Hello Savvy Saver!

Here are some quick savings tips that require very little work on your part and pay huge dividends.

My wife and I love eating out.  I’m not a big fast food fan (at all), so when we eat out, I like to go to a sit down restaurant and do some savoring.  (You can’t savor McDonald’s now can you?)  Eating out can be extremely expensive!  Here are some dead simple things you can do to cut your bill by about 75 percent.

Split the Entree

Most every restaurant serves portions that are way too big for you, or anyone else!  Not only will you save yourself some money, but you’ll also save some calories as well!  It’s pretty difficult, in the moment, to actually want to just split an entrée because there’s a lot of enjoyment that comes from picking what you want and knowing there’ll be plenty.  We’ve become so accustomed to large portions now that we think splitting an entrée won’t be enough.  It will!  And if you’re really worried that you’ll honestly still be hungry, split an appetizer, soup or salad.

Go Out to Lunch

If your circumstances allow, and you have the itch to go out, make it a lunch date.  Lunch entrees are usually 20-30% less than their (similarly-sized) dinner entrees.

Let’s take a quick break here and crunch a few numbers:

If your Friday night dinner usually runs $40 with tip, and you split the entrée and go for an appetizer, you’ll easily knock 25% off your bill.  Instead of two $16 entrees and a tip, you’re looking at one $16 entrée, a $7 appetizer and a tip: $30 (and that’s a very generous tip).

If you choose to have the night out at lunch, you’ll easily knock it down to $24.

But now the fun begins.

If you’re smart and plan a little bit, you’ll knock even a dinner meal down to the rock-bottom.  Here’s how.

Use Gift Certificates Strategically

My favorite little secret: restaurant.com.  Restaurant.com has a database of over 8,000 restaurants across the country.  Not every restaurant’s participating, but I can quickly enter my zip code and figure which restaurants are available.  Restaurant.com basically sells gift certificates for these restarants, at a discount.

As I write this I’m looking at a nice little sushi place down the road where I can buy a $25 gift certificate for $10.  Now on this specific restaurant, they require you have a $35 dinner purchase (read the stipulations for each restaurant), so I couldn’t use it during lunch, and I’d still have to spend another $10.  I’m basically saving 43% — not bad!

Do make sure you read the stipulations.  You can only use one gift certificate per visit and some of them require that you purchase two entrees (they’re on to us).  Others have it only valid for lunch, or only valid for dinner.  Most of them have a minimum spend on there (for obvious reasons).  If it’s a $10 certificate (cost: $3) then your minimum spend is usually $25.  A $25 gift certificate usually will have a minimum spend of $35.  Some restaurants even exclude drinks (and most exclude alcohol).

Wait — this Just Got a LOT Better

Every once in a while, restaurant.com will run a special where they’re giving a discount on the gift cards.  You’ll see discounts of 70-80% fairly regularly if you google around a bit.  So, going back to our example with the sushi place:

$25 gift certificate costs $3 (normally $10, but we used a 70% off coupon).
Additional spend to reach the minimum is $10.
Meal Cost: $35
Your Cost: $13 + tip
Savings: 63% – tip

You can enjoy a $35 meal of sushi (or something else if sushi isn’t your thing!) for $13 plus a tip.  Now that’s not too bad at all!

Have fun eating out for less!

Hello Savvy Saver!

I’m actually not specifically talking about overpaying your taxes here.  You should, at least in my humble opinion, pay the least amount of taxes legally possible.

I want to focus this short savings tip on the Overwithholding that people are prone to do.

There are two reasons people overwithhold on their taxes:

1. They misunderstand what the withholding is, and how it plays into their actual income tax due (or not) when filing or
2. They understand how everything works, but they’re afraid to owe taxes to the IRS come tax time.

We’ll address both of these issues here.

The government has been withholding taxes since World War II.  Before that, every April 15th, everyone was paying all of their taxes.  It created quite a cash flow situation for the government, especially during times of war.  To improve the cash flow situation (and, in my conspiracy-oriented mind, to also make us a bit more unaware of how much we are truly paying in taxes) the government passed a law that required withholdings.

