Last week, I spent $800 on wild, clothing shopping odyssey. Sounds crazy?  Not so much when you think about it in the context of the big picture. I saved $3,000 over retail prices, and the kids have clothes tucked away for the next three years!

I have three boys ages 6, 8, and 10.  My 8 and 10 year old are the exact same size. The US Dept. of Agriculture’s Center for Nutrition Policy and Promotion published a study in 2001 that gave an estimated cost of raising an infant to adulthood over 18 years.  In it, the cost for clothing over that period for the median income bracket of a two-parent family earning $64K combined is a whopping $13,770 per child.  For three kids, that’s over $40,000 during their childhood.  We’re talking $2295 per year to keep clothes and shoes on my kids’ bodies.  That doesn’t factor in any clothes that are either hand-me-down or gifts from family/friends.

So, when a good clearance sale comes on, believe me, I stockpile the clothes.  A few things I take into consideration is the growth path my kids currently seem to be on, the “hand-me down” factor – what do I think is going to make it from one kid to the next, and the classic element – is what I’m buying going to still be relatively in style a few years from now.

This time of year is a particularly good time of year to make the investment into buying kids’ clothes ahead.  It’s the collision of fall and winter clothes meshed with a hodge podge of left-over summer clearance from the previous fall that didn’t sell before.  And the clearance markdown is significant.

Normally, I don’t advocate charging stockpile items, but when sales like this come around, the math actually works out.  If I had charged my $800 purchases (I didn’t – I paid cash) – and I paid it over 8 months at even a higher interest card like 16%, the interest charges would only be about $55 for that period – nothing compared to the savings I cleaned up over the original retail pricing.

The sale last week was 70% off the last marked price.  Most of the items had already been marked down between 10-25% off.  So when you factor in the addition 70% off, the savings could be as close to 90% off full retail. In my case, the total value of the savings over retail was 78.4% off.  Even if I were to shop 2nd hand, over three years, I’d still pay more than $800 for clothes for three kids.

It’s important to note, I’ve always stockpiled clothes.  When Mervyn’s went out of business three years ago, I spent New Year’s Eve closing down the store. I spent about $800 then, and I am still pulling clothes out of the closet from that sale.  I also stockpile little bits here and there as I find things like underwear 3-pks for $2 or less, or t-shirts for .98c.
So, knowing that for three years, I’d be looking at nearly a $7000 clothing bill for my kids, here’s what I got and why I don’t believe I’ll need to buy any clothes other than a few pairs of shoes for a long time. Last week, my $800 bought me the following:

6 pairs PJ bottoms
18 size large shirts – long and short sleeve (three that came with mini skateboards!)
2 medium shirts
12 XL shirts
9 pairs of mittens
4 pairs ski gloves
1 ski hat
2 pairs size 8 (kids) pants
6 pairs size 10 pants
12 pairs size 14 pants
13 pairs size 16 pants
2 pairs size 18 pants
1 pair size 20 pants
13 pairs of assorted shorts/swim trunks
3 pairs hiking boots
2 pairs tennis shoes
1 pair soccer cleats
8 backpacks
3 pairs starter pants (for DH)
3 ski liners (for DH)
1 sweat shirt
12 fleece jackets – assorted sizes
4 light winter coats
3 heavy winter coats
1 pair of athletic pants (for me)

Combined with other stockpile sales, the only think missing to cover all three kids for the next three years is some socks (which I’ll need to buy sometime in 2011), a few pairs of intermittently sized tennis shoes, and possibly some one-off specialty athletic wear as one of the kids starts football this summer.

All the clothes are arranged by size in closets with certain closets that have the lot for everyone (like all underwear in the house is stored in one kid’s closet by size).

The thing about stockpiling clothing is that it works whether you have one child or a dozen.

Last year, I spent less than $1000 on clothes for the entire family.  That included shoes and outwear, plus a huge stockpile of winter ski gear that will keep the boys sized in ski clothes until middle school.  And while this year, I’m already at $800, It’s unlikely I’ll need more than a few pair of shoes to get through the rest of the year.  That means school clothes are already bought, at the price I was willing to pay for them.

It also means that for the next few years, my average should fall to less than a few hundred dollars for each of the next two to three years for the entire family.

The beauty of buying this way is that my cash is freed up over the long haul for other stockpile items.  Any item I buy that doesn’t work for my kids, or the occasional item that never gets worn or it doesn’t fit anyone, all those items can be passed on to my sister’s kids. Or, for the pennies I paid for the clothes, I don’t feel bad donating the items they either hate or can’t fit into.

Stockpiling clothes falls into the “low finance” category of building wealth.  The money I am not going to spend on clothes for the family for the next three years – about a $5000 over all savings, can go to lots of other things. In my case, it’s paying down debt and planning for my husband’s transition out of the military.

A mini-guide to clearance clothes buying and when to stock up for your kids:

* Pants less than $5 a pair
* Shirts long sleeved – under $5
* Shirts short sleeved – under $3
* Shorts – under $4
* Swim suits/trunks – $5
* Fleece jackets – $5-$8
* Winter coats – $10 to $18
* Ski pants – under $10
* Stretch Mittens – .30-40c per pair
* Ski Gloves – $5 or less per pair for the heavy duty type
* Winter hats – $3 or less
* Underwear – $2 or less for a 3pk for kids, $4 or less for an adult 2-3pk boxers or briefs (men), $1 or less per pair for women’s (nice ones, not the cotton Haines variety)
* Shoes – $10-$18 for name brand athletic
* Flip flops/sandels – $5 or less for name brand like Nike
* Hikers/snow boots – $10 to $15 per pair
* PJs – $4 or less for jammie bottoms, $8 or less for kids’ complete sets

Having done this now for more than 10 years, I can say with lots of certainty that the savings of stockpiling clothes is worth the time to chase the sales, sort the clothes and keep sizes organized and rotated. And yes, possibly even paying a little bit of interest on a card so that you don’t miss this kind of sale.

