This weekend, I want you to collect all of your bank statements, credit card bills, Quicken reports, net worth statements, and piles of loans; hand them to a complete stranger. Let him read over everything, sift through your budgeting, and throw in a lot of hmms and mmms. What will he think? Are you spending money intelligently? Are you earning money intelligently?

I feel like I am always nitpicking at the financial behaviors I see in others—one friend spends too much on cigarettes and Mountain Dew. My cousin eats out too much, and my old roommate buys expensive furniture on credit that she’ll be paying off for years along with the newer, cooler car she just upgraded to.

Then I see people making money by selling plasma. Others spend their whole lives working to make their bosses rich (note to self: stop doing that!).

Yet I look at my own financial situation and find nothing wrong. I’m perfect! And I suppose that you are perfect, too!

The truth is—I attempt to admit to myself—is that it’s easier to find faults in the spending and earning habits of others than pin down problems in ourselves. But imagine handing over your finances to a complete stranger. He might find you and I have similar silly spending habits.

I’m not trusting any stranger. I’m pasting a fake mustache on myself and calling this new guy “Mr. Frank”. Mr. Frank is examining my habits. Heck, he’s already bombarded my kitchen to report an exceeding abundance of pasta and corn. He’s still trying to help me pinpoint illogical financial decisions. Has he found anything to report to you?

Are brand-name products worth the extra cost? Can you get the same results with generics and have a few extra dollars available for your next investment? US Airways Magazine writer Aviya Kushner answers this question with an affirmative yes. In her article Plain or Fancy? Should You Use Generics or Brand Names? Here’s What the Experts Say, Kushner argues that as long as the generic product contains the same active ingredients as its brand-name counterpart, consumers can save up to 50% by going with the generic option while getting the same results they are used to. However, Kushner warns that in some cases, the off-brand just won’t do. The present article offers some guidelines on how to determine which products you should buy generic so that you get the most quantity for your buck without sacrificing quality.

When it comes to both prescription and non-prescription drugs, it is usually okay to go with a generic brand. Dr. John Abramson of Harvard University Medical School says that “you need to know the active ingredient of the brand-name drug you want to buy the generic in… and you do have to be a good label reader.” (81). Dr. Abramson notes the importance of getting the chemical equivalent of the brand-name drug. For instance, “the chemical is the same, but the other components that make a pill or powder can be different… maybe that pill crumbles a litte bit easier, or maybe there’s a different texture to the powder” (81). In order to get the benefits of Advil, one can buy a store brand of Ibuoprofen such as CVS or Hannaford and get rid of that headache in the same amount of time. Yet, for other medical products such as earswabs, Abramson suggests that the brand-name may be better since there is no federal regulation stating that all Q tips must have the same amount of cotton (81).

As for food products, Kushner finds that at times it’s worth the extra money to buy brand name goods, especially if one is loyal to organic products. In an interview with Mollie Katzen, author of The Moosewood Cookbook and a consultant to Harvard’s Dining Services, the chef told Kushner that she is “conscious about… anything that needs USDA approval, [especially] dairy products and eggs because they can have growth hormone in them” (80). She is also aware of “package v. product.” Felder says that “nine times out of ten a generic product will be packaged by a brand name product and a lot of them come from the same source” (80). Eve Felder, associate dean at The Culinary Arts Institute of America tells Kushner that soy and corn oil are the only two generics she uses in her professional life, but at home she refuses to give up certain brand name products such as tobasco sauce and mayonnaise (80).

Ask Felder about the potency of generic olive oil and the consummate chef’s eyes light up. She says, “Olive oil is just like wine… it’s a fruit, and and a vintage. It’s not so much a brand, but which harvest. Did Spain have a really good harvest this year or did it rain a lot?” (80). Salt and honey are other products Felder never buys generic. She also recommends that people buy brand-name knives, although generic wooden spoons are permissable (80).

Kushner also discusses the viability of generic cosmetic and personal care products. According to Etienne Taenaka, winner of the Los Angeles Blow Dryer of the Year Award, given by Harper and Queens, it’s fine to go generic with blow dryers and combs, but not with brushes or shampoos. He enthuses, “brushes I’m very particular about, because many generic brushes are made in such high volume that the way they’re glued onto the base will pull the hair. With a well-made brush, the ball and the bristle is all one piece” (81). So next time you go to the salon, buy a Mason Pearson brush instead of a Goody brand at the drug store. It will last much longer and you’ll keep your hair longer too.

