I use the plan ahead principle here. If your toddler is a 2T this summer, odds are good shell be a 3T next summer. Use this knowledge to your advantage. When the summer clothes go on clearance in the fall, scour the racks for the next size up. If you will use this idea for all seasons, you will end up buying all clothes one year in advance for each season. The end result? You end up paying 30-70% less for all your childrens clothes.
For the very fashion conscious child, be certain to put the clothes away in your closet. That way, when you offer them to your little darling next year, it will all be new to them, they wont know the difference.
Check out online resale shops, neighborhood consignment shops and auction sites as well. Not only can you find cheap name brand cloths, some that are even brand new with the tags still on them, but you can even sell clothing that your children have outgrown, earning you money!
Dont forget yard sales, thrift shops, and hand me downs from friends and family. Also try setting up clothing swaps with other parents in the neighborhood.
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