Monthly Archives: May 2010

Having a Successful Garage Sale

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A successful garage sale may at first seem like a quick and easy way to make some cash. And while this is true, if you want to earn some decent income for your efforts, you need to tackle this project using some basic garage sale tips for success.

Westnedge Hill Garage Sale 5 by BrownPolyester on Flickr

Duration

While a one-day garage sale may yield a desirable turnout, multi-day sales are not only going to draw in more shoppers, but will also present some creative pricing strategies.

Check your local newspaper to find out if your town will be hosting an area-wide garage sale event. Taking advantage of these organized sales not only allows for a little free advertising, but will bring in a lot more traffic as well.

Sorting

Organize clothing items by men, women and children and put on separate tables. Consider placing similarly-sized garments in a box or bin and simply labeling the box (for example, “Kids Socks – $0.25/pair”). If possible, put more formal or business-type clothing on hangers and hang on a rolling rack.

Sort the remaining merchandise by categories such as toys, kitchen, books, CDs, bathroom, hobbies, sports, etc. and try to have at least a little separation between sections. Keeping these items tidy will make it easier for garage sale shoppers to sort through.

Advertising

Even if you are participating in an area-wide garage sale weekend, you should still do some of your own advertising. Placing an ad in your local newspaper a few weeks leading up to the date will help bring in more shoppers, increasing your chances of having a successful garage sale.

Be sure to include your address, the hours of the sale, and any pricing specials you plan on running, or any other feature that may be unique to your sale, such as specialized or collectible merchandise.

Post signs in key areas surrounding your neighborhood such as busy intersections. If this is not an option, park one or two cars on busy streets with signs announcing the pertinent sale information.

Websites like BuildASign.com allow you to put together nice signage that you can reuse for multiple sales, or if you have neat handwriting, brightly-colored poster board and a Sharpie marker will do the trick, too.

Consider adding a quick post to Craigslist announcing your garage sale. Again, be sure to include the address of your sale, the date and hours.

Pricing

Pricing is the key to having a successful garage sale. If you do not price your items appropriately, you will lose potential customers who are often seasoned bargain hunters. While some pieces of furniture may merit a higher-than-normal price tag, you should always ask yourself what you would be willing to pay for each item.

Merchandise that has sentimental value should be priced according to their actual value. Potential buyers do not consider your personal attachment when preparing to offer a bid.

If you are hosting a multi-day garage sale, items should be marked at regular prices on the first day with a gradual reduction in price as the end of the sale approaches. On the last day, prices should be slashed across the board, unless you do not mind having to deal with a large stock of leftover merchandise.

Garage sale pricing is not just about making a lot of money, it is about selling as many items as you can (which will have the double benefit of earning money and getting rid of clutter).

Clothing is generally priced by function and condition.

  • Prices for casual adult clothing, depending on the condition, can start at $.50 and top out around $8.00.
  • Business and formal attire such as dresses and suits, if in good condition, can be priced up to $6.00-$10.00 for sets.
  • Winter coats should be no more than $15.00-$20.00.
  • Shoes can fetch from $4.00-$8.00 depending on style, and socks should never be priced more than $1.00.

Brand name clothing can be priced slightly higher, depending on much the items will cost if purchased new. Here are some other general pricing tips:

  • Toys, such as dolls and board games should be priced from .10 to $1.50.
  • Electronic games can fetch up to $20.00.
  • Books, CDs and DVDs should be priced from .50 and up to $20.00 for new items or sets.
  • Televisions, microwaves and other electronics can be marked at 30% off the original purchase price, but no more than $30.00 total.

Cash Transactions

You should have $50.00 to $100.00 in change including plenty of singles, fives, tens as well as a few rolls of quarters, dimes, and nickels. Keep a calculator on hand to avoid any mathematical errors.

If there is more than one person selling items in your garage sale, be sure to track the sale of each individual’s items in a notebook so that the money can be divided appropriately at the conclusion of the sale.