Your HR department will give you a W4 and you’ll usually mark the number of dependents, any additional withholdings required, etc.  The number of dependents determines what your withholdings will be.  A hypothetical:  Your salary is 50,000 per year, and you have three dependents.  You may see withholdings of $150 per month.  If you increase the number of dependents, the amount withheld will decrease.  This is how you’ll manipulate the withholdings to be either just right, or a bit short.

Basically the government is saying that because you’re working, they’re confident you’re going to owe them some money.  It’s in the government’s best interest to overestimate what you’ll owe, because then they receive an interest-free loan.  As a result of that, the tables that are used to calculate what should be withheld are going to be more aggressive in terms of what you should withhold.

In our example, by the end of 12 months, you would have withheld $1,800.  If your actual tax liability is only $1,200 then you would receive a refund of $600.  (Please take note, you did pay taxes.  You paid $1,200.  Please don’t tell me that in this situation you did not pay taxes, but received a refund!) Your interest-free loan to the government was $600.  They were able to use that money until you called for it back by filing a return that showed you had overpaid.

So, for those of you that didn’t really understand the why behind this, there you have it.

For Those that Have a Tough Time Saving

Listen, if you can “save” your money by automatically deducting it and handing it off to the government, then you can certainly save it by auto-deducting it from your paycheck and deferring it to a savings account.  Most employers will allow you to direct deposit to multiple institutions.  Take the refund you received this year, divide it by twelve, and set up that amount as a direct deposit into a high-yield savings account such as ING.  The psychological effect will be just about the same — you’ll never “see” that money and be tempted to spend it.

With only a $600 example, the difference isn’t too dramatic.  Saving that money would provide very little in terms of interest (less than $10 annually).  It’s the principle that counts (no pun intended)!  The average refund size in the US is actually much higher than that.  You’re basically leaving money on the table!

This year, use the YNAB Income Tax Forecaster (it’s free) and determine what your tax liability will be.  Don’t give the government an interest-free loan!  Adjust the W4 until the amount withheld brings you even, or having to pay a little bit at the end of the year.  Pay yourself instead!

We’ll save overpaying and all of the strategies involved there for another day…

Hello Savvy Saver!

When taking a hard look at savings, it’s easy to gloss over subscription payments and go right to those variable “discretionary” line items such as groceries and entertainment.  Many times, people never even consider their TV/Cable/Satellite setup as optional.  Why?  They aren’t aware of cheaper (a lot of times, free) alternatives.

The average monthly hit your bottom line takes with cable/satellite ranges anywhere from $60 to $120 per month.  Imagine if you could free that cash up to do something more productive (and no, I’m not talking about what you might be doing differently with your time — more on that later)?  At $90 per month you’re set to save $1,080 per year!  That’s nothing to sneeze at!

Assessing Your Current Viewing Habits

This type of change (even the thought of this change) can strike fear into the TV-Loving Hearts of many.  Relax.  I want to help you assess your viewing habits and see if this move is right for you.

How many channels are you currently paying for?  And how many of those channels have you watched for more than a few minutes over the past week?  Channel surfing doesn’t count.  I’m looking for intentional watching, not stumbling onto something you find mildly interesting only because you’re bored out of your mind and wanting to decompress.

The average satellite subscriber has access to who knows how many channels.  Most people I asked told me they watch about ten channels.  Are you in the same boat?  So are you basically purchasing the other hundred-some-odd channels each month and never watching them?

I do this all the time!  I go grocery shopping and then throw out 90% of what I just bought (this is the same thing, right?)

What we’re basically wanting to do is take cable and go a la carte.  (Ramit, from IWillTeachYouToBeRich.com wrote a great piece on a la carte implementation in other aspects of spending as well — worth the read).

However, the great news is that most of the shows from major networks are available without any charge whatsoever.  So I’m not even suggesting you pay per episode.  I’m talking about you not paying anything at all.

