What Is a Bond Mutual Fund – Risks & Different Types of This Investment

Investing is an important part of saving for the future, but many people are wary of putting their money into the stock market. Stocks can be volatile, with prices that change every day. If you can’t handle the volatility and risk of stocks or want to diversify your portfolio into a less risky investment, bonds are a good way to do so.

As with many types of investments, you can invest in bonds through a mutual fund, which gives you easy diversification and professional portfolio management — for a fee.

Are bond mutual funds a good addition to your portfolio? Here are the basics of these investment vehicles.

What Is a Bond?

A bond is a type of debt security. When organizations such as national and local governments, government agencies, or companies want to borrow money, one of the ways they can get the loan they need is by issuing a bond.

Investors purchase bonds from the organizations issuing them. Typically, bonds come with an interest rate and a maturity. For example, a company might sell bonds with an interest rate of 5% and a maturity of 20 years.

The investor would pay the company $1,000 for a $1,000 bond. Each year, that investor receives an interest payment of $50 (5% of $1,000). After 20 years, the investor receives a final interest payment plus the $1,000 they paid to buy the bond.


What Is a Mutual Fund?

A mutual fund is a way for investors to invest in a diverse portfolio while only having to purchase a single security.

Mutual funds pool money from many investors and use that money to buy bonds, stocks, and other securities. Each investor in the fund effectively owns a portion of the fund’s portfolio, so an investor can buy shares in one mutual fund to get exposure to hundreds of stocks or bonds.

This makes it easy for investors to diversify their portfolios.

Mutual fund managers make sure the fund’s portfolio follows their stated strategy and work towards the fund’s stated goal. Mutual funds charge a fee, called an expense ratio, for their services, which is important for investors to keep in mind when comparing funds.

Pro tip: Most mutual funds can be purchased through the individual fund family or through an online broker like Robinhood or Public.


Types of Bond Mutual Funds

There are many types of bond mutual funds that people can invest in.

1. Government

Government bond funds invest most of their money into bonds issued by different governments. Most American government bond funds invest primarily in bonds issued by the U.S. Treasury.

U.S. government debt is seen as some of the safest debt available. There is very little chance that the United States will default on its payments. That security can be appealing for investors, but also translates to lower interest rates than other bonds.

2. Corporate

Corporate bond funds invest most of their assets into bonds issued by companies.

Just like individuals, businesses receive credit ratings that affect how much interest they have to pay to lenders — in this case, investors looking to buy their bonds. Most corporate bond funds buy “investment-grade” bonds, which include the highest-rated bonds from the most creditworthy companies.

The lower a bond’s credit rating, the higher the interest rate it will pay. However, lower credit ratings also translate to a higher risk of default, so corporate bond funds will hold a mixture of bonds from a variety of companies to help diversify their risks.

3. Municipal

Municipal bonds are bonds issued by state and local governments, as well as government agencies.

Like businesses, different municipalities can have different credit ratings, which impacts the interest they must pay to sell their bonds. Municipal bond funds own a mixture of different bonds to help reduce the risk of any one issuer defaulting on its payments.

One unique perk of municipal bonds is that some or all of the interest that investors earn can be tax-free. The tax treatment of the returns depends on the precise holdings of the fund and where the investor lives.

Some mutual fund companies design special municipal bond funds for different states, giving investors from those states an option that provides completely tax-free yields.

The tax advantages municipal bond funds offer can make their effective yields higher than other bond funds that don’t offer tax-free yields. For example, someone in the 24% tax bracket would need to earn just under 4% on a taxable bond fund to get the equivalent return of a tax-free municipal bond fund offering 3%.

4. High-Yield

High-yield bond funds invest in bonds that offer higher interest rates than other bonds, like municipal bonds and government bonds.

Typically, this means buying bonds from issuers with lower credit ratings than investment-grade bonds. These bonds are sometimes called junk bonds. Their name comes from the fact that they are significantly riskier than other types of bonds, so there’s a higher chance that the issuer defaults and stops making interest payments.