Use different colored garage sale price stickers to provide a fast and easy way to identify these items, and track sales in two (or more, depending on the number of people participating in the yard sale) columns on paper.

Safety

While a garage sale implies the availability of a garage for overnight storage, this might not be an option for everyone. If you do not have access to a garage or lockable shed, be sure to remove any valuable items for overnight storage.

Use the buddy system. Work in pairs, at a minimum, and never leave the cash box unattended.

If large amounts of cash accumulate in your cash box, consider counting out $100 or so and making a “drop” by hiding cash inside your house and out of view of garage sale shoppers.

Leftovers

Any merchandise that has not sold at the conclusion of your garage sale can be donated to charity. Some charities require prior approval of donation items, so before you load up your truck and head to the local drop-off, you may want to call ahead to make sure they will accept your merchandise.

Be sure to use proceeds from the garage sale to pay for any advertising costs, materials, or other expenses associated with having the sale. With what’s left, use it to get out of debt or add to your emergency savings. Whatever you do, don’t spend it at your neighbor’s yard sale!

Weekly Roundup: Foreclosure Squatters Edition

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One of the links below points to a post that asks the question, “Is Squatting in a Foreclosure Acceptable?” It’s rare for me to take the bank’s position on things, but in this case, I do not think squatters should be allowed to bog down a legal recourse to a default on a mortgage loan. I do like to see banks attempt to work out a payment plan before kicking someone out, but after an honest try, I think the banks should be allowed to remove the owners and collect whatever value they can from the home to offset their loss.

Instead, “squatters” should focus that same energy spent squatting on working to expand the safety net already in place for those forced out of their homes – churches, shelters, rental assistance programs, etc. Admittedly, I might feel differently if it was my family about to be tossed out on the street. Just my two cents – what are your thoughts on the subject?

The Frugal Roundup

Letter From a Thief. This letter goes out to everyone. Read it carefully. (@brip blap)

Is Squatting In a Foreclosure Acceptable? This isn’t a full article but I thought it was very interesting question. Basically, there is a group out there that helps homeless families move into foreclosed homes until they can be sold. (@My Dollar Plan)

The Cost of Negativity. I think everyone has experienced this type of individual at work. The lesson that Trent gives really hits the nail on the head. (@The Simple Dollar)

Should You Let People Know How Well You’re Doing Financially? Well, you do see more blogs about getting out of debt. The bloggers who are better off are either anonymous or do not talk about their finances. (@Finance for a Freelance Life)

Best of the Rest

How to Cook Cheap Meals

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With the way the economy is going, everyone is looking to come up with ways to save money every month. Grocery bills are no exception. The rising cost of groceries is forcing people to come up with cheap meal plans for their families. This can often times prove to be a difficult task, but there are ways of doing it, without completely sacrificing nutrition.

free grand slam breakfast from dennys by Joits on Flickr

*This was the popular free Grand Slam breakfast at Dennys, but it represents one of my favorite, cheap meals to cook at home – breakfast!

Menu Planning

Better menu planning will result in cheaper meals. If you plan out your menu for a month, or just a week, then you will avoid an expensive grocery bill by reducing the number of trips you have to make to the store to pick up supplies.

Making a shopping list for all the ingredients you will need while planning your meals will also help save money.

Once you have your grocery list completed, make sure you go through your pantry, cabinets, refrigerator, or freezer to see if you already have some of the ingredients on the list. If you do, mark them off your grocery list. This step alone will save you from buying items you don’t need when you go shopping.

Consider using alternate sources of protein, such as beans, or Portobello mushrooms, for cheap meals, or make meals that will stretch the amount of meat used for a cheap meal plan. Look for a family pack of meat.

Family packs often help lower costs when you are coming up with cheap dinner ideas. One large family pack of chicken breasts can often stretch to make up to three different dinners.

Never Shop on an Empty Stomach

Before grocery shopping the best thing you can do is eat a little something at home. Few things cause us to spend more on groceries than shopping while hungry. When I’m hungry, everything looks good, and everything winds up in my shopping cart!