The Beauty of Streaming (Like TiVo but free)

Julie and I have been enjoying streaming video for quite some time — ever since we became fans of Lost.  The options available to you will bring you almost every major network show (and then some):

1. Hulu.com (my personal favorite, containing both NBC and FOX content with old shows like The Cosby Show and News Radio)
2. ABC.com
3. CBS.com

But what about those channels everyone always mentions to justify a cable subscription in the first place (Discovery Channel, Animal Planet, and PBS)?  You can stream a ton of great shows from those channels if you just apend a .com (.org for PBS) to the end of each them and head over there with your internet browser.

Actually, today I’ve been running with some fabulous new software called Boxee.  It’s in alpha, so it’s free, and it is fantastic.  It gives you a nice Mac-like Front Row experience (or Windows Media Player experience) but brings together a whole slew of media sources right in one place (ABC.com, Hulu, YouTube, MTV, CNN..the list goes on and on).  Apple die-hards with an Apple TV will be happy to note that you can even install the Boxee software on Apple TV and stream the content right through there.  It’s not a hack — it’s simply a software install.

What are the downsides to streaming?  You usually have to wait an entire twenty-four hours to watch the show!  (I say that with lots of sarcasm slathered on there).

What About for the Die-Hard Sports Fan?  You actually don’t have the brightest outlook.  I know ESPN360.com is available, but they don’t have everything.

Free HDTV Over the Air

One thing to consider if you find that you’re viewing mostly the major television networks anyway — you could purchase a relatively inexpensive HD antenna and grab those channels for free.  We don’t watch enough TV to justify an HD antenna, but I dug up some great info anyway if you’re interested.

First, find out if your programs are broadcast over the air in HD at TitanTV.com.  Second, check AntennaWeb.org, which will tell you how/where to point your HD antenna so you maximize its reception.  A great tutorial I found regarding HDTV over the air should be a solid resource as well. 

What About for Movies?

A Netflix Subscription will give you as many movies as you could possibly watch through the mail or via on demand download.  Consider (if they’re available) using Redbox, which sports coupon codes you can use to rent the movie for free (just don’t return it five days late, like we did with a movie that we never even watched).

Now granted, a service like Netflix isn’t free, but at $9 per month it’s quite a bit cheaper than what you’re paying for cable/satellite.  From what I gathered, a $9 per month subscription gets you one movie through the mail and as many streaming movies as you can handle.

Hidden Savings You May Not Have Considered

The important aspect in this is really to evaluate your viewing habits.  Are you spending a lot of time simply browsing channels because you’re bored or are looking for some type of escape?  Or are you watching TV because you are interested in that one show you’ve been following?

The hidden savings in all of this may very well be much more valuable than the savings you create through cancelling your cable subscription:  your time.

You’ll find quite a bit of time recovered with the following:

1. An hour-long streaming TV show through Hulu.com has (I believe) two minutes of commercials.  Were you to watch that during the normal broadcast you’d be dealing with 17 minutes of commercials.  If you TiVo it and skip through commercials, you’re still having to pay for the TiVo subscription.  I’ll watch two minutes of commercials to skip that subscription.
2. A significant amount of time people spend watching TV is with channel surfing or watching a show that they really don’t care to see, but their curiosity is piqued just enough to get them to stick around (this happened to me with The Abyss several years ago — an episode in my life that drove me to sell our TV and take Julie out for Chinese food on the money we made from it — it was an old TV and we’ve never looked back).

When you stream your TV shows via the free services mentioned above, or only purchase your media a la carte on demand, you’re only watching what you really want to watch.

The sky’s the limit with your time savings:  read a book, exercise, master a skill, learn a new language…

In Conclusion

I’m not saying you need to go too extreme he
re, but this may be something you want to consider.  We rent movies on demand via iTunes or Amazon (or through Redbox) and watch all of our favorite shows through Hulu or ABC.com.  We don’t miss cable in the slightest!