The bottom line: If you do your research and pay attention to the labels, you can be a smarter and wealthier consumer, but don’t be afraid to pay more for brand name products if the generic substitute is not a generic equivalent.

Sources:

Kushner, Aviya. “Plain or Fancy? Should You Use Generics or Name Brands? Here’s What the Experts Say” in US Airways Magazine, Aug. 2006 (Greensboro, NC: Pace Communications). pp. 78-81.

Welcome to The Carnival of Personal Finance #64 hosted right here at Aridni! We’ve got a huge number of articles this week. Apparently everyone is trying to make up for the day off for Labor Day by working twice as hard. =P

There are an even 50 articles being posted here, so put your reading glasses on and get to the Personal Finance! (do people still use reading glasses?)

We’ll start off with last week’s host 1stmillionat33 who gives us some investing advice My investing advice if you have $1000 to $10000

“Finding a new job can be a daunting challenge. But if you follow my simple 21-step plan, you’ll soon be battling cranky alarm clocks, rush-hour traffic, and the “living for the weekend” daily grind.” Madeleine Begun Kane presents Working Stiffed posted at Mad Kane’s Humor Blog.

“Your kids are starting out strapped because they haven’t been taught how to fend for themselves properly because YOU were so busy working your tail off trying to keep a roof over their heads!” Frugal Wisdom from Wenchypoo’s Warehouse: Another Book You Shouldn’t Bother Buying–Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead

What does a credit report look like? How can I read one? If I’m running a credit report on someone, what sort of information should I be looking for? The anatomy of a credit report

Think your finances are screwed up? It could be worse. You could be Jack Bauer, who needs much more than 24 hours to get his money house in order. Here’s something Jack Bauer can’t fix in 24 hours

From Opportunities Aplenty we find out How Aussies Get to Pay Off Their Mortgages Early

Errors on medical bills are more common than many consumers realize. This post includes steps for detecting, correcting and avoiding billing errors at the hospital and at the doctor’s office. The Frugal Duchess: Watch out for Medical Bill Mistakes!

A lot of peole are scared to start saving their money because it’s a scary world. People don’t know a lot about it and therefor scared of it. Here is an article that explain one of the most basic things that people see all the time. What Does the Dow Jones and Nasdaq Mean on the Front of My Yahoo/MSN homepage?

3 ways it costs more to be a women is Adult ADD and Money’s followup to 3 ways it costs more being a man

We’ve all heard “don’t put off for tomorrow…” but it can be sound financial advice when considering insurance. A health problem can mean a big insurance problem, as well. Bob Vineyard explains. Cost of Delay

How much does an average nursing home cost?A post about the cost of nursing homes in retirement and how to plan your retirement to protect you against that possibility.

Not dividends, not growth, but both. HJL wants to let you know why he love investings in companies that pay and are increasing their dividends.

Tired but happy has to make a choice between Roth versus the 401k.

A new blog that has popped up in the last month, My New Choice, looks like it is off to a great start. They bring us a Strategy to Curb Impulse Buying

Jim at Blueprint for Financial Prosperity is going to be keeping a good chunk of change. If you need to work on your home you might be able to as well. Energy Policy Act of 2005 Saves Me $500

FMF gives us the math behind his own retirement number How I Set My Retirement Number

(Continue reading this article…)

When I was a little girl, it took me several tries before I finally mastered the art of riding a bicycle that was not equipped with training wheels and a pink and white basket. Conversely, when I was a high school student, it took me more than one trip to the DMV before I was the proud owner of a driver’s license. In short, moving vehicles are not my forte. But for real…in the midst of my maneuvering mishaps, I learned a valuable lesson:

It often takes more than one failure to perfect (or at least improve) the status quo.

The same situation applies to money management. I entered college completely oblivious about anything and everything that has to do with handling money. However, over the past year, I have learned more about money control than I ever learned in the past two decades. After my Dad set me up with a checking account at a local bank within the first few weeks of my college career, I took advantage of the belief that I had plenty of money to last me a semester. Nevertheless, as the weeks started to pass and my bank account started to dwindle, I realized that money is not disposable, especially since I did not have a job to replenish what I was spending. Wow; I could say that I had an epiphanic moment…or I could say that I had just gotten some common sense knocked into me.