Buying generic items, particularly when shopping for canned goods, can save money. Generic items and store brands are generally just as good as the name brands.

Clip coupons for the items that you need, not for the junk food that you wouldn’t normally buy.

Fruits and Veggies

Knowing what fruits and vegetables are in season will help you fill out a cheap meal plan. When produce supplies are higher, the costs are generally a little lower, so the best deals can be found on in-season fruits and vegetables.

Buying your fruits, vegetables, and meats in bulk will save money, and may just help you come up with cheap dinner ideas. You can pair up items that you may have never thought to go together and come up with a new recipe.

Buying frozen fruits and vegetables can save you money on groceries, particularly for things that are not in season, and they are often just as nutritious as their fresh counterparts.

Now for the fun part. After the planning and shopping have been done, it is important that you remember to cook at home every night instead of eating out. My wife and I often have to resist the temptation to leave the grocery store and pick up something for dinner because we’re too wiped out from shopping to cook.

How to Learn How to Cook

Picking up a cookbook, or searching for recipes on the internet, is the simplest way of learning, and it can help you to come up with cheap dinner ideas, cheap meals, or cheap meal plans. I highly recommend picking up the book, How to Cook Without a Book, which is an excellent for learning to put together healthy, inexpensive meals with ingredients you have on hand.

If you are like me, and need a little extra instruction, I’d recommend taking a cooking class hosted at local community colleges or culinary schools. Even if you don’t plan to become a chef, an introduction to cooking can provide some excellent tips to take back to your own kitchen.

*This post was included in the Festival of Frugality #233

How to Buy a Foreclosed Home

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I have always had a desire to learn how to become a real estate investor, which is a little strange, since until just recently I leased or rented homes, or shared one with a family member. Buying our first home was confusing enough as a first-time home buyer, but considering how to buy a foreclosed home as an investor seems far more challenging.

Abandoned, boarded up home by Jay Santiago on Flickr

Current trends in the housing market indicate that small investors might be wise to consider buying foreclosed property as their family home, for resale purposes, or for rental income. Savvy investors will also note that that the variety of foreclosed homes now available includes those found in affluent areas and seaside resorts, areas where home values typically see nice growth (until beaten down by housing bubbles such as the one we recently experienced.

How You Could Benefit from Buying a Foreclosed Home

While the majority of foreclosures are sold at 5% below market value, your savings may increase if you buy from a lender that is willing to lower the down payment or interest rate, or waive certain closing costs, because the mortgage is in default. Since an appraisal on the property has already been done, you might be able to avoid the appraisal fee, and much of the risk entailed will be removed if title insurance is also included in the purchase price.

If you have a good credit rating, your loan may equal the foreclosure’s full amount, and if you plan to use the home for rental income, the lender may only require a down payment of 10%. Obviously, lending requirements are different across institutions, geographic regions, etc, so investigate down payment requirements in your area.

RealtyTrac

If you have a substantial amount of equity in your current residence, you may be given a line of credit to make the purchase without even providing a down payment. Personally, I’m not crazy about the idea of using equity in my primary residence to finance the down payment, or significant percentage of the purchase price, of a second, foreclosed home.

What You Should Know

Many home owners who default on their mortgages have been in financial difficulty for about a year, and both regular maintenance and repairs that are needed in the home have probably been neglected on either a large or small scale. Since this can even happen in an affluent area and location really does count, if the resale value of the home seems promising, you might want to consider making a reasonable offer and prepare to invest in its upgrading.

In other words, keep an eye out for the ugly house in a nice neighborhood that is in need of mostly cosmetic upgrades, but is structurally sound. I don’t recommend novices get involved changing floor plans or repairing sinking foundations. If I bought a foreclosure in need of upgrading, I’d stick to new carpet, paint inside and out (if needed) and maybe a go so far as replacing the roof if it was in dire need of replacing. Beyond that, I’d leave it to someone with more time and money than me.

