If you've ever used a soup can for a pencil holder then you've upcycled because the main difference between upcycling and recycling is making something of equal or better value without downgrading the original material or creating more pollution during the process. For example the quality of recycled paper is lower than that of new paper and the same holds true with recycled plastics.
It is good to recycle our waste products but even recycling can damage the environment and use up precious resources such as water and power. For example many grain processors burn their husks to create energy to run their plants but those same husks could be upcycled as mulches or mixed with epoxy and fashioned into gardening containers. Both upcycling ideas will upgrade the value of the waste husks.
Another good example of upcycling is building a house or other structures with lumber, door and window casings, shingles and flooring that have been salvaged from a house being torn down. The value of the material stays the same but the savings to the environment is staggering when you think of the trees, fuel, water and electricity used to manufacture and transport new products.
Yet another example is using old tires for a bumper guard on a boat, as a retaining wall, a swing or as a planter for flowers. To recycle the tires you would need to transport them to a recycling facility, have the metal reinforcements separated from the rubber, cut into shoe soles or ground into small pieces to be used as mulch, which would then be bagged and transported again to a mulch dealer.
As you can see, up cycling is much more cost effective than recycling though recycling is a good choice if the waste is more than you can handle. Both save money and natural resources but up cycling saves much more and is more environmentally friendly.
Another upcycling project that can be done by anyone is to use plastic shopping bags or fabric scraps to make braided doormats and woven shopping bags. This keeps those plastic bags out of landfills where they will stay forever and out of our oceans where they become a threat to marine life.
If you ever made an apron or purse from an old dress or pair of jeans then you have upcycled. If you've used tea and coffee grounds in your garden or turned a broken plate into a mosaic then you have upcycled. There's an endless array of daily waste in our lives that can be upcycled into useful objects if we only take the time and use a little imagination.