Personal Finance

Generically speaking, it pays to look and ask

Do you care if someone opens your medicine cabinet and sees a bottle of Walgreen’s ibuprofen instead of Advil, or a bag of “toasted flakes” instead of a box of Frosted Flakes? Once you do the math, you’ll almost surely take a different path!

Whenever it’s an apples-to-apples comparison, almost always go with a generic brand. My house is full of them. In many cases, generic products are very similar to name band, and in some, the same manufacturer produces both versions. This is especially true in the grocery store or at the pharmacy.

No coupon required

Everyone knows generic and store label grocery items are cheaper than brand names. But how much cheaper? Typically around 30 percent, sometimes a lot more. Every day. No need to cut coupons or wait for sales. http://www.consumerreports.org/cro/magazine/2013/10/best-store-brands/index.htm

With few exceptions, generic basics like sugar, flour, salt, canned fruits and vegetables, and breakfast cereals are indistinguishable from their brand-name counterparts. Can you tell the difference between C&H sugar and Hy-Vee’s? Hy-Vee doesn’t have a sugar plant, so guess where they get it…

I do draw the line with generics for beverages and paper goods. I don’t know where generic soft drinks, juices and coffee come from (of course, I tried them … once), but there definitely is a difference. As for toilet paper and facial tissue, well, I’ll pay for the softer, thicker stuff. Fortunately, Costco’s house brand is superior to most generics in the grocery store, and about the same price, if not cheaper.

Is there a generic for that?

In the pharmaceutical world, generics take on a whole new level of savings. You won’t see this as much in over-the-counter medicines, where it’s closer to a grocery-style 30 percent (i.e. the difference between Tylenol, Claritin, Nyquil and the generics right next to them on the shelf). The price differences are more drastic with prescription drugs.

Almost 80 percent of FDA-approved drugs have generic alternatives that cost an average of four times less than the brand-name versions. Why? Because once a drug company’s patent expires (usually after 7-12 years), the formula is up for grabs and any FDA-approved manufacturer can make it – without spending millions on research, development and Super Bowl ads.

Remember, the FDA requires that all medications have the same active ingredient dosage and safety measures as the brand-name meds they're replacing. The quality is identical between the two products and the price difference can sometimes be shocking. http://www.fda.gov/AboutFDA/Transparency/Basics/ucm207016.htm

Anytime you or your spouse/kids are prescribed medication, be sure to ask your physician if there is a generic version available or an effective alternative. Many health plans will even refill some prescriptions for free if you have to take something regularly and opt for a generic and mail order service.

Don't fall for it

Branding has a powerful effect on our brains. How else do you explain our proven preferences for products we are familiar with, whether we have used them or not? http://money.howstuffworks.com/personal-finance/budgeting/10-items-you-should-always-buy-generic.htm

Don’t let it get the best of you and your budget. You probably spend more on groceries and medicine than you think. Generics can make those dollars go a lot farther. And since none of us are getting a 30 percent return on our money these days, that 30 percent savings can be saved and repurposed to help you with all of your other financial goals!

Kat's Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little one, is a manager with CommunityAmerica Credit Union. For more financial chatter, click http://twitter.com/savinmavens.

  Comments