To locate foreclosures, I’d recommend starting your search with a  visit to RealtyTrac, the nation’s #1 site for foreclosures.

As a rule, banks try to sell their foreclosed home at an auction or work through a real-estate broker. If a property has been up for sale for less than a month, the lender will probably expect a full-price offer, but after that, they may be ready to sell at a bargain price.

A Word About Home Auctions

In the past, a foreclosed home was usually auctioned off for less than 50% of its fair market value, but today, attendance at these auctions has increased significantly. The hike in the number of bidders in attendance increases the competition, which results in a higher sales price. Consequently, foreclosures now often go for 10% to 20% less than fair market value, which makes them an interesting investment, but not the golden opportunity they were when buying foreclosures was done in more exclusive circles.

Note that if you buy a foreclosed home at below market value in a good area and it appreciates annually, this may turn out to be a wise investment strategy. The appreciation will be tax-exempt until you sell the home, and if it becomes your primary residence, it may also be tax-free. If you use the home as a rental property, it may build equity and increase in value while giving you a valuable tax deduction at the same time.

Cover All the Bases with a Home Inspection

Before completing any real estate transaction, especially a foreclosure, you should be willing to pay for a complete home inspection. This will cost between $250 and $400, but it will reveal anything that is wrong with the property’s systems or structure. Remember that you can only determine if the asking price is fair when you know what maintenance and repairs are needed. If you plan to make a direct offer to the owner, find out if there are any outstanding lines or other claims on the home.

Finally, I would recommend using a real estate attorney to help navigate the legal hurdles of buying a foreclosure. We used an attorney to buy our home, because a real estate agent was not needed, and I wanted someone representing my interests throughout the transaction.

Where to Find the Best Interest Rates on Savings

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I am not much of a “rate chaser.” However, because I lean towards a fairly conservative investment strategy (growing even more conservative thanks to recent volatility), I keep an eye on interest rates for savings account, CDs, etc. Looking for the best interest rates on savings these days does not normally yield anything worth writing home about.

Lending Club (9.65%)

If you have a slightly stronger stomach for risk, and like to have more control over exactly what your investment dollars are in, give Lending Club a try. I have a small portfolio of loans there earning about 10.90%. Read more about my experience in of my recent Lending Club reviews.

Smarty Pig Savings Account (2.15% APY)

Smarty Pig has revolutionized online savings by combining aspects of online banking and social networking. Well, that is, if you want your banking to be social (you can opt not to share info or accept contributions). One of the options you have with your Smarty Pig online savings account is the ability to receive “contributions” from your friends and family. For instance, let’s say you are heading off to school and need some help buying books. You could create a “Textbooks” goal and choose to accept contributions. Friends and family could “feed your piggy” ever so often without having to send you cash directly. It’s a great concept, and a great rate, too!

ING Direct (1.10% APY)

We still have a number of sinking funds at ING Direct. They are not earning a lot of interest, but I’ve yet to find an easier interface to navigate saving in multiple accounts, creating automatic contribution plans, etc. I guess I’m willing to sacrifice a couple tenths of a percentage points for ease of use with these designated savings accounts.

Ally Bank (1.29% APY)

Ally Bank has always intrigued me, and not just because of their cute commercials starring those kids with puzzled looks on their faces. Kiplinger’s Personal Finance magazine (my favorite money magazine) declared their online savings account the “best savings account” in their December 2009 review. I also closely follow their high-yield CD rates, no-penalty CDs, etc.

Local Money Market Accounts

In addition to these online savings accounts, don’t forget to check out your local bank or credit union. Often times, these smaller institutions will run some nice incentives, particularly if you have a good amount of money saved (like a six-month emergency fund).

Our local bank recently had a 6-month promotion on their money market account – offering 2.25% APY on balances over $2,500. The promotion was so successful, they continued it for another six months.

*Rates current as of 08/03/2010 and are subject to change