Most of us don’t realize how much storing our clutter costs. We justify holding onto it because it’s just sitting there and we might as well keep it in case we need it again.
In reality, that clutter is costing you more than you think.
Yes, you paid for it but you don’t have to throw it away. In most cases, you can sell it. Take a look at my post How to make over $3,000 in cash selling your clutter.
You might be thinking: “if I sell it, I will definitely be losing money”. While you will usually get less than what you paid for it:
- you (hopefully) got use out of it, and
- the longer you keep it, the poorer it’s making you
Why is it costing you money if it’s just sitting there?
Every day you hold onto something, it loses value for any of the following reasons:
- it might become outdated – newer and better versions have come out and no one wants the old stuff anymore. You might find it difficult to sell your first generation iPod even though it still works.
- it becomes out of style – sorry, but the market for people who want your Baby-G watch is pretty small.
- it’s no longer usable – this is particularly the case for electronics that are not compatible with newer hardware or software.
So really, we all want to hold onto our clutter because we paid for it and we’re afraid to lose money. What we don’t realize is that holding on is loosing if you’re not going to use it.
The longer you keep something, generally, the more money you lose. Obviously, there are exceptions to that rule (such as collectibles).
Do you have debt to pay off?
If you do, then holding on to your clutter is costing you amounts above and beyond the loss in the item’s value.
Last time I did a spring clean, I made $3,400 selling things I hadn’t used and was unlikely to use again. I put that extra money towards my credit card and it saved me $57 every month.
How did I get to $57 in monthly savings?
My credit card, like most, has an annual interest of 19.99%. Had I not used my clutter cash to pay off $3,400, it would have cost me $57 in interest every month until I eventually paid it.
Now, you might be thinking, $57 a month isn’t a lot of savings. Especially when you have to put up $3,400.
Personally, I would rather have an extra $57 a month and treat myself to a nice dinner than give that money to my bank to cover interest.
Debt will have to get paid someday. The longer you wait, the more it’s going to cost.
On top of that, it didn’t actually cost me anything because I sold stuff I never used. Getting rid of it didn’t change anything in my life.
Think of your clutter as free money sitting there, waiting for you to put it to good use.
What about that time value of money?
If you don’t know what I’m talking about, the time value of money is a term used in finance to say $1 today is worth more than $1 tomorrow.
You might be thinking, “a dollar is a dollar. What are you talking about?”.
Put simply, what this means is if you had $1 today, you could put it in a savings account and earn say 2% interest on it.
In other words, that $1 today will be worth $1 + 2% interest tomorrow putting you in a better position than collecting only $1.
How does the time value of money tie back to my clutter?
Well, all that stuff you hold on to is not only decreasing in value with time but you could have gotten cash for it today and accumulated even more money tomorrow.
Do you have a storage unit?
We generally get storage units because we don’t have enough space in our homes.
That may be the case, but to be frank, the problem isn’t usually “not enough space”, but “too much stuff”.
I know, it’s a bold statement but really pause and think about the things you own room by room, closet by closet, box by box.
How much of your stuff do you use regularly?
Chances are, you truly only need a very small percentage of those things. This is without even considering all the stuff we forget we have.
Marketers have done an incredible job at making us think we need their products and we feel compelled to buy them. Don’t blame yourself, it’s their job to make us want to buy and they hit the nail on the head doing it.
Back to clutter and storage units.
If you were to clear out the things you no longer need or use, you could create more space in your home. Space which you could use to keep everything in one place.
Imagine the monthly savings if you got rid of that storage unit.
Assuming you rent a unit for $60 a month, that’s $720 a year not even considering what you could do with that extra cash like:
- save money on interest by paying off debt
- make more money by reinvesting or putting it in a savings account
- maybe you haven’t been able to afford a vacation in a while but that extra $720 is what you were missing
The options are seemingly endless but the only thing standing in the way of a better life is yourself.
Take control of your life and start by going through all the clutter you’ve accumulated.
It’s costing you money and weighing down on your life.
Not only that, why wouldn’t you want cash over stuff you don’t use or need?