If you're a fan of the show Modern Family, you know the Costco scene: Cameron and Mitchell head into the store to buy diapers. It's Mitchell's first time and he falls into the Costco trance and burns through the aisles filling his cart with stuff: a paper shredder, olives, baby formula, rugs and storage bins. All super-size. He then suggests picking up a shed on their way out so they can store their new purchases. It's easy to accumulate stuff, whether we're buying or inheriting. It's not so easy to get real about how much stuff we actually have, and what it's costing us.
Peter Walsh, authour and TV host of Enough Already!, says he regularly meets people with homes packed full of purchases they never use. Purchases costing tens of thousands of dollars. He also says that almost without exception, where there is a clutter problem there is a financial problem.
In his book, Lighten Up, Mr. Walsh lays out two simple ways for us to assess just how much money we are sitting on.
The first is to take an inventory of each room. If you're not at home, take a mental inventory right now of your bedroom and master bathroom. Run through everything you don't use: excess clothes in the closets, overflowing piles of shoes, an untouched exercise bike in the corner, old beauty products. It's a simple approach but it creates a powerful visual of how much excess we have.
It's easy to accumulate stuff. If you've been in your space for more than a few years, it's even easier. You likely know if you have attained pack rat status, but if you're not sure how bad it is, take this short quiz. Regardless of our diagnosis, we all have past purchases we can purge -- items that cost space, unnecessary stress and, if put on credit, unnecessary interest payments.
The other assessment to calculate the cost of our clutter is to figure out how much of our family's space is occupied by things we don't need or how much it's costing us to act as a storage facility. Take the rough value of your home and divide by the square footage. This provides the value of each square foot. If you live in a $350,000 home and it's 2,000 square feet, for example, then each square foot is worth $175. You start to see Mr. Walsh's point. What is the point of storing items you don't use? What is the point of hanging on to things you no longer need and can sell for the things you do? The money you make, even at a fraction of what you originally paid, could be put toward more important goals for your family: paying down debt, building up savings or planning experiential purchases.
If sorting through piles of clothing and boxes in the basement seems daunting, Mr. Walsh says take it step by step. Devoting 10 minutes a day is a good start. The more space and cash you free up, though, the more motivated you'll be to keep moving forward.
Angela Self is one of the founders of the Smart Cookies money group.