Is Holding a Garage Sale Worth It?
Is a Garage Sale a Good Way to Make Money?
Initially, I was afraid to hold a garage sale, as I worried it was too much work. Yet, before a move from Ohio to Pennsylvania I decided to find out for myself the answer to the question, “Is Holding a Garage Sale Worth It?”
Have you ever participated in a garage sale?
Are you thinking about holding a garage sale?
You’ve collected a lot of stuff, your closets are bulging, and who doesn’t want extra cash?
Although a garage sale appears to be the perfect way to get rid of old stuff and earn extra cash, holding a garage sale may not be the best way for you to make money.
Consider Money Versus Time When Holding a Garage Sale
I was raised to look for any way to get value from spending. That meant, if we could get two pair of shoes at Sears or one at Macy’s for the same price, we’d shop at Sears.
Although quality was important in my family, price trumped all.
Growing up, when eating out, we ordered from the right side of the menu. The cheaper items were the ones we chose.
But, there’s one money concept I didn’t learn until I was in my 20’s.
Before deciding whether having a garage sale is worth it or not, consider the value of your time. While working at San Diego State University, I went to a workshop by a budgeting specialist. She shared a story that changed my way of thinking forever.
Katrina, the budgeting and management professor divulged that she hated grocery shopping. It was her least favorite activity. Because she was very clear on the value of her time, and well aware that grocery shopping was unpleasant, she made a conscious choice to shop fast, with little regard to price. Since her time was valuable, and Katrina was deliberate in how she spent her time, she paid no attention to price when she grocery shopped.
Her message was clear; be aware of the time you trade for your money.
At work, you trade your time for your salary. At the grocery, you trade your salary and your time for your food.
There’s a price on your time. Ask yourself; Is it worth it to spend an hour at the grocery to save $10.00? What if you could earn $20.00 per hour? But let’s complicate the equation even more, what if you have fun shopping and you like to save? Then, even if you’re spending one hour to save $10.00 and you’re having fun, then maybe that extra time spent is worth it – even if you could have earned $20 with your money doing something else.
There’s no right answer to the money versus time answer.
If you have fun shopping and enjoy couponing, even if you earn $30 per hour (at your job), it might be worth it to you to spend 2 hours couponing in order to save $20 at the supermarket. Yet, even if you earn $30 per hour at your job, you may not have the opportunity to work additional hours at your workplace. In theory, if your job pays $30 per hour, then 2 hours couponing should save you $60 in order to be worth it.
But that’s not quite accurate. Maybe you’re spending 2 hours couponing that you ordinarily spend watching television. And that leisure time doesn’t pay you anything. (Unless you’re multitasking and completing surveys for pay while watching tv). In which case, the 2 hours you spent couponing and saving $20 at the supermarket is “free money”.
This entire time versus money concept is tricky. Actually, it’s something to think about, not a perfect strategy for determining how to spend your time (or money). Think of the value of your time as a guideline for spending and activity.
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Our First Garage Sale
We were moving from Ohio to Pennsylvania and had accumulated a lot of stuff while living in the Midwest for 9 years. Hoping to attract a lot of buyers, we partnered with other homeowners on the block for a community garage sale. Our strategy worked. We spent days sorting, labeling and merchandising all of our stuff. With a lot of toys, children’s items, a video camera and an expensive play set, we earned close to $1,000.
The entire experience was not fun! It took several weeks to get everything in order and a few days to set up and another day to sell. All in all, I was pleased with the money, and hated the process. After that garage sale, I vowed never to have a garage sale again.
Garage Sale #2 – Is Holding a Garage Sale Worth It?
We were moving again and I considered once more whether holding a garage sale is worth it or not. Although I disliked holding garage sale #1, with almost a decade since the first garage sale, and the memory of $1,000 on my mind, I decided to break my vow and hold another garage sale.