Important to note, everything I bought this past week was heavily branded – Nike, Adidas, Reebok, Columbia Sportswear, etc.  So not only will you save, you’ll be doing so on the branded gear your kids want.

It’s one more way to get by for less in a recession. Like any good business manager knows, you have to spend money to make money.  In this case, buying ahead this month on the steep clearance sales might cost you some money in advance, but there’s no stock market or financial tool that will pay back 80% on your money in three years time.  Buy low…and utilize your “earnings” on other things you need to keep your household wealth growing!

Tags: Clearance, clothes, Kids Clothes, low finance, low finance strategy, Saving Money, stock market, Stockpiling, wealth building strategy, winter clothes
Posted in Articles, Finance, Frugal Living, Stockpiling | 6 Comments »

The stock market has rebounded nicely from the lows a year ago that had people talking the “D” word – Depression.  While I haven’t recouped everything we lost, I can’t complain.  However, experts are predicting that returns this year won’t be near where they’d hoped, and market watchers are wondering where the next best place to invest is.

My family is still putting money in the market, but this holiday season, I’m betting my money on gift cards!  That’s right.  Gift cards.  Not the most sexy financial instrument out there, but here’s why gift cards excite me.

I treat couponing, deal hunting, and shopping just like I do buying stocks.  I do research to find the good deal, I try to buy low on everything I purchase, I pay cash, and I expect maximum returns.  The holiday season is the best time to buy stock in gift cards.  Nearly every major retailer has bonus deals. If you look at buying into those deals as you would look at making an investment, the percentage value of the bonus deals is like earning money in the market.

Let me explain.

I recently went to Claim Jumper restaurant.  They have a holiday gift card deal where if you spend $100.00 in giftcards, you’re given $20.00 in bonus gift cards.  Plus, they threw in a free mug of candy, but we won’t count that.  We were going to eat at Claim Jumper anyway.  So, I bought the $100.00 in gift cards while we were waiting to be seated.  Then we spent $60 of the gift card on dinner.  But, I pocketed a 20% gain.  Not bad for a night out with the kids.  For no real effort, I made $20 doing something I was going to do anyway.

At Safeway, they are promoting $20.00 off on your next grocery trip when you buy $200.00 in gift cards.  Safeway is a veritable gift card mecca.  They have cards for nearly every major store and restaurant you can imagine.  The offer is good for two days starting Black Friday.  So, if I were to go to Safeway first before Black Friday shopping started, bought $200.00 in gift cards for stores I want to shop on Black Friday anyway, then I’d make 10% for the minuscule effort of running in to get gift cards, and running back out to freeze my butt off in line at Target.

It’s not just grocery and restaurants that offer deals like this at the holidays. Major retailers do too.  And, with tax season right around the corner, all those “cash your tax returns for bonus gift card deals” can help save you even more.  In fact, gift card deals that start in October and end in the early spring can really add up.  Last year, I pocketed close to $1000.00 in “free” money just by converting my cash to gift cards.

Now, a few things to think about.  Gift cards are great, but if the store you’re buying them has any chance of folding, then being stuck with gift card balances you can’t use will eat into your profits.  Be sure to stick to big name retailers and restaurant chains when you’re investing in gift cards.

Second, the bonus gift cards usually have restrictions like dates and redemption limits.  So, be sure to use the bonus cards up first if they have specific-use guidelines.  Then, use the actual gift cards if you haven’t already used them at the time you purchased them. Bonus gift cards can also sometime have restrictions about using them with other offers, so watch to be sure you can use them with coupons and other deals.

Lastly, giftcards as an investment isn’t just limited to buying a full-value gift card and getting a bonus card.  Buying giftcards at a discounted rate for the full value is also an investment.  Costco sells $100.00 worth of McCormick and Schmick’s (M&S) gift cards for $79.99.  So in effect, just walking into Costco and buying up $100.00 of gift cards for $79.99 gives me a 20% return on investment the moment I swipe my debit card.  And unlike bonus cards, the discounted gift cards like the ones at Costco come with no restrictions. I can use my M&S rewards card, coupons, and other offers to make this deal even sweeter.

Another investment strategy with gift cards is getting them to buy actual items you would have bought already.  At Blockbuster video, they were giving a $5.00 gift card to buy an Entertainment Book.  Buying the book, then using the Blockbuster coupons in the book in conjunction with the $5.00 gift card to pay for that visit’s movie rentals could effectively save you up to half the purchase price of the book.

When you think about utilizing gift cards in this manner, it’s easy to see how the returns you get from being a smart gift card buyer can add up faster than dividends from money invested in the stock market.

And, in most states, there are gift card laws that protect consumers.  Many states have done away with fees for non-use, expiration dates, and other legalities that made gift cards not near as user friendly.

So, this year, I am once again investing my cash in gift cards.  Year after year, I make more as a percentage on investing in gift cards than I do giving my money to the guys on Wall Street.  And that’s money you can bank on!

Tags: entertainment books, gift cards, Investing, stock market
Posted in Articles, Finance, Frugal Living, Holiday's & Gifts | 3 Comments »