Replacing the typical American breakfast with ready-to-eat cereals (RTECs) may improve diet quality. Our goal was to assess the impact of RTECs on diet quality measures for different age groups, using substitution modeling. Dietary intakes came from the 2007–2010 National Health and Examination Surveys (NHANES; n = 18,112). All breakfast foods, excluding beverages, were replaced on a per calorie basis, with frequency-weighted and age/race specific RTECs. Model 1 replaced foods with RTECs alone; Model 2 replaced foods with RTECs and milk. Diet quality measures were based on desirable food groups and nutrients, Healthy Eating Index (HEI)-2010 scores, and estimated diet costs. Model 1 diets were significantly higher in whole grains (+84.6%), fiber (+14.3%), vitamin D (+14.0%), iron (+54.5%) and folic acid (+104.6%), as compared to observed diets. Model 2 diets were additionally higher in dairy (+15.8%), calcium (+11.3%) and potassium (+3.95%). In Model 1, added sugar increased (+5.0%), but solid fats declined (−10.9%). Energy from solid fats and added sugars declined (−3.2%) in both models. Model 2 offered higher diet quality (57.1 vs. 54.6, p-value < 0.01) at a lower cost ($6.70 vs. $6.92; p < 0.01), compared to observed diets. Substitution modeling of NHANES data can assess the nutritional and economic impact of dietary guidance.