Monday, October 19, 2015

Why Online Consignment Isn't Worth It (Usually)

I wrote a post several months ago about online consignment. After months of experimentation, the verdict is in -- it's definitely not worth your time. (Specifically, it's not worth your time as a source of regular income. If you have clothes laying around already, go ahead and give it a shot.)

The biggest issue that I've noticed is how specific the market is. If you don't have the capital to invest in high-end designer clothing and accessories, you don't seem to make much. Over the course of months, I only managed to sell some comfy worn-out clothes to a few grandmothers for $1-2 per item, and one dress for about a third of retail (after Poshmark took their cut, it was more like a fourth).

Another issue is the fact that people just don't expect to pay a fair price to an individual. Unless your entire inventory fell off the back of a truck, you're likely going to take a loss.

At the end of several months of trialing different platforms, I spent over $60 on inventory and made less than $40 back. Of that $40, most of what I sold was clothing that I already had -- the majority of my inventory has been given away or packed in storage at this point.

If you have the capital and access to get designer clothing at deep discounts, you may have better success than I did. I definitely saw some items sell for pretty large amounts, but the capital needed to acquire that kind of inventory is more than a little intimidating.

All in all, it seems that you'd be better off looking for a different avenue of income if you were looking for a lucrative side hustle.

Saturday, October 17, 2015

Learning to Manage Money All Over Again (When You Suddenly Have More)

Have you ever gotten a raise or finally paid off a debt, felt a wave of relief, but then suddenly all that extra money is just... gone?

I can relate. It's actually a pretty common phenomenon, especially when you've been living in fear for a long time because things are so tight. I'm definitely not perfect, and when we recently had our financial situation change for the better, the first thing I did was order a pizza after living on potatoes, beans, and rice for eight months.

It isn't necessarily a bad thing to enjoy your extra money, but you still want to maintain control of your finances and not spend it all in one place. I don't advocate for living like you didn't get a raise and saving everything or throwing it all at debts (although I've seen this advice a lot). The reason is because I know that I personally feel a lot better about my finances when I have the option to splurge occasionally. The key is to find a good balance between fiscal responsibility and quality of life. Below are a few ways to do that.

  • Make a whole new budget. (You do have a budget, right? Those are important.) You can work it off of your old budget, but you need to make an entirely new one instead of doing the easy thing and adding all of your extra money in one or two categories. Take a look at how much you have, how much your obligations are, and where money has felt tight lately. If you find yourself running low on gas at the end of the month, it's probably a good idea to allocate at least enough for a tank or two. Is your emergency savings lower than you'd like it to be? Designate a specific dollar amount to beefing it up. Do you still have credit card bills or a car payment? Consider putting a reasonable amount towards paying those down more quickly -- once those obligations are gone, it's almost like you're giving yourself a raise.
  • Plan for your impulse purchases instead of letting them blindside you. One of the biggest mistakes you can make with your money is assuming that you will not slip. You will, okay? And that's totally normal and fine. The best way to make sure it doesn't eat up all of the new money coming in is to designate a certain amount for impulse purchases and splurges -- by budgeting for them, you will almost definitely spend less on them in the long run.
  • Look for ways to make the money work for you. If you have, say, an extra $300 a month coming in, and you have a $500 credit card balance, consider allocating a large portion of your extra money for a short time period instead of a smaller amount for a long time period. On top of your minimum payment, you could pay that credit card off easily in two months; you would then have the extra balance as well as your minimum payment in your pocket rather than carrying the stress of that debt for even longer. You may also consider starting to save for retirement so that you can accrue more interest now rather than less later. This option has fewer immediate benefits, but in the long term will make your financial situation much better.
  • Find one thing you haven't been able to afford to do for yourself that you really want. Commit to doing it at least monthly. For me, that would be dyeing my hair. For my husband, it's buying books. Think of something that brings you joy that you haven't been able to manage, amd make sure you start doing it. It doesn't have to be expensive, but make it something that you longed to do before but couldn't justify. I've found that this brings me a lot of satisfaction and curbs my impulse spending tremendously.
The question of whether to enjoy your money or use it responsibly can be a hard decision, but it doesn't have to be. Whether you've got an extra $50 in your pocket or an extra $5000, you can find the happy medium between doing the boring but important thing with it and doing what makes you happy right then and there.