During our second garage sale, in 2011, I was three hours into the garage sale and my daughter and I made about $400. Now $400 is a nice piece of change, but I had to ask myself, is the cash worth the time and effort? A decade later and I still wasn’t enjoying it, although my daughter was a lot more help than at the first garage sale.
During the down time, waiting for customers to buy our stuff, I decided to figure out the cash value of holding a garage sale.
Economic Analysis & How Much Time Went Into Setting Up the Garage Sale
As a light drizzle began to fall, I decided to figure out the dollar value of our garage sale.
- Two days sorting through our valuable goods
- Three days organizing, merchandising
- One day selling
- Total time spent about 48 hours
- Total revenue: $400 revenue
- Hourly income rate: $8.33
So here’s the financial reward-$8.33 per hour. But, that doesn’t take into account the opportunity cost of the entire 48 hours. (In the end, we worked a bit more and made a few more dollars, but not much!) In economic terms, opportunity cost is what we gave up during those 48 hours we were working on the garage sale.
Back to the money vs. time question.
For example, what else could I have done with the 48 hours I spent working on the garage sale? This is the type of data to consider when asking yourself whether holding a garage sale is worth it.
Here are some “what ifs”. If I could have earned $40.00 per hour during those 48 hours, then I gave up $1,920. If I loved holding garage sales, and that pleasure trumped the money, then the financial gain was secondary to the enjoyment of the activity.
This decision is more difficult than meets the eye, yet it’s similar to many other choices we make in life. Should I leave work early to attend juniors soccer match? Should I work Saturday to try and get a promotion and give up a trip to the outlet mall with friends?
Every decision has an embedded trade off. A garage sale is no different.
How I Decided Whether a Garage Sale Was Worth It or Not
Four hundred dollars was a lot less than the $1,000 we made at our first garage sale. An hourly rate of $8.33 isn’t great pay for 48 hours of work.
I don’t like holding a garage sale.
Although I enjoy purging, organizing, and selling, I hate all three together in the form of holding a garage sale.
For me, holding a garage sale isn’t fun.
Financially, it is a loss. I could make more money doing something related to my business.
Enjoyment, it is a loss. The only fun part was hanging out with my daughter, and it would have been more fun doing something else like going kayaking!
After several decades of working, saving, and investing, we have alternative ways to make money.
Our Garage Sale Alternative
Donate to Charity Instead of Holding a Garage Sale
What if we’d donated everything from the garage sale to charity? Here’s how that scenario would have played out:
- Two days (or less) sorting through our valuable goods
- Donate all of the goods to charity
- Actual value of everything: approximately $1,600.00
- Take tax deduction on income taxes
- Tax savings at 28% marginal tax rate = $448.00
- At 16 hours of effort, donating to charity is equal to earning $28 per hour.
Had I donated the items to charity instead of holding the garage sale, it would have been a win-win for me. Donating the items to charity nets $448 in the form of tax savings and eliminated the distasteful task of holding a garage sale.
Is Holding a Garage Sale Worth It? The Final Analysis
Here’s the summary of our garage sale event:
We donated to charity the items that did not sell. These were worth about $400.00.
So, we made a bit over $400.00 cash and will realize a tax deduction of $112.00 (28% of $400) for a total gain of over $500.00.
Financially, the best alternative is to have a garage sale and donate what’s left.
Every decision can’t be determined at the cash register. There are usually other aspects than money to a decision.
Due to the unpleasantness of the garage sale event, and our stage in life, holding a garage sale wasn’t worth it.
For you, the answer might be different. Our neighbor has a garage sale every month, has it down to a science and nets a tidy extra income stream!
Today, as you complete your daily activities, ask yourself this question,
“Is the time I am spending on this particular task, worth the benefit I am receiving?”
When it comes to making a big decision, think about what you value, how much your time is worth, and whether the activity gives you enough financial return for the effort expended.
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What are your garage sale stories? Like them or not?
A version of this article was previously published (comments remain).
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