Barbara Friedberg* says that while holding a garage sale might be the perfect way to get rid of old stuff, it might not be the best way to make money.
Photo: Jodi Jacobson
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.
Before deciding whether to have a garage sale, consider the value of your time.
I once attended a workshop by a budgeting specialist, who shared a story that changed my way of thinking forever.
She divulged that she hated grocery shopping.
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, 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 supermarket, 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 supermarket to save $10?
The flipside of course is, what if you have fun shopping and you like to save?
Then, even if you’re spending one hour to save $10 and you’re having fun, maybe that extra time spent is worth it.
There’s no right answer to the money versus time answer.
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.
Our first garage sale
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, labelling 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.
I vowed never to have a garage sale again.
Garage sale #2
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 in 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.
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 organising, 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 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 my child’s soccer match?
Should I work Saturday to try to win a promotion and give up a trip to the mall with friends?
Every decision has an embedded trade off.
A garage sale is no different.
How I decided whether the garage sale was worth it
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, organising, 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.
In terms of 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 with her!
After several decades of working, saving, and investing, we have alternative ways to make money.
Financially, the best alternative is to have a garage sale and donate what’s left, but 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 neighbour has a garage sale every month, has it down to a science and nets a tidy extra income stream!
* Barbara Friedberg is an investment and wealth-building expert. She tweets at @barbfriedberg.
This article first appeared at barbarafriedbergpersonalfinance.com.
