Have you ever wondered what happens to all the things we discard? I'm sure that I could do a much better job of recycling our waste. But, I'm pretty good at saving things that can be reused or upcycled (much to my husband's dismay!)
My children have grown up wearing many "handydowns" as my youngest called them when she was little. I've never asked them to wear clothing that was out of style or stained in any way. In fact, most people didn't even know that the clothes were second hand. Many of them were handed down to us directly from some lovely friends whose children had outgrown them. Others were cool garage sale finds or unique buys at Goodwill. Now that they are older, if they are looking for something specific that would be costly new, we've tried looking on ebay with some good results. They may have to wait a little longer to find what they're looking for but it's worth it. They've had fun shopping for second hand finds that expand their wardrobe with fun or interesting clothing we'd never be able to justify or afford any other way. They are also even more mindful of the cost of new clothing now that they are making some spending money of their own.
I find a sense of accomplishment in stretching my husband's paycheck by recycling, upcycling or reusing second hand items that might normally be tossed in the garbage. I hope I've taught them well enough and that they will be able to live frugally when they are on their own regardless of their income level.
I have friends who have upcycled second hand clothing into completely new products by sewing, felting or actually unraveling yarn to make into something else. I love those ideas and plan to try a few projects of my own sometime soon.