This is a savings tip+tactic.  I want to make you aware of a money-sucking weapon used against you, and then I want to teach you how to wield a money-saving weapon of your own.

Americans, for the most part, do not enjoy negotiating.  I’ve attempted to examine my own hesitations when it comes to negotiation and I believe it has to do with status.  It seems a bit needy to haggle — as if I couldn’t afford the price their asking.  “Oh I can afford it buddy!  I’ve got money oozing out my ears!  Just let me show you how much status I have!  I’ll buy TWO at full price just to prove it!”

Or something like that.

Hopefully you’ll move quickly beyond that type of attitude and will be on your way to saving toward your bottom line by disarming sellers and wielding a magical 7-word weapon of your own.

Disarming the Seller with Awareness (a bit on Anchoring)

There is a classic tactic of retailers called anchoring and if you’re aware of it, you can combat it (as we YNABers very well know, awareness is the key to just about everything!) when doing your purchasing.

Originally introduced to the idea of anchoring in Russo/Schoemaker’s excellent book Winning Decisions, I’ve tried to be very aware of it, and how it’s used against me when it comes to my purchases.  In an instructional module that Russo wrote in May 2006, he described a simple exercise he did with his students to demonstrate the power of anchoring:

“The anchoring bias can easily be shown by posing two related questions to students. First, ask a question that implants an anchor value. For instance, if the quantity to be estimated is the year that Europeans defeated Attila the Hun, the first question might be: “Was the year that Attila the Hun was defeated in Europe and forced to return toward Asia before or after 900 CE?” Then the second question asks for the year directly: “In what year was Attila the Hun defeated and forced to return toward Asia?” (emphasis added)

You might guess what happens.  Students have been anchored to the year 900 CE by the previous question.  As a result, their estimate for the exact year of Attila’s defeat is unmistakably clustered around 900 CE.  Russo makes the case even stronger when he uses each student’s last three digits of their phone number in place of 900 CE.  The students all tend to answer near the year given even when that year has absolutely no bearing on the second question.

How is anchoring used against you every day?  Ever heard an auto dealer talk about the MSRP? Ever looked at a clothing tag and seen that suggested retail price crossed out to show you your sale price?  Discount price? Today-only price?

I only mention anchoring because it’s a classic tactic that can easily be combated by simply knowing that it’s a psychological trick that really does work.

Negotiation Made Simple:  A 7-Word Weapon of Your Own

Oh, I wish I could take credit for this, but it was actually based on an interview of Richard Paul Evans that I heard on the Glenn Beck show while I was driving around the other day.  Glenn Beck described it as:

“Seven words that will change your course, seven words that will change not only I believe your financial future but also the course of your life.”

Those 7 magical words?  Is that the best you can do?

Period.

Embrace any silence that may follow.

Use this all over the place.  Use it at restaurants, retail outlets, hotels, airports — everywhere.  Evans says it’s a rule for every one of his staff members to use that line whenever they’re purchasing anything.  They’re seven harmless (but powerful) words!  They’ll cause no embarrassment, you’ll feel no pain, and you’ll likely end up saving a bundle.

What you’ll find happens nine times out of ten is that the person will come back (after having spoken with a manager or whatever) and offer you some percentage off, and then apologize for not being able to offer a steaper discount.

Do this in places where negotiating just never happens.  Walmart.  Gap.  Target.  You will be amazed at what happens!  And at the mom and pop shops you’ll find an even easier time being able to talk to the person that can actually call a few shots.  Try this out and shoot me an email at jesse@youneedabudget.com with your story!

Is that the best you can do?

If you’re looking for a full-on thesis regarding negotation, this little email won’t be for you.  However, the excellent book Getting to Yes: Negotiating Agreement Without Giving In will certainly suffice.  It is a great source if you find yourself wanting to improve your negotation skills.  I highly recommend it.

However just knowing about anchoring, and wielding your own negotation weapon will go a long ways on their own.

Hello Savvy Saver!