Bond mutual funds diversify by buying bonds from hundreds of different issuers, which can help reduce this risk, but there’s still a good chance that some of the bonds in the fund’s portfolio will go into default, which can drag down the fund’s performance.

5. International

Foreign governments and companies need to borrow money just like American companies and governments. There’s nothing stopping Americans from investing in foreign bonds, so there are some mutual funds that focus on buying international bonds.

Each country and company has a credit rating that impacts the interest rate it has to pay. Many stable governments are seen as highly safe, much like the United States, but smaller or less economically developed nations sometimes have lower credit ratings, leading them to pay higher interest rates.

Another factor to keep in mind with international bonds is the currency they’re denominated in.

With American bonds, you buy the bond in dollars and get interest payments in dollars. If you buy a British bond, you might have to convert your dollars to pounds to buy the bond and receive your interest payments in pounds. This adds some currency risk to the equation, which can make investing in international bond funds more complex.

6. Mixed

Some bond mutual funds don’t specialize in any single type of bond. Instead, they hold a variety of bonds, foreign and domestic, government and corporate. This lets the fund managers focus on buying high-quality bonds with solid yields instead of restricting themselves to a specific class of bonds.


Why Invest in Bond Mutual Funds?

There are a few reasons for investors to consider investing in bond mutual funds.

Reduce Portfolio Risk and Volatility

One advantage of investing in bonds is that they tend to be much less risky and volatile than stocks.

Investing in stocks or mutual funds that hold stocks is an effective way to grow your investment portfolio. The S&P 500, for example, has averaged returns of almost 10% per year over the past century. However, in some years, the index has moved almost 40% upward or downward.

Over the long term, it’s easier to handle the volatility of stocks, but some people don’t have long-term investing goals. For example, people in retirement are more concerned with producing income and maintaining their spending power.

Putting some of your portfolio into bonds can reduce the impact of volatile stocks on your portfolio. This can be good for more risk-averse investors or those who have shorter time horizons for their investments.

There are some mutual funds, called target-date mutual funds, that hold a mix of stocks and bonds and increase their bond holdings over time, reducing risk as the target date nears.

Income

Bonds make regular interest payments to their holders and the majority of bond funds use some of the money they receive to make payments to their investors. This makes bond mutual funds popular among investors who want to make their investment portfolio a source of passive income.

You can look at different bond mutual funds and their annual yields to get an idea of how much income they’ll provide each year. For example, if a mutual fund offers a yield of 2.5%, investors can expect to receive $250 each year for every $10,000 they invest in the fund.

Pro tip: Have you considered hiring a financial advisor but don’t want to pay the high fees? Enter Vanguard Personal Advisor Services. When you sign up you’ll work closely with an advisor to create a custom investment plan that can help you meet your financial goals. Read our Vanguard Personal Advisor Services review.


Risks of Bond Funds

Before investing in bonds or bond mutual funds, you should consider the risks of investing in bonds.

Interest Rate Risk

One of the primary risks of fixed-income investing — whether you’re investing in bonds or bond funds — is interest rate risk.

Investors can buy and sell most bonds on the open market in addition to buying newly issued bonds directly from the issuing company or government. The market value of a bond will change with market interest rates.

In general, if market rates rise, the value of existing bonds falls. Conversely, if market rates fall, the value of existing bonds rises.

To understand why this happens, consider this example. Say you purchased a BBB-rated corporate bond with an interest rate of 2% for $1,000. Since you bought the bond, market rates have increased, so now BBB-rated companies now have to pay 3% to convince investors to buy their bonds.

If someone can buy a new $1,000 bond paying 3% interest, why would they pay you the same amount for your $1,000 bond paying 2% interest? If you want to sell your bond, you’ll have to sell it at a discount because investors can get a better deal on newly issued bonds.

Of course, the opposite is true if interest rates fall. In the above example, if market rates fell to 1%, you could command a premium for your bond paying 2% because investors can’t find new bonds of the same quality that pay that much anymore.

Interest rate risk applies to bond funds just as it applies to individual bonds. As rates rise, the share price of the fund tends to fall and vice versa.

