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Personal Finance Lessons Learned from Yard Sales

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by , 05-17-2009 at 02:50 PM (5368 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

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Comments

  1. C@rol's Avatar
    As a yard sale shopper, I have also learned many personal finance lessons, many of them complementary to those learned as a seller:

    Value is relative. Something is worth only what you are willing to pay for it (and what the seller is willing to sell it for). The same item might cost $30 brand new, $0.50 at a yard sale, and $10 when sold at an online auction. Knowing the retail and typical yard sale prices for things you would like to own can help you recognize good deals. Yard sales provide amazing savings opportunities, even compared to discount stores and closeout sales. You don’t even have to hold a yard sale to make money from one — when you recognize underpriced items, you can buy them to resell online.

    Some prices are negotiable. Though some sellers are offended by buyers offering lower than the marked price (usually those who regret paying as much as they did in the first place), many others are just glad to get rid of the clutter. Some aren’t really sure how to price an item and expect to receive lower offers. Whatever the case, it doesn’t hurt to ask if a seller is willing to negotiate. The same goes for shopping for new, big-ticket items and services: politely asking if the seller can offer a better price frequently yields savings for the buyer.

    Tags and boxes mean higher prices, but they don’t mean much else. When shopping for yourself, it’s not difficult to find almost-new items at yard sales that are priced lower than and work just as well as those that are new with tags. After all, once you take the tags off at home, the item will be used, anyway. Why not let someone else eat the cost of depreciation and buy quality, lightly used merchandise (tax free!) for far less than what you’d pay new?

    A little creativity can provide big savings. Yard sales often have unusual gadgets and things that have been adapted by the seller to meet a purpose other than what was originally intended for the object. Keeping an eye open for “new” old things at yard sales can help you imagine new ways to use the things you already own and save you money by eliminating the need to buy something different to meet each need.

    Saving can be fun. Seeing all the things other people have accumulated can be fascinating and inspiring. Yard sales can introduce you to new, interesting people and can help you find things you have in common with your neighbors. (”I never knew you collected salt and pepper shakers, too!”) Browsing community yard sales is a great way to enjoy a stroll outdoors, and finding a great bargain can be exhilarating. Saving money doesn’t have to be drudgery!

    A bargain isn’t a bargain if you don’t use it. As many sellers learn, small amounts add up. For this reason it is possible to overspend at yard sales. Buying something just because it’s a great deal is even easier to do at yard sales than at clearance sales. No matter how much or little you pay, buying something you fail to use is still a waste of money.

    The early bird gets the worm. Most yard sales have only one of each item on sale. If someone else gets it first, you miss out. Many savings and earnings opportunities are limited to a certain number of people; you have to be alert and prompt to take advantage of them.

    A lot of people can overlook great bargains. Even though the early bird usually gets the worm, there are often enough great deals left for latecomers. Recently, I went to a yard sale late in the morning on the second day. Much of the merchandise was already sold (as I could see from the empty spaces on the tables), but I did find an unusual $2.00 Mr. Potato Head I thought my kids would enjoy. It was still in the box, so I looked it up on eBay, which I often do when I find something in great condition at a yard sale. When I learned that the last one up for auction had sold for $61, I listed the collectible spud and earned $101 from my $2 purchase. I wonder how many other people considered and passed over that Mr. Potato Head before I arrived at the sale.

    Many great things are free. Don”t neglect the free boxes at yard sales. You may find just the thing you need. Freebies are abundant; though many of them are worth little in themselves, you are still saving money when you take free things you can use (and would otherwise buy).

    Shopping around can pay off. Yard sale prices are often the best prices you can find, but there’s nothing wrong with passing up a deal when you think something at a particular sale is slightly overpriced. You may find the same thing for less at a yard sale around the corner; you may even find the same thing for less in the bargain bin of a retail store.

    A smile goes a long way. Being friendly and polite to sellers makes many of them more willing to negotiate on prices. Going to a sale with a negative, demanding attitude turns people off and makes them less eager to pass their former treasures on to you. In cases where prices are unmarked, your attitude may make a difference in the prices quoted to you. It’s the same with any time you complain to a company or request a better deal; your attitude can make the difference between a positive and a negative outcome.

    If you have the time and inclination to go to yard sales, they may be the most profitable saving activity you engage in! Even a few visits here and there can make your income stretch and can teach you a few things about personal finance that you can apply to all areas of your life.

    -Author: S. Christman
  2. mauimagic's Avatar
    Great advice and ideas - mahalo for sharing.