Let Go and Start Saving
Most people dream of a more relaxing, more balanced future. Maybe the daydream is sharing a coffee with a friend at a sidewalk café. Maybe the daydream is watching the sunset over the ocean. It’s a life with less hustle and bustle.
Most Americans, myself included, are leading cluttered lives. Our attics, closets, and garages are overflowing. We are stretched financially. To quote the movie Fight Club, “We buy things we don’t need, with money we don’t have, to impress people we don’t know.” Americans have $905 billion of credit card debt, $8.7 trillion of mortgage debt, $1.2 trillion of auto loans and $1.4 trillion of student loans. Even our thoughts are cluttered as a result of being “connected” from sunrise to sunset with TV’s, computers, emails, texts, and social media.
I recently helped my parents clear out my late great-uncle’s garage. My great-uncle had a fascinating life. His family ran a traveling theater group prior to World War II. He served in the Army during the war by entertaining the troops. He was a violinist, ventriloquist, and magician. He enjoyed oil painting in his free time. Despite the amazing life he led, we only retained a single box of meaningful mementos: a handful of pictures, his Army medals and a couple of family letters. Most of the items in his garage ended up in the trash or donated to charity.
As I learned from clearing out my great-uncle’s garage, most of our belongings in self-storage units, attics and garages will retain no value to our descendants. There are 2.3 billion square feet of self-storage space in the United States, the equivalent of 7.1 square feet per person. It’s estimated 9% of U.S. citizens rent a self-storage unit at an average monthly cost of $87. $87 a month doesn’t sound like a lot, but it equals $1,044 a year. According to a recent Bankrate survey, 6 in 10 Americans don’t have enough savings to cover an unexpected $500 or $1,000 expense. I would hazard to guess the contents of most self-storage units are worth less than the $1,044 paid each year to store them. An extra thousand dollars could be a rainy-day reserve for unforeseen medical expenses or car repairs.
If you don’t rent a self-storage unit, you might be tempted to pat yourself on the back and stop reading at this point. Before you do, consider your garage. I recently took an informal survey of the homes on my street. There are 28 houses on the block. Only 1/3rd of the garages have cars inside; the other garages are being used for storage. The cost to build a single-car garage is between $8,400 to $13,200 per Costhelper.com. If you build a two-car garage, the cost is between $13,300 to $17,100. Are the boxes of old paperback books, 5-year old utility bills, and little league trophies in your garage worth the implied cost of storing them? Imagine what you could do with a clean garage. You could repurpose your garage as a “man cave”, “femme den”, home gym, or simply a place to park your automobile.
If life were like a 1980’s movie, you could play your 8-track tape of Survivor’s “Eye of the Tiger” and by the time the song ends you could get in-shape and organized. The reality, however, is that we’ve accumulated the clutter in our lives over the span of many years. Give yourself a reasonable timeframe to clear out your storage unit or garage. It might take several weekends or several months.
As you sift through your belongings, divide them into four categories: keep, trash, donate or sell. In deciding whether to keep an item, ask yourself a few simple questions. Will you use it within the next year? If so, why was it boxed up in storage? Will your descendants want to keep it? Garage sales or websites like eBay, Craigslist, and NextDoor can help convert dusty knickknacks to cash. If you normally itemize deductions on Schedule A, non-cash donations can help reduce your tax liability.
It’s easy to have an “out of control” feeling. The news headlines bring frustration. You might feel squeezed financially between credit cards, student loans and/or mortgage debt. Perhaps you’re wondering how you will ever afford retirement. Clearing out the self-storage unit or your garage isn’t going to answer all of life’s nagging worries. It is, however, a tangible first step that is within your control. The next time you read a cringe-worthy headline, don’t respond with hopelessness. Head to the garage with some music and a glass of ice tea. Start the process of decluttering. You could generate some extra cash or reduce your tax liability; more importantly, you will be creating a clean slate for future change.