Generally, the longer the bond’s maturity, the greater the effect a change in market interest rates will have on the bond’s value. Short-term bonds have much less interest rate risk than long-term bonds. Bond funds usually list the average time to maturity of bonds in their portfolio, which can help you assess a fund’s interest rate risk.

Credit Risk

Bonds are debt securities, meaning they’re reliant on the bond issuer being able to pay its debts.

Just like people, companies and governments can go bankrupt or default on their loan payments. If this happens, the people who own those bonds won’t get the money they lent back.

Bond mutual funds hold thousands of bonds, but if one of the issuers defaults, some of the fund’s bonds become worthless, reducing the value of the investors’ shares in the fund.

Bonds issued by organizations with higher credit ratings are generally less risky than those with poor credit ratings. For example, most people would consider U.S. government bonds to have a very low credit risk. A junk bond fund would have much more credit risk.

Foreign Exchange Risk

If you’re buying shares in a bond fund that invests in foreign bonds, you should consider foreign exchange risk.

Currencies constantly fluctuate in value. Over the past five years, $1 could buy anywhere between 0.80 and 0.96 euros.

To maximize returns, investors want to buy foreign bonds when the dollar is strong and receive interest payments and return of principal when the dollar is weak.

However, it’s incredibly hard to predict how currencies’ values will change over time, so investors in foreign bonds should consider how changing currency values will affect their returns.

Some bond funds use different strategies to hedge against this risk, using tools like currency futures or buying dollar-denominated bonds from foreign entities.

Fees

Mutual funds charge fees, which they commonly express as an expense ratio.

A fund’s expense ratio is the percentage of your invested assets that you pay each year. For example, someone who invests $10,000 in a mutual fund with a 1% expense ratio will pay $100 in fees each year.

Expense ratio fees are included when calculating the fund’s share price each day, so you don’t have to worry about having cash on hand to pay the fee. The fees are taken directly out of the fund’s share price, almost imperceptibly. Still, it’s important to understand the impact fees have on your overall returns.

If you invest $10,000 in a fund that produces an annual return of 5% and has a 0.25% expense ratio, after 20 years you’ll have $25,297.68. If that same fund had an expense ratio of 0.50%, you’d finish the 20 years with $24,117.14 instead.

In this example, a difference of 0.25% in fees would cost you more than $1,000.

If you find two bond funds with similar holdings and strategies, the one with the lower fees tends to be the better choice.


Final Word

Bond mutual funds are a popular way for investors to get exposure to bonds in their portfolios. Just as there are many different types of stocks, there are many types of bonds, each with advantages and disadvantages.

If you don’t want to pick and choose bonds to invest in, bond funds offer instant diversification and professional management. If you want an even more hands-off investing experience, working with a financial advisor or robo-advisor that handles your entire portfolio may be worth considering.

Source: moneycrashers.com

Freelance Invoice Templates – What to Include & How to Draft

Freelancing is a great option if you want the freedom of choosing the work you do and the flexibility of dictating your own availability. But, like everything else, freelancing comes with a learning curve for most.

Being highly skilled in your given area of expertise doesn’t necessarily equate to knowing your way around the financial aspects of working for yourself.

A good place to start is with professional invoicing. Properly billing your clients will help you to get paid on time and via your preferred payment method. It also helps to document your income and track payments from individual clients, keeping you organized and on top of your financial freelance game.

What to Include in Your Freelance Invoices

Although every professional freelancer will need to include different details in their invoices, there are a number of standard basics you should have.

1. Contact Information

Contact information for both you and your client is essential for any invoice. At the very least, be sure to have:

  • Your client’s business name and address
  • Your name, company name, address, phone number, and website

Including contact information in your invoices serves a few purposes:

  • It helps to organize your information by client
  • It gives the client a number of ways to contact you with questions or concerns
  • It helps to distinguish the tax amount you should charge based on your client’s location

2. Invoice Number

Each invoice you send to a client should have a unique invoice number. Regardless of how you choose to number your invoices, each one should be customized every time you send an invoice to a client, whether it’s for the first time or you bill them regularly.

