How I Save on Kids Clothes

Posted by Adrienne on August 23, 2012

There are many costs associated with raising kids. One cost I minimize is kids clothing. Don’t worry my kids aren’t running around naked all day. I use a twofold strategy for buying and donating that gets my overall cost for clothing close to zero. It’s a big savings during back to school shopping time.

Photo source: Adrienne

The Buy

The majority (80%) of clothes I buy for my kids I buy for $1 an item. Some I spend more on ($3 on snowpants last year) and some less ($0.50/item at the multi-family yard sale) but $1 covers the vast majority. How do I do this? Well obviously I’m not shopping in stores. Even my local used clothing store generally costs more than that. I also don’t like to spend a lot of time shopping for deals (my husband works weekends and dragging 2 kids around to multiple yard sales is not my cup of tea). In fact, I do most of my kids’ clothes shopping in about 3 trips per year.

Watch for sizes. I start by monitoring craigslist for yard sales. I don’t go to just any yard sale. I go to ones that have boys clothes in my kids sizes (or larger). If they don’t mention the size I won’t bother. I think this would be easier if I had girls (I see a lot more ads for girls clothes) but the boys clothes do show up. If I find a good yard sale I go right when it opens and buy up anything that is or will be useful. Some people say you should go to rich areas for yard sales. Personally that hasn’t been my experience. I find that yard sales in rich areas tend to have unreasonable (non-yard sale) prices. Middle and upper-middle class neighborhoods tend to be more familiar with yard sales and price accordingly. I have found very nice, brand name clothes in these areas.

Buy in lots. The other tactic I take is looking for clothing lots on craigslist. People seem to want more than $1 an item but if I find a lot that looks good I’ll email them telling them if they don’t sell their lot for that price I’d like to pick what clothes I want for $1 each. I had a few great trips this way.

The Donation

When my kids have outgrown their clothes I pack them up for donation. I only donate what can be sold again (I don’t donate the stained and ripped) but as parents know kids outgrow most of their clothes before they truly wear them out. I do this only 1-2 times per year so I usually have a lot of stuff. I make a simple spreadsheet of what I’m donating (kids pants – 15, kids shirts 20, etc.). When I donate I make sure to get a receipt.

The Tax Deduction

For estimating the value of what I’ve donated I use the Salvation Army Pricing Guide. This handy dandy guide lists a high and low value for items generally found in their stores. I’m familiar with what they carry and I’d say the price guide is pretty accurate. I use the mid-point for valuing my donation. For example kids shirts have a range from $2 – $6. I use $4. If I thought my donation was of lower quality I would use the lower value. If you’re in the 25% tax bracket (meaning your last dollars are taxed at that rate) a $4 donation = $4 x 25% = $1 tax savings.

You value your donation based on what it would sell for (or what you paid – whichever is lower).
According to IRS Publication 526:

“You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops.”

Don’t forget to get a receipt for your donation. There you list everything that you’ve donated. This is essential for the valuation at tax time.

The Fine Print

Yes there are things I buy new (such as socks and underwear) but there are also items we get for free (gifts and hand me downs) so I figure it’s pretty much a wash. My kids are still young (4 and 7) but I can’t see my methods changing much as they get older. If they want high priced designer clothes when they’re teenagers they can pay for it with their part-time jobs just like I did. (yes I’m talking to you loud multi-color-multi-pattern ESPRIT shirt circa 1988).

My best score from last season? The $1 I spent on the L.L. Bean winter coat (see picture above). We liked it so much that when I found one in a larger size last month I paid 4x as much for it. $4 for a winter coat. Don’t worry I’ll be sure to donate it when we’re done.

Update: A retired IRS agent pointed out that if you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.

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Comments to How I Save on Kids Clothes

  1. Giving Property That Has Increased in Value
    If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.
    Your basis in property is generally what you the paid for it.
    If you need more information about
    basis, get Publication 551.
    Different rules may apply figuring your deduction depending on whether your property is Ordinary income property, or
    Capital gain property
    Pub 526

    Retired IRS agent

    • Adrienne, could you clarify how you get around this rule?


    • Thanks for the additional information! I didn’t know about the change
      in the deduction amount if you paid less than FMV for the item. I’ll
      update the article with a correction. I learned something new today.
      Here’s a link with more information:


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