This email is intended to be a virtual one-stop resource for you in regards to saving money on your car insurance.  If you want the reader’s-digest-one-sentence version, it’s to:

Comparison shop around every six months (this site is my favorite).

Saving money in regards to car insurance is not just about finding the lowest premium, there are several aspects of it, and every one of them can be used to put some serious savings back into your pocket.  We’ll discuss five different areas of savings focus:

• Shopping Around
• Fine-Tuning Your Policy
• Fine-Tuning Yourself!
• Making Payment
• Handling an Accident

Shopping Around

You absolutely must shop around — and do so every six months — to ensure you’re getting the most competitive rate for your situation.  My personal favorite source (because it’s so drop-dead easy to use) is esurance.com.  There are a bunch, I’ve just found their site to be the friendliest.

A while back, a blogger Jeff had this to report in regards to shopping around:  “I think the most important thing to remember is to shop around. I recently looked around for a new policy for my ’96 Ford sedan and had one company offer me a plan for $1,000 a year (and I have a clean driving record) and another company offer me a plan for $155 for 6 months.”

While Jeff’s example may be a bit extreme, policies can vary by as much as $500 for six months’ coverage.  Making sure you’ve found the best rate could literally mean $1,000 in your pocket that you otherwise wouldn’t have.

How Commissions Work

If you understand where and how the money flows in the insurance industry, you’ll significantly increase the likelihood of getting your policy at a good rate.

There are basically three different sources from which you can purchase a policy:

• Direct writers (Geico/Amica come immediately to mind) – Direct writers do not pay commissions, so their policies are generally lower.  However, they are much pickier about who they insure, so if your driving record is a bit tarnished, you will likely not get the best deal going through a direct writer.
• Captive Agents (State Farm, Allstate) – Captive agents work exclusively with one insurance provider.  So an Allstate agent will work only for Allstate and will be paid a commission for each policy sold (usually about 15%).  If you’re driving record has some blemishes, this may be what should get your first look.
• Independent Agents – Independent agents navigate the insurance waters on your behalf and are paid a commission from the insurer as well; they are not bound to one specific provider but can shop around and find you the best rate (though honestly, esurance.com or others like it do that for you just as well).

The Real Dangers of Too Much Bargain Shopping

If you’ve found a deal that’s “too good to be true,” then it’s possible that it may be!  You can go too far with the bargain shopping — where you perhaps run across some companies that aren’t as financially sound as they should be.  To double-check this, you can usually go to your state’s .gov website and look at complaints filed and other potential red flags.

At the Negotiating Table

Once you’ve found the lowest policy, it’s important that you don’t show all of your cards immediately.  You’ll want to let potential insurers know that you are aggressively shopping around and will not settle for anything but the best price.  There isn’t real flexible pricing when it comes to policies because all of the numbers are spit out by a computer — however, an agent or customer service representative certainly can tell you more about potential discounts.  These are simply new variables you can plug into their algorithm to lower the premium even further.

Make sure you ask about:

• Combining policies – will they lower the price if you insure both cars through them, or also move your homeowner’s policy over? Most will.
• Will they offer a discount if you take a defensive driving course?  Many courses can be taken online and spread over several days or weeks.  Having a certificate of completion can significantly reduce your premium.
• Is your (or your child’s) GPA a 3.0 or greater?  A high GPA can knock as much as 40% off the premium!
• Are you retired?  That means you’re driving less.  Let them know!
• Do they offer discounts if you belong to any associations, or groups?  Mensa members sometimes receive a discount.  If you work for a large employer, you’re likely to receive a discount as well.
• If you have college kids living further than 100 miles away, you’ll get your premium knocked down.
• If your vehicle has anti-lock brakes, airbags, or automatic seatbelts, ask about a discount.
• Once you’ve been with a company for a year, many of them will give you their “loyalty rate”.  You can actually ask for the loyalty rate early and may be able to score it then as well!