For example, you can order invoices in a variety of ways, including:

  • Basic sequential invoice numbers, starting at 001 for your first invoice, 002 for your second, and so on
  • Using years or months with an individual invoice number (2022-001 or 2022-01-001)
  • Mixing letters and numbers to indicate a specific client associated with an invoice number (like GS-001 for Greg Smith’s first invoice)

Invoice numbers allow you to track payments for specific billing periods, helping you to keep track of which invoices have been paid and which clients need a gentle reminder.

Don’t spend too much time worrying about how to organize your invoice numbers. If you only send out a few invoices per month, keep it simple and straightforward. You can always change or update your numbering system when you get a new client or come up with a better method.

3. Payment Information

The purpose of your invoice is to get paid, so it makes sense that you would include payment information on it. But there are some details that may not have crossed your mind that help you to get paid on time and using the method you prefer.

Include the following information to get paid when and how you want to:

  • The date you send the invoice
  • When payment is due
  • How the client can make a payment
  • Any additional payment information, like who to make payment out to or what email address to use

It doesn’t have to be complicated. You can write a message as simple as, “Please make payment via PayPal to free@lance.com within 14 days.”

As long as you include the sent date and the payment terms, it will be easy for the client to determine by when they must pay your invoice. And adding in your payment details means you’re more likely to receive payment via the method you prefer and to the account associated with your business.

Plus, by not including a specific payment due date, you won’t have to update it each time you send a new invoice.

4. Service Description and Cost

The biggest and most detailed part of most invoices is the section where you describe the services you rendered and their associated costs. How you detail this information will vary greatly depending on what you offer and how you bill your clients.

Most invoices will include a column for:

  • Quantity of items, like how many articles you wrote or webpages you created
  • A description of the items, like a blog title or client phone call
  • How the price is calculated, if applicable, such as the cost per hour or per unit
  • The total price for each individual line item

For example, a line item for a blogger could look something like this:

Number of Hours Description Hourly Rate Total
5 Article (10 Best Hiking Spots) $25.00 $125.00

Individual line items should clearly indicate what a client is being charged for, how much your rate is, and the total amount for the project. Breaking information down into sections keeps both you and the client organized and on the same page.

If you have multiple rates with a single client, break your invoices into sections by including a table like the one above for each separate pricing structure.

For example, your rate might be different for writing versus editing. If you provided both services to a client in the same billing cycle, break out your writing charges from your editing charges as separate line items on the invoice.

5. Additional Charges or Discounts

Before you calculate the total amount due, account for any additional charges or discounts that apply to your client’s bill, such as:

  • Taxes
  • Costs for subscriptions, materials, or supplies the client has agreed to pay for
  • Deposits
  • Promotions
  • Outstanding amounts owed from previous bills
  • Travel costs being reimbursed by the client
  • Charges for work that you subcontracted to another freelancer

Describe these billable amounts and their corresponding costs in the same way you document your services. Group any additional costs together so that your invoice is easy to read and understand.

6. Total Amount Due

At the end of your line items, include the total amount due. This amount is made up of your service costs, additional charges, discounts, and any applicable taxes or fees. It’s the total amount due for your billing cycle that you are asking the client to pay.

If you have clients in other countries, designate the currency the invoice is in as well — for example, CA$2000 or US$400. If a client pays you in a foreign currency, make a note of how much you received in your native currency to keep your accounting records up-to-date and accurate.

7. Payment Terms

One of the last items on your invoice will be your payment terms if you have any. These are typically made up of payment-based clauses outlined in your initial contract with a client, such as:

  • Interest charges or late fees for past-due payments
  • Accepted payment options, such as debit or credit card, e-transfer, or check
  • Typical invoice due dates
  • Whether you offer discounts for early payment

This section of your invoice shouldn’t be long. It should simply reiterate the payment terms that were in your original contract without going into specific details or legal jargon.

