How I Save Money Every Month Buying Generic Brands

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When I started budgeting, I discovered that I spent $800 a month on food for me and my son. I know he's a growing boy, but honestly, $800 a month for food is quite a lot for just the two of us. I recognized that this was an area where I could significantly cut back, so I decided to buy generic brands to save money.

I am by no means pioneering this concept. Many people save money each month by purchasing generic or store brands. While I understand that some individuals are dedicated to their favorite brands, that's perfectly fine—we all have our preferences. For example, if someone loves Jif peanut butter, they are unlikely to switch to another major brand, let alone a generic. However, I urge you to give them a try; here’s why:

By generic brands, I also mean store brands or private labels. In the past, grocery stores introduced no-name brands which featured plain packaging: a white wrapper with black text. Though the packaging lacked appeal, the prices were certainly attractive, leading many consumers to choose these products and enjoy significant savings.

Generic Brands Are Outpacing Major Brands

Grocery chains began creating their own store brands, and food distributors launched private labels for stores that lacked their own. The Private Label Manufacturers Association surveyed and reported that private label sales reached $5.5 billion, marking a 4.4 percent increase—substantially outpacing the growth of major national brands by four times. Store brands accounted for $129 billion in sales, and it is estimated there could be an additional $40 billion not included in the survey. That’s a substantial amount spent on generic, store, and private label brands.

The survey also indicated that many consumers regularly purchase generics, store brands, and private labels. Part of the appeal is that these products are created under stringent quality standards, often adhering to the same benchmarks as national brands. It's amusing to see that some lesser-known brands sold at discount grocery stores, like Save-a-Lot or Aldi, often feature similar colors and designs as well-known brands. This is ironic, considering that when generics first appeared, the packaging was non-existent.

Interestingly, national brands sometimes manufacture products for store brands. This means you could be getting the same quality as the major brands. For instance, some Walmart stores sell Great Value snacks, such as potato and tortilla chips, that are made by Frito Lay. So instead of paying $3 or $4 for a bag, you could find yourself paying around $1. Not a bad deal, right?

The Business Model of Generic Brands Reduces Costs

You may wonder how companies can produce products that taste and quality-wise compare to national brands yet cost 30 to 60 percent less. The key is marketing. Consider the costs involved in hiring a creative team to devise elaborate advertising campaigns, producing high-quality commercials for national TV networks, regional channels, and online platforms, plus the expenses associated with radio ads and printed media. This adds up to millions of dollars annually—which consumers ultimately foot the bill for.

Manufacturers of generic, store, or private label products do not allocate funds for extensive marketing. Instead, they focus on trade shows and direct pitches to distributors, wholesalers, brokers, and grocery chains to showcase their products. These savings get passed on to you.

How I Save Money Every Month

I hope you're beginning to realize that opting for generic brands doesn't mean sacrificing taste or quality. In fact, there are times when generics are identical to national brands. Here’s my approach for saving money by purchasing generic brands:

• Be open to trying them.
• Return them if they don't meet your expectations.
• Compare the cost per ounce.

Be Open to Trying Them

If you are someone who only uses national brands, I encourage you to break out of that habit (and help your budget!) by at least trying a few generic options. You have nothing to lose.

In Washington state, where I live, a major dairy producer sells half-and-half cream. I enjoy my coffee with half-and-half. When I compared the ingredient lists of the Great Value brand to a major local brand, the nutritional information and ingredients were identical. It’s easy to see they are likely the same product. Great Value tastes great, and I save about 30 percent purchasing it.

If you have school-aged children like I do, you understand the frustration of constantly buying over-the-counter medication to combat school germs. I opt for generics and save 20 to 30 percent on those as well. Moreover, the same cost-saving applies to staples like napkins, tissues, toilet paper, and freezer bags.

Return Them If They Don't Meet Your Expectations

Grocery stores want you to try their store brands, often guaranteeing satisfaction. If you don’t like a store brand, you can return it for a national brand replacement. While there might be some items where generics fall short of taste, I encourage you to try them. That's all I ask!

Consider this: if you save between 50 cents and $4 for every generic product, those savings add up quickly. More cash means you could pay off debt, invest in a mutual fund, or save for a vacation. When I weigh generic against major brands, it just makes sense—financially speaking.

Compare the Cost per Ounce

My son enjoys fruity cereal for breakfast. The major brand’s price tag is about $2 more than the generic, yet I consistently choose the generic. Why? The national brand cereal weighs 20.5 ounces, while the generic is 40 ounces. If I only look at the price, it seems like the generic is the less appealing choice. However, examining the price per ounce reveals that the name brand costs 18.4 cents per ounce while the generic is only 14.5 cents per ounce. That’s a savings of over 20 percent for a cereal that tastes just as good—it’s a clear choice in our household.

I’ve discovered that generic canned vegetables can be bought for about half the price of their national counterparts. If you can detect a difference in taste, your palate might be more discerning than mine. Food and taste preferences are subjective, and while I understand that everyone has unique tastes, trying a few generics certainly won't hurt your wallet.

If you choose to try these products, you’ll find plenty of retailers offer generic options, whether it’s a local grocery store, a major retail chain, or a pharmacy. There are ample opportunities for savings.

What discount stores do you frequent to find excellent deals? I often shop at Walmart because their Great Value and Equate brands help me save money. Although Walmart doesn’t typically offer sales, they maintain low prices consistently. Still, sometimes your local grocery stores may have promotions where name brands are cheaper than the generics. As smart shoppers, always look for deals and savings! And don’t forget to download the Ibotta app for additional savings.

Another place I look for bargains is Dollar Tree. Don’t scoff or judge! I know you appreciate Dollar Tree too. There’s something satisfying about buying items for a dollar. If you've visited a Dollar Tree, which has flourished since the Great Recession, you know can find national brands, regional brands, and generic items. Part of the fun is discovering excellent deals.

Did you know you can order from Dollar Tree online and have items shipped to your store for free? One friend walks her dog two to three times daily, and she makes sure to carry bags for clean-up. She orders those little bags by the case from Dollar Tree’s website, so she doesn’t have to worry about running out for months. If you own a dog, you understand how pricey these bags can be at pet supply stores. She saves about $3 to $4 per unit. Dollar Tree offers remarkable savings, and yes, those bags are generic.