7 Money Lessons I Learned From Thrift-Shopping

By Kentin Waits on 13 April 2016 1 comment

I've been an avid thrift-shopper for the past three decades. Beyond a simple hobby, I have to admit thrift-shopping is a bit of an obsession for me — it channels my inner treasure hunter and provides an endless source of entertainment. (I'm a cheap date.) And besides saving me thousands of dollars over the years, it's also helped me learn a few important financial principles, too. Here are seven money lessons I've learned from thrift-shopping.

1. Retail Markups Can Be Massive

Retail markup on common items is so steep it should make most store managers blush. Between wholesale and retail, eyeglasses can be marked up by as much as 1000%, jeans 350%, and furniture 400%. While I don't begrudge anyone turning a healthy profit, I don't want to be the one to pay it. Thrift-shopping helps maximize my budget by minimizing my exposure to excessive markups.

2. Depreciation Is a Powerful Force

Depreciation is the reduction in value an item experiences over time, usually due to wear and tear. But depreciation can happen without any wear at all. Drive that brand-new car off the lot and it's immediately transformed into a used car that's worth about 25% less. At a certain point, the downward force of depreciation becomes so significant that those of us who buy second-hand are getting great items at or below the manufacturer's cost of production.

3. Retail Discounts Aren't So Great

Considering retail markup can be a few hundred percent on some items, even the most generous discounts seem cheap by comparison. Why do we get such a charge out of saving 15% percent on an item selling 400% above wholesale? When we purchase a new item in a department store, we're not just covering excessive retail markup; we're also shouldering the biggest depreciation event — taking an item from coveted new status to scorned used status. Those of us who buy second-hand are side-stepping each of these forces and saving money in the process.

4. Value Is Arbitrary

Once we understand how retail mark-ups and depreciation work, it easier to grasp one essential truth: Value is an arbitrary thing. It's profoundly influenced by the retail industry, the marketing companies they employ, and our own tendency to favor new stuff over used stuff. Forget what you've been taught. Broaden your perception of value and save loads of cash.

5. Simplicity Saves Money

We live in a nation of excess and few places showcase that excess more clearly than thrift stores. Items are cast off as styles change, as technology changes, and as trends fade away. The next time you're in a second-hand store, consider the amount of cash all that inventory cost when new. It's a constant reminder to keep things simple, gravitate toward quality and classic styles, and avoid falling victim to expensive trends.

6. Planning Matters

Thrift-shopping is a game of chance and timing. To make of the most of it, you have to know what you need today and what you'll probably need six months from now. Once you're looking through a wider scope, you can spot bargains, seize deals, and avoid those last-minute — and expensive — buys at the department store.

7. There Are Business Opportunities Everywhere

Fact: People love to buy stuff, but not everyone has the time to hunt for what they want or the talent to spot a gem in a pile of junk. Enter the thrift-shoppers, the auction-goers, and the diehard flea market fans. Well before the Internet made selling a snap, I was flipping thrift-store finds to antique dealers and interior designers in Chicago. It turned something I loved to do anyway into a profitable business and helped me think more creatively and independently about income. (See also: 5 Things You Can Resell on eBay That Make the Most Money)

So, the next time you find yourself near a thrift store with the kids in tow, stop and take 30 minutes to browse around. It's not only a hotspot for bargains; it's the perfect place to learn about saving (and making) money.

Are you a thrift-shopper? How has it changed how you think about money?

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Guest's picture
Olivia

Avid? Sure thing. When the boys were small it's how we kept them clothed. I can't imagine paying retail. Most of my better stuff is from the thrifts. They last and look good forever. It's our go to place for DH's imported silk ties and dress shirts.

One example. Our eldest needed fancy duds for his high school graduation. While his classmates did the rental thing, we did it discount. Thrift store tux $5.50. "Retired" shirt from a tux rental place, $15. Silver gray cumberbund and tie, online for about $16. A whole lost of spiff for under $40. Plus he wore the outfit on other occasions.

Guest's picture
Sharon

The only place we pay retail is Dollar Tree! Have created seasonal wardrobes and furnished a lovely home second-hand. For example: Negotiated with local 'junk' emporium and got ornate white-enameled queen bed frame w/rails, new boxspring, delivery and set-up for $175. Paired with our existing mattress, it is perfection. Also enjoy wearing my cream cashmere Ralph Lauren blazer on cooler days - a true find from our local hospital thrift store for $2.50 + $7 dry cleaning. You're so right...this is inexpensive psychotherapy. One can indulge one's inner shopaholic (same endorphin rush) and keep most of the cash in your wallet:) Have tried desperately to impart this wisdom to my best friend, who is heavily in debt from indulging all her high-end cravings, but to no avail. Sadly, she's all about labels...oh, well - it's her loss.