Including a brief reminder of your payment terms in each invoice ensures your clients are consistently aware of your expectations for timely payments and the consequences of partial or late payments.

Not only does this information act as a reference point should any payment disputes arise, but it also encourages your clients to pay you on time and in full.

8. Optional Invoice Upgrades

After you put together the basic elements of your invoice as described above, you can make some small upgrades to your invoice template to boost your professionalism and to improve whatever invoicing system you use.

For example, you could:

Use a Logo and Branded Colors

If you have a logo for your freelance business, your invoice is a great place to showcase it. The same goes for any brand colors you use on your website or in any of your other professional documents, like your contract or quotes.

Well-designed freelance records set you apart from other contractors who use generic, basic templates by highlighting your professionalism and legitimacy as a serious business owner.

Create and Send Digital Copies

Online invoicing is the way to go if you’re a freelancer. Not only are digital invoices easier to send and harder to lose than their paper counterparts, but they also make keeping track of your records a breeze.

Ideally, you’ll want to save a PDF version of each invoice you create to send to your clients and to save on your computer or cloud storage.

If you have a client who requests physical invoices, it’s still a good idea to make a digital copy for yourself. Doing so will help you to avoid the hassle of losing or misplacing your only copy and having to start over again.

Add a Thank-You Message

A simple thank-you message at the bottom of your invoice is a great way to add a little warmth to your freelance business. It shows clients that you appreciate them and softens your request for payment by adding a personal note of appreciation.

For example, you can say:

  • Thank you for your business!
  • Thank you for supporting freelancers!
  • Thanks for supporting local businesses!

If you send physical invoices, consider writing out or signing the message by hand for added personalization.


How to Make a Freelance Invoice Template

You have a variety of options when it comes to making your own invoices. You can use invoicing software, or you can do it yourself.

Most accounting software comes with invoicing tools, so if you already use a platform to track or accept payments, check whether you can use it to make invoices as well.

If you want to use an invoice generator, you can find free invoice templates on the following platforms:

Or, you can draft your own using a freelancer invoice template from:

Regardless of which method you use, save time by keeping your invoices consistent and using the same template each time. Customize each invoice for each billing cycle to include the correct line items, amount due, and payment due date.


Why Freelancers Should Use Professional Invoices

There are many benefits to using professional invoices as a freelancer.

1. They Help You to Get Paid on Time

One of the major hassles of being a freelancer is having to chase after payments. When clients pay on time and in full, it means that you can cover your bills and budget accordingly. But, when they don’t, you could be left scrambling to cover your expenses and make ends meet.

Providing clients with clear and straightforward information about the total amount due, when to pay it, and accepted payment methods leaves little room for error or miscommunication. Sending accurate and thorough invoices builds your reputation as a professional and legitimate small-business owner.

2. They’re Great Accounting Records

Invoices are ideal records for a variety of accounting purposes. For example, they come in handy:

  • When tracking client payments or unpaid invoices
  • During tax season to calculate your total income
  • If disputes arise and legal action is necessary
  • For budgeting, to know how much you can expect within a billing cycle

3. They Give You Control Over Payments

As a freelancer, some payment methods are more convenient than others. For example, cash and checks can be less than ideal because you either have to wait for the mail to come or set up an in-person meeting with a client to receive these forms of payment.

Invoices help to set and enforce payment terms, like the payment methods you accept and when you need to be paid by, making your freelance life easier. Although you may need to make exceptions for some clients, consistent payment terms outlined in your invoices leave less room for interpretation.


Final Word

There really is no downside to using invoices as a freelancer. From making you look more reputable and professional to increasing your chances of getting paid in full and on time, invoices come with an abundance of benefits.

Whether you use accounting software like FreshBooks, or you create your own templates, make sure your freelance invoices are clear, consistent, and customized for each client to maximize the advantages great invoicing can offer you.

Source: moneycrashers.com

How to Have a Successful Garage Sale – Ultimate Guide

It’s easier than ever to turn unwanted clutter into cold cash. Reliable standbys like Craigslist sales and eBay auctions are now joined by local marketplaces like Nextdoor, social platforms like Facebook Marketplace, and category-specific marketplaces like Sellcell (for electronics) and Kidizen (for baby clothes and kids’ accessories).

