you’re not saving much money.)
All of this taught us a pretty important lesson: it’s not always the best move to buy the cheapest version. Instead, you should strive to buy the least expensive version of an item that does its job well.
This requires some experimentation. Here’s how we’ve always approached it.
First of all, try the generic version of the product. Buy it first, before ever trying the name brand version. If you consistently buy the name brand version of a product right now, just try the generic or store brand version the next time you go to the store.
Once you’ve tried it, evaluate it. Did it do the job that you wanted it to do? If the answer is “yes,” then you essentially have no reason to not buy the generic version of that product.
Sometimes, though, you’ll find the answer is “no.” At that point, I don’t just start buying random versions at the store. I turn to Consumer Reports.
I use their website – or, if you don’t have a subscription, you can visit your library as most of them have the last few years of CR on their shelves – and look up the most recent comparison they’ve done of that particular kind of product.
I don’t buy the top one. Instead, I buy the one they’ve indicated as the top “best buy” – and I’ll usually take note of all of the ones they’ve marked as such.
In my experience, I’ve found that the product that CR marks as a “best buy” isn’t the cheapest one at the store, but it’s never the most expensive version, either. It’s a middle of the road buy. However, I can’t recall a time when the “best buy” version ever failed me.
When I look at my shopping list and the items that end up in my cart, they’re almost always a mix of generic and store brand items and items that were marked “best buy” in Consumer Reports, with more generic and store brand items than anything else.
Sure, we could afford the name brands for all of this stuff, but why? If the generic or store brand version does the job that I want, there’s no point in buying the name brand version. If the generic doesn’t do the job, why wouldn’t I look for the one that gives the most bang for the buck? For figuring that out, I trust Consumer Reports.
You know, sometimes I wish I still had some of my grocery receipts from before our financial change. Given what I remember of shopping in that timeframe, I’d probably laugh… or cry. I was constantly spending extra money on versions of items that didn’t do the job any better than the cheap versions, and over the course of a year, thousands of dollars went down the drain.
If I only knew then what I know now, our financial state would be amazing.