When to Start Shopping

You do NOT want to wait until you’re near the end of a policy to begin shopping around again.  Many insurance companies view consumers looking early at policies as “responsible” and will give you an “early shopping” discount of up to 12 percent!

Fine-Tuning Your Policy

Increase Your Deductible

If you can afford it, you should immediately look at increasing your deductible.  The key is to “self-insure” up to a point that makes sense for you.  As you begin to build an adequate emergency fund, that cash on hand will allow you to use this strategy.  Simply increasing your deductible from $200 to $500 saves anywhere from 15 to 30 percent.  If you increase the deductible up to $1,000? You’ll likely save 40% or more.

Consider Dropping Some Coverage

If you’re looking at paying coverage of $1000 annually for your car, use the Rule of Ten.  Ten times your annual premium would be $10,000.  If your vehicle is worth less than that, you may want to consider dropping collission and comprehensive coverage.  Both of those options can account for as much as 40% of your premium and they only cover the car’s replacement value.  If you’d ever have a claim that would exceed the cost of your premium (less your deductible), comprehensive and collision probably aren’t worth it.

Fine-Tuning Yourself!

Yes, Your Credit Score Does Matter

While I’m not fan of debt in any form–and certainly not a fan of credit scores (because they’re so inherently tied to credit)–I do want to stress that your insurance rates are very much influenced by your credit score.  It’s not exactly a credit score–it’s actually an “insurance score”, but it’s based on the same basic inputs.

One sure-fire way to lower your premiums is to raise your credit score.  The first step in doing that is to know what it is.  While it’s true you can get one free credit report each year (via annualcreditreport.com — not the scammy freecreditreport.com), those don’t give you your score — they only give you your report.  I personally prefer MyFICO.com because they’re NOT scammy and they’re part of a very established company (Fair Isaac).  Do NOT get Suze Orman’s MyFico Kit Platinum.  Nothing against Suze or anything, but you don’t need all that.  All you need is the Fico Credit Complete product (also, don’t do the monthly monitoring thing).

Once you know your score from all three credit reporting agencies, you’ll quickly be able to dial in on what you need to improve.

Let me reiterate — I’m not advocating becoming a credit score diva.  Credit scores are mainly for borrowing money and borrowing money, as a rule, is not good.  This is specifically so you can save real dollars by lowering your car insurance premiums.

Drive Carefully!

Your very first at-fault accident could raise your rate 40 percent!  Don’t text and talk!

(Here’s a juicy tidbit that you may not have known about though.  Many insurance companies have a “forgive the first accident” policy.  Ask how to qualify and you might see a major positive correction on that premium rate.  They obviously won’t go around advertising this, but many times it’s there — you only need to ask!)

Teen Drivers

Just one note on teen drivers.  Many parents believe that once their child turns driving age, they need to add them to the insurance — absolutely not!  Only add them once they have a driver’s license.

Making Payment

Many insurance providers tack on “installment” fees if you pay monthly.  Do your best to follow Rule Three of the YNAB Way and save enough premium funds to only pay it once every six months — this can save you up to 15 percent!

Handling an Accident

In the horrible situation where you are in an accident, there are many things to be aware of that will truly save you a bundle.  This gets into the sometimes-tricky state-by-state legal stuff, but I’ve outlined it here and it should be a cinch going forward.

1. Fourteen states allow you to make a claim for the diminished value of your vehicle in the event of an accident.  Dimished value basically means that, even after repairs, your car will never be worth what it was prior to the accident.  If you weren’t at fault in the accident, you can often make a successful case against the insurance company of the driver that was at fault for that difference in value.  (The fourteen states that allow this? Florida, Georgia, Hawaii, Kansas, Louisiana, Maine, Maryland, Massachusetts, North Carolina, South Dakota, Texas, Virginia, Washington and West Virginia).
2. Also, there are 28 states that require auto insurers to pay for the sales tax when you replace your totaled vehicle with a new or used car.  Now remember, the insurance companies aren’t going to be upfront at all with you in this regard, but the sales tax on a $12,000 vehicle can be substantial and it should go to you as parting of making you “whole” from the accident.  Also, even if you don’t see your state listed below, if you ask, many auto insurers will not deny the request.  States that require auto insurers to pay the sales tax:  Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Vermont, Washington, West Virginia and Wisconsin).
3. Stacking.  If you’re invovled in an accident where an under- or un-insured motorist (UIM) is at fault, you may be able to “stack” your UIM policies.  For example, if you have two cars insured by your auto insurer and you’re in an accident with a UIM, your damages may come to be $32,000, but each policy only comes to $25,000.  You could stack the coverage from both policies for a total of $50,000 in coverage.  I know the law on stacking varies from state to state, but you can check it here.