Yet some things never change. When you need to sell lots of individual items quickly, your best move is a decidedly nondigital one: to throw an old-school garage sale. Call it a “yard sale” or “tag sale” if you prefer, but the meaning is clear: an “everything must go” liquidation of the stuff you’ve accumulated over the years, advertised locally and held on or near your property.

Throwing a garage sale is no easy feat. If you don’t plan and execute the event properly, there’s a very real chance it will pass more or less unnoticed, leaving you with a bit less cash, a lot less self-respect, and a mountain of unsold inventory to unload.

On the bright side, planning and pulling off a profitable garage sale doesn’t require a marketing degree or MBA. You’ll earn more and stress less when you follow this straightforward four-step process for garage sale success.

Step 1: Plan Your Sale

Begin planning your garage sale weeks, if not months, before you greet your first customer.

1. Pick a Date

First, you need to choose a time and date for your garage sale. Consider these factors:

  • Day of the Week. Saturday, Friday, and Sunday — in that order — are the best garage sale hosting days. (Why Friday over Sunday? Because not everyone goes to work on Friday, especially in the summer, and Sunday is at-home “family time” for many would-be buyers.)
  • Time of Day. Morning is ideal. Many seasoned garage sale pickers are early birds who get out early to beat the crowds and find the best deals. Morning sales beat the heat of the day in summer anyway. Don’t be shy about starting your sale at 7am on Saturday morning, assuming it’s light by then.
  • Time of the Month. The first week of the month is best. Many small-business owners, contractors, and solopreneurs receive a disproportionate amount of income around the first of the month as clients pay the past month’s invoices, so your buyers could be comparatively flush at this time.
  • Seasonality. In many parts of the country, garage sale season runs from early spring through early summer. Fall is a good second choice for sellers targeting early holiday shoppers. Whenever you plan it for, avoid scheduling your sale when it’s likely to be sweltering.
  • Competing or Complementary Events. Finally, consider what else is happening when you plan to host your garage sale. You don’t want to go up against major competing events, such as your town’s high school graduation. You do want to time your sale to coincide with complementary events, such as arts festivals that bring lots of foot traffic to your neighborhood or seasonal “yard sale days” sanctioned by your local government.

With these considerations in mind, pick a sale date and a backup date (usually the next day) in case of inclement weather.

2. Gather Your Goods

With your date set, it’s time to identify everything you plan to sell at your sale. Do the following:

Box Up Your Home’s Storage Spaces

Grab boxes and go through your attic, basement, garage, closets — anywhere you’re likely to find long-forgotten stuff. This is your chance to declutter and downsize your house.

Don’t underestimate the value of what you find, as garage sale pickers are apt to buy anything from apparently worthless old CDs to disused bottles of perfume to electronic accessories (like chargers and power strips) that have no further use to you. The worst-case scenario is that something doesn’t sell.

Set your boxes of smaller sale items, grouped by similar items that go together in an indoor storage area for now.

Mark Larger Items for Sale

Identify and mark furniture, nonsentimental (and low-value) artwork, yard equipment, and other bulky items you plan to sell. Don’t bother moving these until sale day — just don’t forget that you plan to sell them.

Put Out a Call for Consignments

Send out an email or text to friends and family members inviting them to sell items at your sale on consignment. Keep the arrangement invite-only and limit consignments to relatively small items, as a free-for-all can quickly spiral out of control and take over your driveway.

Work out an equitable split with each consignment partner — ideally, you’d take a small cut of the sale and they’d keep the rest — and set a date for them to deliver or you to pick up their wares.

3. Check on Permits

Many places require permits for publicly advertised sales on private property. Before you get too deep into the planning process, check your city or county government website to determine whether you need one. If you do, you can almost certainly apply online.

Most locales don’t charge application fees, but don’t let that lull you into thinking the authorities look the other way at illegal garage sales. You could be looking at fines well into three-figure territory if you’re caught running an unpermitted sale.

