Personal Finance Lessons Learned from Yard Sales
by, 05-17-2009 at 02:50 PM (5700 Views)
It’s that time of year again. Some of us know it as spring; others call it the start of yard sale season. Yard sales (also known as garage sales, tag sales, rummage sales, and stoop sales) attract an interesting and diverse subculture of bargain hunters, environmentalists, and treasure hunters; they are an interesting form of community commerce. Both buyers and sellers at yard sales are likely to have learned some broadly applicable lessons in personal finance. I know I have!
As a seller in an annual neighborhood yard sale, I have learned:
Cars aren’t the only things that depreciate as soon as you buy them. It doesn’t matter how little you have used something; unless it is an antique, it is worth far less at a yard sale than it is on the shelf of a retail store. For this reason, it’s worthwhile to consider how much you will use any new purchase you make — do you believe you the value you get from that purchase will be worth the price?
You can’t make up for sunk costs. Sometimes when people have buyers’ remorse, they try to sell things for close to the price they themselves regret paying. You might find someone else who is as big a sucker as you are, but more likely, trying to recoup the money you lost in a bad purchase will scare off buyers, who will recognize that they could buy the same thing new from a store for the same amount and think all of your stuff is overpriced. When you regret a purchase, the best you can do is forget what you paid, price it according to the going yard sale rate, and hope to get a portion of your money back.
An item with tags or in its original box can bring a slightly higher price. People won’t pay as much for something at a yard sale as they would in a retail store, but tags do add some value. Buyers are more likely to buy an item that appears new to give as a gift — people like to pay low prices for gifts, but they don’t want recipients to know they did.
Almost anyone can make a little extra cash when money is tight. Most of us accumulate far more stuff than we realize, and closets may be a cache of enough yard sale merchandise to pay for a week’s groceries or even, in some cases, a short vacation. A more general personal finance application is the idea that income doesn’t have to come only from wages; it is wise to keep on the lookout for additional streams of income.
You can make money in your leisure time. Yard sales are a lot of work, but they can also be fun — they’re a great opportunity to chat with neighbors and meet new people who may be as enthusiastic about your stuff as you are. Whether you hold a yard sale or discover the excitement of “playing” the stock market, you don’t have to be on the clock to make money.
Small amounts add up. Even if you don’t have many high-priced items to sell, you can still make money on a yard sale. Take in a quarter here, a dollar there, and you may be surprised at the total you have at the end of a sale. It’s exactly because many people underestimate the value of small things that charity and church yard sales are so successful; charities can easily convince people to donate their castoffs and can make a significant amount from those “worthless” items. Think of these yard sales whenever you need to remember the value of small savings and the cost of small expenses.
Preparing ahead and getting up early can give you a boost. Some enthusiastic yard salers will show up long before the advertised start time. If you are prepared to greet them, you can make some sales that your neighbors miss. Being early and being prepared will help you take advantage of many profitable opportunities in life.
Being frugal pays off in the long run. If you keep your things as long as they are useful, as opposed to continually upgrading everything, you are far more likely to find antiques in your home when you’re older. That old toy from your childhood, your vintage costume jewelry, even some household items (like a decorated metal dustpan and brush) may sell for more than the retail value of a contemporary replacement. Those of us who live frugally, of course, know that we see other rewards of frugality long before our possessions become antiques.
Freebies foster good will. Having a box of freebies at the front of your yard sale draws in some reluctant shoppers and allows others to make use of some things you might otherwise throw away. Freebie boxes demonstrate attitudes of generosity and a wise use of resources. Giving even “junk” to others often leads to returned acts of generosity that benefit you and your finances, too.
Don’t forget the competition. Even in a community event like a yard sale, some level of competition exists. Buyers are choosing to come to your sale based on what other activities are available to them that day. They are comparing your prices to those of other yard-sale sellers and to retail stores and online auction prices. You might have great stuff at bargain prices, but you still might not earn as much as you expect. Like any money-making opportunity, the earning potential of a yard sale is limited by many outside factors, including local market conditions and the weather.
A smile goes a long way. Browsers are more likely to become buyers if you seem friendly and helpful. As in much of life, those with positive attitudes are likely to do better than those who are always grumpy.
(See the rest of the article below.)
-Author: S. Christman