Conclusion

I know this has been a lot of information to digest, but I really want to make the YNAB Saving Tips valuable to you!  Hopefully you’ve found something in here that will save you a few hundred dollars each year on your car insurance premium.  Remember, if you pick only one strategy it should be to shop around!

Hello Fellow Savers!

After I graduated from high school I worked part-time for a health food store called Arizona Health Foods.  AZHF had their own line of supplements consisting of multivitamins, all the vitamins and minerals, CoQ10, digestive enzymes, glucosamine, etc.  Basically they had their own line for every popular supplement at the time.

A few weeks before we actually launched the AZHF brand and put it on the shelves, the manager spoke to all of us and told us how we’d get a bonus (collectively as a store) depending on how much of the AZHF brand was sold each month.  I was intrigued by more money ($6.15/hour wasn’t exactly doing it for me) but completely dismayed when the product arrived.  The bottles were solid white, with a white label, black lettering, and the AZHF logo.  They looked pretty generic.  You would hold that bottle up next to something from Nature’s Health or Nature’s Way and it wouldn’t look nearly as appealing.

On top of that, the little guy on my right shoulder started whispering a few questions in my ear — would I be pushing an inferior product just for the money?  I decided to ask my manager about that.  I didn’t want to promote the product if it wasn’t as good as the alternatives (cheaper, yes — but if it was as good as it looked then I was concerned).  She took me to the back and showed me a packing slip from the shipment of the AZHF multivitamins.  On that packing slip there was also a shipment of my favorite multivitamins (they were from Oregon Health at the time).

It turns out Oregon Health was manufacturing their brand, and our brand.  Same exact pills.  Different bottle.  Ours were a few dollars cheaper.

This happens quite a bit with generics.  The same company that’s selling the spaghetti sauce for $2.49 is also selling the store brand next to it for $2.09.

I see it as a win-win for grocers and consumers.  The grocers don’t need to fund large advertising budgets to raise awareness about their new spaghetti sauce, they simply use the very-valuable shelf space they already have to let consumers know they have an alternative that is cheaper.

In a recent Neilsen survey, consumers like you and I are catching on.  62% said, “store brands were just as good as name brands.” (http://tinyurl.com/76focg)

It may not happen every time that a national brand is also making the private label brand as well, however, a simple comparison of ingredients will put your mind at ease.  You’ll be surprised how many times they are the exact same.

Today’s Budget gives a great tidbit on the types of foods that make a lot of sense when going generic: “Staples such as rice, flour, sugar, salt, milk, applesauce, apple juice, frozen vegetables, frozen juices, vinegar and pull-ups for the toddler all make for great store brand or generic purchases.” (http://tinyurl.com/5ogswq)

I’m certainly not saying if you have a favorite food, swap it out for the generic straight away.  But know that there are plenty of opportunities to buy generic where the taste and quality are both on par, but the cost is significantly less.  Remember, AZHF had their products made by the exact same companies with whom they were competing!

Most consumers report that when they make a concerted effort to move toward private-label brands, their savings are significant — sometimes upwards of 30%.  When you consider that your grocery bill is one of those few things that you can actually influence quickly, it makes sense to look there for bottom line savings.

Stay tuned for next week’s tip!  It should save you a couple hundred dollars per year if done correctly.