If you live in an HOA community, check with the board about garage sale rules and regulations. Many HOAs don’t allow garage sales at all or have strict rules about timing, duration, location, and other aspects.


Step 2: Promote Your Sale

Advertise your garage sale at least a week in advance, and longer if it’s part of an organized neighborhood event.

1. Use Newspaper Classifieds

Newspaper classifieds aren’t what they used to be, but don’t count them out. If your hometown still has a well-read local newspaper or thriving community publication — especially if it’s free and delivered automatically to every residential address in the area — you can bet deal-hunters use its classifieds section to sniff out local garage sales.

Classified ad pricing usually involves a flat fee for a maximum word count (say, 25 words) and a per-word surcharge for additional verbiage, calculated on a weekly basis.

You shouldn’t need to advertise your sale more than two weeks out, and the Sunday paper on the weekend before your sale might be all that’s necessary.

In your ad, mention particularly enticing or valuable items, such as furniture, collectibles, and small engine equipment like lawnmowers and leaf blowers. Include your address, phone number, and sale date and time (as well as backup date and time).

Then, post the same exact ad on each newspaper’s website if given the option.

2. Advertise on the Web

You can advertise your garage sale for free on dozens of reputable websites that trade in local sale advertisements. The most useful and widely visited are:

Because they’re much less stingy with their word counts, these sites give you more freedom to describe your sale and list individual items for sale.

However, because they tend to list sales as they’re posted, they’re actually better left to the last minute. You can wait until two or three days before your sale day (or the first day of a multiday sale) to put up your first ad.

To save yourself time and avoid errors, write your ad in a word processing program and copy and paste it to each listing website site.

3. Make Yard Sale Signs

Check the laws in your area before putting out signs advertising your garage sale, as they’re banned in some jurisdictions. Again, your city or county government website should have detailed information about outdoor advertising restrictions.

If signs are permitted in your area, use a bright, solid-color poster board and dark Sharpie for effect. Write “garage sale” and your address in big letters with an arrow pointing in the general direction of your house. Use wooden paint mixing sticks to secure ground signs or a wood stapler to affix signs to power poles.

Take advantage of community boards as well, keeping in mind that your signage can be more detailed and less gaudy here.


Step 3: Prep for Sale Day

Spend the week before your sale prepping for the big event.

1. Get Supplies

Make sure you have everything you need at least a day before the garage sale starts. You’ll need:

  • Chairs for you and any helpers
  • A main table for making change and bagging up small items
  • A cash register or money box
  • Enough flat surface area to display everything you intend to sell
  • Enough rack space and hangers for clothing
  • Stickers or tags to display pricing information

Reserve proper tables, including outdoor furniture and folding tables, for delicate items that can’t be placed on blankets or tarps. Set these away from the main flow of traffic to avoid preventable catastrophes.

If you have one, set up a garment rack in a high-visibility location for clothing you plan to sell. Otherwise, lay folded clothing out on tables. In a pinch, create additional elevated space with plywood laid over two cardboard boxes or milk crates.

Make creative use of fixed yard features, such as retaining walls and terraces, to create additional surface space. And don’t be afraid to ask friends to borrow tables, chairs, and the like as needed.

2. Get Set to Accept Payments

Mobile payment technology is ubiquitous these days, but some garage sale buyers still prefer cold cash. That means you’ll need plenty of change in your cash box to break $20s and $50s early in the day.

Visit the bank a few days before your sale and pick up at least $100 in change. A suggested breakdown:

  • 10 $5 bills
  • 30 $1 bills
  • 80 quarters

While at the bank, pick up a reusable cash envelope (or repurpose an envelope from your house) to ferry cash to a secure location inside. You don’t want random people ogling the hundreds in cash you’re likely to have on hand at the end of a busy sale.

After visiting the bank, download at least one secure P2P payment app to accept electronic payments as well. Check out Venmo,  PayPal, and the Cash App.

And consider investing in a portable credit card reader so that you can accept credit cards on-site.

