Your local garage sale can teach you some valuable lessons about managing money.
With the warmer weather now upon us, a weekend drive should have you seeing garage sales and yard sales around every corner. Not only are these good places to pick up deals, you can learn a lot about basic finances from them.
Here are five important lessons:
Retail value is not true value
A garage sale is the perfect place to see that the retail value of something is not its true value. People don't want to sell things for less than they can, but you will see prices at garage sales that are well below their retail value, even for things that are new and still in the box.
You hear it time and again when talking about cars; a car loses a percentage of its value the instant it leaves the car dealer's lot. What most people don't consider is the same principle applies to almost anything you purchase.
Learn how to pay less
Learn to look at the retail price of anything you are considering purchasing as a starting point. You should be able to
and often much more.
If there will be no difference in the performance of the item, consider buying used instead of new.
Knowledge means money
When it comes to garage sales, those who know collectibles and antiques can make a pretty penny. What looks like a regular toy or an old dish to you and me can be worth much more to an avid collector, but unless you know this, you would never suspect it.
If you have deep knowledge on specific collectibles or antiques and what they are worth, garage sales can make you a nice second income with little effort.
In fact, there are many people who make their living by buying from garage sales and then reselling it to collectors.
Learn how to profit from your knowledge
If you have any interest in any type of collectible, it's worth your time to know it well and turn it from a hobby into something that can make you some money.
If you aren't sure, head to your local library and check out a book on antiques or collectibles and start reading about them in your spare time.
If something catches your interest, spend a little more time on
researching prices that it sells for. When you happen to come across one selling at a garage sale, you will know you have found a deal and you can ultimately turn your interest into an extra way to make money.
The price marked on items at garage sales (if they are marked at all) is not firm. Americans have become so used to walking into a store and paying the marked price that many feel uncomfortable asking for a better deal.
Even if you believe that you are good at bargaining,
Spending time at garage sales will give you a good chance to improve your bargaining skills.
Learn how to profit from bargaining
Once you learn how to bargain, there are a lot of ways to use this skill to
By simply learning to ask for a better deal on a consistent basis, you should be able to shave hundreds of dollars off of what you are currently paying, while getting the exact same services.
People buy a lot of junk
There's a reason all those people are having garage sales.
They have too much junk.
You'll notice at a lot of garage sales that, while the people selling want to make some money, a bigger motivation is often to clear out stuff they no longer need.
Learn how to profit from "junk awareness."
The fact is that
. By knowing and understanding this, you can avoid buying things you truly don't need.
Use outlets like garage sales, flea markets and online auctions to get many of the things you don't need at a great price, since others haven't figured this out.
If you have ever held a garage sale, you know that people will call to ask if they can preview the things you're selling, and some hardy folks will be in front of your house an hour before your posted time so they can look through your wares as you're setting up.
These are usually the resellers. They know they have competition in finding those great deals where they can make a profit, so they want first look at everything you have in order to have the best chance of getting them.
There is another group -- those who will stop by late in the day as you are packing stuff away, and offer to take a lot of the stuff for pennies on the dollar off even garage sale prices.
They know that most people are trying to get rid of stuff and will sell it at an even bigger discount, just to get it out of their house.
Learn how to profit from timing
Understand that timing has a large effect on how much you pay for things and in getting good deals. Get into the habit about thinking when is the best time to buy the things you want.
If you always buy the first time you see something or without time to do research, you will pay a lot more than if you can time your purchases for the best deals.
For example, learning to buy clothes in the off-season can mean savings of half or more. Learning the sales cycles of the regular groceries you buy allows you to stock up on them when they are selling for the best price.
Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs SavingAdvice.com.