Sometimes it is the couch cushions. Sometimes it is the cup holders of your car. And sometimes it is your closet.
Here is a brief summary of how I was able to make $250 from my closet in under two hours.
How To Make Money From Your Closet
I get it. If you are going to make money from your closet, you should probably organize it too. Here are my 6 Steps to A Functional Closet and Why Organizing Your Closet is So DAMN Hard to help you out.
1. Clean out all pockets of coats, blazers, and vests.
We’ve all done it. Throw a $10 bill and lip gloss in a coat pocket for a quick run to the store. And now the change from that $10 bill is still in your coat pocket three months later.
Go through and check all the pockets of your winter/fall/spring coats, blazers or vests. At the same time, take out any lip glosses, tissues, candy wrappers, etc. and put them in the right place.
Time: 15 minutes
2. Clean out your “other” purses.
Here is another place where money likes to hide…in our “other” purses. I’m notorious for leaving five or ten dollars in a clutch I used for a Girls Night Out. Take a few minutes and go through each of your purses and pick out any lose change or random bills.
Time: 15 minutes
3. Find all unredeemed gift cards in your wallet or “other” places in your house.
We all have gift cards in our house (wallet, envelope on the fridge, in a basket) that we received as a gift, reward or promotion. And then they sit, unused, like wasted money.
Get on the computer and check the balance of each unredeemed gift cards. (Instructions are usually on the back of the cards.) Write the balance on the card with a sharpie marker. Then make the following decision:
- If your gift card is VISA, American Express, or MasterCard, make the commitment to use it immediately or load the amount to your Amazon account. (Because we all shop at Amazon.)
- If you have a specific store or restaurant gift card and it is a business you like, make the commitment to use it in the next 30 days.
- If you have a specific store or restaurant gift card and it is for a business you don’t like, sell it.
There are several places on online where you can sell your unredeemed gift cards for up 95% of the retail value. So while you may “lose” a little money, you will receive “hard cash” that you can use for something else.
Here are just a few online gift card companies that I trust:
Time: 30 minutes
4. Sell Your Clothes.
Like I mentioned in 6 Steps to A Functional Closet, we only wear 30% of our clothes. So why not sell part of that 70% and make a few dollars?
Consignment stores buy gently used in-style clothing for an average of 10 – 25% of the retail value, depending on the age, condition, and style of the item.
There are two types of consignment stores: local and online.
Local Consignment Stores
- You will know instantly if you will be receiving money for your clothes or not. There is no delay in payment.
- May accept clothing that will be declined online. For example, a local store may be known for having an awesome business attire selection and will accept your dress suits, while the online company will not.
- Have to drive to multiple locations to sell your stuff.
- Local stores pay less than online consignment because local stores have more overhead.
Online Consignment Stores
- Sell a bunch of clothes at once. This is awesome if you have an eclectic group of clothing (a few jeans, a dress shirt, a couple sweaters and a formal dress).
- Each site will outline what brands they are more apt to accept. Make sure to review those standards.
- Pay more than local consignment stores.
- Can take over a month to get paid. It takes a week to receive the “selling bag” for your clothes. The review process can take up to a month and then it usually takes five business days to receive payment.
I decided to use ThredUp because I had a great experience buying from them in the past. Plus, it seemed they had similar tastes in clothes (meaning more of my clothes would get accepted).
- Receive a FREE selling kit.
- Referral Program: Friends receive a FREE $10 credit when they sign up and you receive $10 for every friend that signs up.
- $12.95 to have items sent back to you if they aren’t kept (or you can have them donated).
- ThredUp pre-pays 80% of the retail value of clothes they decide to keep and sell.
- Mix of higher-end and department store brands.
I sent in 10 items and chose to pay $12.95 to get back any clothes/handbags they decided not sell because because I knew I could sell them during my summer garage sale. And low-and-behold, three of my items came back to me, including a Coach purse and 7 for Mankind jeans. Both will sell easily at a garage sale.
Time: 15 minutes
Unfortunately, you can’t sell all of your clothes. But luckily, you can still make a little money for the clothes you donate, through a tax deduction.
While you can’t deduct the full retail amount of your clothing purchase, you can deduct a “fair market value” which is usually 25% of the retail price. Also, you have to “donate” your items to a qualified organization – which is basically tax exempt status from the IRS.
Plus, you’ll also need to do some documentation, including:
- The number of items and the condition they’re in.
- The dates you received or bought the items — if you don’t know exact dates, use approximate dates.
- The original purchase prices.
- A quick snapshot or video of the items you’re donating — this will substantiate your contribution if questions ever arise. Keep the visual record with your tax records.
- Signed and dated receipts from the organization receiving your donations — when Goodwill asks you, “Do you want a receipt?” say “yes.”
Still a little unsure? Here is a great breakdown on How Old Stuff Can Save You Big Tax Dollars.
Does this step take a little bit of time? Sure. But, if you have a smart phone and the Evernote app, you should be able to get it done in under 30 minutes. I was able to donate two garbage bags full of clothes and was able to get a tax deduction worth…
Time: 30 minutes
So there you go! In under two hours, I was able to make money from my closet. Like $250 worth!! That’s over $125 per hour. Now, I wonder what other areas of my house have hidden cash just waiting to be found. Any ideas?