It took me a couple of arbitrary purchases and a shameful conversation with my Dad in order for me to learn my lesson about money management in college. As I am entering my sophomore year, I feel as though my checkbook is in a better place than it has ever been. I regularly do several small tasks in order to make sure that my money is under control…under MY control.

First, I balance my checkbook on a regular basis; therefore, I always know the status of my checking account. One of my initial mistakes was writing checks and not recording the information in my checking log for several days, often weeks.

Next, my paycheck is directly deposited into my bank account. I worked at a food establishment for a summer in which I received weekly checks that I cashed at my workplace. It was definitely tempting for me to purchase unnecessary items while carrying around a wad of cash, using that rationale that I had plenty of green paper to justify the purchase. In layman’s terms, go for the direct deposit route.

Further, it is imperative to be intentional about purchases. Don’t go shopping just for the sake of going shopping; be evaluative. If you realize that you need a new pair of tennis shoes, go to the store to buy a new pair of tennis shoes; do not meander into another department or even check out the clearance racks. It does not matter if something is a good deal, for it is not worth buying unless you really need it.

After traversing over gravel for a little too long and getting stuck in one too many potholes, I feel as though from here on out it will be smooth sailing.

This week’s guest writer is Laura. We know that she’s a fantastic biker now, an avid reader, and a wild singer. She loves giving back to the community, and Aridni feels lucky that she’s offered her Indiana perspective for our Saturday Strategies.

If you’d be interested in being our next Saturday Strategist, let us know..

One year ago, my husband and I established a budget for ourselves. We were going to pinch every penny so that we could walk out ahead in a year. Our only source of income would be his 9 to 5 job as I finished school.

I found our old calculations last night, and you know what? Our plan equaled a negative net worth. Between student loans, wedding expenses, and other elements of past life, one year of penny pinching would have equaled a net worth of about negative $4,000. How could that be? So much hard work…

Our problem was that we lacked multiple streams of income. If you want to make money, you have to increase your earning power outside of 9 to 5. We chose to use our weekends. Our efforts make our net worth something exciting to look at. In fact, our weekend work has been the equivalent to nearly TWICE my husband’s salary. Plus our hard work this year will continue to pay us in the future with small effort on our part.

When you work for someone else, the rewards are instantaneous. Of course, it took months before our efforts were rewarded. We juggle with little spare time, large credit card loads, and a whole lot of loans. But we have something bigger and more valuable to back each of those expenses today.

So this weekend, I challenge you to find something outside of 9 to 5 that can increase your wealth in the future. The sense of accomplishment will, I guarantee, far exceed any thrill that your paycheck might provide.

In a society where most people are paying for their goods with plastic, it is very easy to spend more at the “cash” register than we realize. Many of us throw our credit or debit card on the counter without paying attention to the strain on our pocket books unless it’s some ridiculous amount; however, each penny makes a difference. Imagine how much we could save if we paid closer attention to the total! One way to save is to buy store brands as often as possible. 90% of the time, they are the same quality as the name brand and are up to 50% cheaper.

Here’s an example: I was in the middle of a transaction at CVS today when the clerk said “8.75.” I stood there shocked since I was only buying one box of CVS brand trash bags and a Mead single subject spiral bound notebook. Cheap, right? “How did this get to be so expensive”? I asked him. “I thought that the notebook was 25% off.” Apparently, I was wrong. That bargain applied to a different notebook. I decided to not get that notebook and walked back over to the aisle to see if there was a cheaper option. It turned out that I could buy TWO CVS brand notebooks for just $1.00, assuming I had my Extra Care Card handy which I did. The clerk was just as surprised as I was. Instead of spending over $4.00 on one Mead notebook, I got 2 CVS brand notebooks for less than the price of a single brand name one. I only spent $5 something instead of $8.75 and I could either spend the difference on a coffee or put it in a savings account.

The lesson? Carry a small calculator when you go shopping and tally up the goods in your cart before you stand in the checkout line. This will help you “count the bills” and you will have hopefully selected store brands when available. When the cashier tells you your total, you shouldn’t be surprised.