3. Sort Your Items

Sort your items before you price them. This ensures your garage sale remains organized and attractive to potential buyers. Use a low-traffic room in your house, preferably on the ground level, as a staging area.

Bring all your nonbulky items there and divide them into general categories: clothes (possibly subdivided into men’s, women’s, and children’s), books, home goods, toys, and so on.

4. Price Your Items

Price items likely to sell individually accordingly. Don’t attempt to save time by creating high-priced lots out of multiple clothing items or pieces of cookware or dumping like-priced items into a single box buyers need to fish through.

However, you can (and should) create lots for lower-value items buyers are likelier to want in bulk, such as paperback books and CDs.

Use manila tape and a Sharpie to price items, rather than specialized price tags. Price tags don’t really do anything special, and they cost way more than brown tape.

Also, resist the temptation to overprice items on the expectation that every buyer will haggle. Some will, but many won’t bother. They’ll simply walk away from high-priced items.

5. Organize & Arrange Your Sale

Now it’s time to set up your items for display.

Arrange your tables and hangers the night before your garage sale. You simply won’t have time to do a good job the morning of the sale, particularly not if you hope to get an early start.

If you don’t have enough table space for every item, store the remainder in boxes or laundry baskets containing like items.

Secure everything in your garage overnight (with overflow in your laundry room or in-home staging area) and prepare to get up early to put everything out on the day of your sale.

Make a map of your yard on sale day so you know where to locate each element during the presale rush.


Step 4: Host Your Sale

The big day (or weekend) is here. Time to put these time-tested garage sale tips into action.

1. Get Ready

Give yourself at least an hour before the garage sale starts to set everything out and put up signs.

You’ll need at least one helper to move everything safely. You’ll also need to set up your change station, preferably in a shaded area with a sturdy table and comfortable chair.

Before your sale opens, put one last yard sale sign out on the street to ensure no would-be buyers pass by your place, and position your chair so it’s clearly visible as buyers walk toward your house.

2. Work the Crowd

Greet everyone who shows up at your sale, no matter how interested (or well-off) they appear.

Don’t follow would-be buyers around or offer unprompted commentary about your wares. Instead, make it clear that you’re available to answer questions, assume a friendly demeanor, and stay seated. When someone has a question or wants to buy something, they’ll come to you.

3. Be Prepared to Haggle

You’ll almost certainly haggle with would-be buyers at some point during your sale. Don’t be overeager, and always have a firm “bottom dollar” in mind.

If your prep work has paid off and the weather has cooperated, you can count on a steady flow of buyers to take stingy hagglers’ places. Reserve your negotiation strategies for the afternoon or the last day of a multiday sale.

3. Deal With Leftovers

You’re going to have leftover stuff at the end of the day or weekend. Rather than put it out on the curb with a big “free” sign, figure out how to make the most of it — and, if things go well, make a decent amount of money off it.

Do the following:

  • Sell Valuable Leftovers Individually. Use Craigslist, Nextdoor, Facebook Marketplace, and other reputable, secure marketplaces like Decluttr to get rid of pricier items like furniture and electronics.
  • Donate Less Valuable Leftovers to a Nonprofit or Thrift Store. Goodwill takes just about any safe, nonperishable item you could think to donate. So do many locally owned thrift stores. If you itemize your tax deductions rather than claim the standard deduction, you could significantly reduce your federal income tax burden using the applicable tax deduction for charitable donations on your income taxes.

Final Word

If you’ve never hosted a garage sale before, set your expectations now: It’s going to be a lot of work.

These garage sale tips will help, but they won’t change the fact that between now and your sale day, you’ll spend hours organizing your items, setting prices, writing ad copy, and picking up supplies.

On the day of the sale, you’ll spend the entire day — from early morning well into the afternoon — pulling the thing off. If you have lots left over, expect to spend hours more disposing of unsold inventory.

But don’t despair. A successful garage sale will leave you with a less cluttered, better-organized home — and a wad of extra cash to spend or save as you wish.

Source: moneycrashers.com