Canadian Finance Blog

What Do Garage Sales Teach Us About Money?

Posted: 07 Jun 2011 02:00 AM PDT

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?

What Do Garage Sales Teach Us About Money? originally appeared on Canadian Finance Blog on June 7, 2011.

Life Insurance Blog

Tuesday, June 7, 2011