Financial Literacy

What Do Garage Sales Teach Us About Money?

Many would agree that garage sales and frugality go together like peanut butter and jam.  This weekend, we had a short 3 hour garage sale.  Although I consider myself somewhat frugal, I am not a big fan of having garage sales.  It all came together because one of our good friends decided that it would be great to have a multi-family sale where the kids would pick and choose toys and items that they wanted to sell.
In theory this sounded like a better idea because there was some entrepreneurship lessons, neighbourhood bonding and a means to purge and re-organize.

It was not financially rewarding

We had a 3 hour sale and we made just under $200.  If you add in all the time preparing for the sale, that was a really bad return on effort.  This is precisely why I don’t like garage sales.  However, my wife was quick to point out that the process of purging and organizing has to be done regardless of whether the items are sold at a garage sale, given to charity or to friends or thrown away.  She felt that making a couple of hundred dollars for a days work was a bonus for something that needed to be done anyway.  She has a bit of a point!

It feels good to get rid of stuff

It’s no secret that to be productive, you have to be organized.  For many, it can be tough to feel organized when your life is cluttered with stuff and messes.  It always feels good to cleanse and get rid of things.  Although we did not make a lot of money, it sure felt good getting rid of stuff and getting re-organized.  The garage sale really motivated us to make this happen.

Some things are better sold elsewhere

Although I like the idea of getting rid of stuff, I have found that selling things on Kijiji, ebay or craigslist is better, especially for bigger ticket items.  In the electronic world, there are great sites that pair sellers with buyers without having to put on a garage sale.  As we went through items, I put some stuff on Kijiji and made more money than the whole garage sale in a more efficient way.  These sites have becomes the replacement for garage sales.

We spend a lot of money on junk

Most of the items we sold were toys and things for the kids and it was interesting to imagine the retail value of the stuff we sold for a couple of hundred bucks.  A garage sale can be a terrific reminder that spending money can be fun because it make us feel rich but it’s important to look at what you spend your money on?  How much of your money is going to things that appreciate in value?  How much of your money is going to things that depreciate and how much just goes to junk?

An opportunity to teach my kids about money

As much as I am not a fan of garage sales, I did enjoy the opportunity to teach my kids a few financial lessons:

  • It takes hard work to make money. Right from the get go, we put the kids to work (especially my 5 and 7 year old).  They had to go through their toys and figure out what they wanted to sell. In order to sell some of their things, they needed to find all the parts to the sets which was not always easy to do. We also made sure the kids were part of the set up and clean up. In the end, they did not work very hard so I told them their mother was going to get all the money.  They were not very happy with that idea and went sucking up to mom to get their share.
  • It’s easy to waste money on things that do not keep their value. As we went though their toys, I kept trying to explain that the things they were now selling for $2, $5 and $10 used to cost a whole lot more. I’m not sure they got this message because after the sale, they wanted to buy more crap with the money that was made.  I’ll keep trying!
  • Buying used is a way to get more for less. Because this was a mutli-family sale, there was lots of good quality toys from other neighborhood children going for really cheap prices.  I talked to them about looking for used stuff instead of buying new which could save them a lot of money.  The problem is now they want to spend the next weekend going to garage sales.  Maybe I’ll teach them how to do some searches on Kijiji.
  • Save, spend, share. I’ve been trying to teach my kids about money for quite some time now and the last lesson is one that I have started long ago.  Every time they get money whether it’s allowance or birthday gifts, they cannot spend all of it.  They now know that part of their earnings from the garage sale has to be put away in their share and save accounts (piggy banks).  It’s really important that I help them develop a savings habit.

What do you think of garage sales?  Are there other good financial lessons from them?

Comments

  1. cashflowmantra

    The most interesting thing about a sale we participated in a year ago was watching the kids. They cleaned out their rooms and were able to sell any toys that they didn’t want to keep. They had the responsibility of pricing and negotiating. It was fun to watch and one of my sons sold some video games and made $70 in about 2 hours.

  2. Shaun Somers

    We had a garage sale on Saturday too. I managed to get rid of some stuff that had really been hanging around for no reason.
    Coupled with the fact that it’s a chance to meet with neighbors and teach kids about money I think it’s well worth the time and effort.
    My friend’s daughter made up a couple dozen cookies and sold them all at 2/.25 – that’s an education she can use in life!
    My post about the sale:
    http://bit.ly/kTZJ2f

  3. krantcents

    The only garage sales I have had were when we moved. It was a way of getting rid of stuff, we did not want to move. The last one made enough money to pay for our move ($700).

  4. My University Money

    I agree that by and large garage sales just aren’t worth effort. I do remember as a kid that I had given my little brother a bunch of stuff he said he really wanted. I didn’t care or had outgrown most of the items so I agree to give them to him. Two weeks later he promptly took almost everything I gave him and sold it at our Aunt’s garage sale for over a hundred bucks (big money when your 10)! My first lesson in entrepreneurship you might say.

  5. Miss T

    I grew up with garage sales. If we weren’t having them we were shopping at them. They can work out great for getting stuff at low prices. But like you said, we have to much crap. The fact that we need to have them is problem in itself.

    Great post. Really helpful.

  6. Brian

    Hi Jim,
    I agree with all of your points yet you preface the article saying you don’t think garage sales are a useful endeavor. I think your wife managed to convince you before you finished writing! I’m a huge fan of garage sales as a means for purging; it has to be done anyways, might as well make a few bucks. I also agree craigslist is better for big ticket items, but don’t forget to advertise your garage sale there too

  7. No Debt MBA

    I agree with your wife. I’ve found that the organizing and deciding what to get rid of process is pretty time consuming but well worth it.

  8. Matt

    A garage sale makes you realize how much stuff or in some cases, junk, you accumulate over the years.

  9. Julie

    I congratulate you for the idea of organizing a garage sale with some other families you know. I know you didn’t feel it as especially rewarding (the effort of organizing the sale exceeded the amount of money you actually earned), but there are some good points about this kind of sale. Your family (and especially your kids) realized that they have the habit of spending hard-earned money for things that lose value in time, and next they would consider buying second-hand items, which can be resold. They understood the importance of organizing the sale: categorizing the items, placing price tags on them, putting the attractive items in plain view, packaging the similar items together in order to give it at a single price, etc.

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