How to Make Money and Happiness in One Day

by RJ

in Making Money

There’s no better feeling than taking a bag of clothes to Goodwill, dropping it off, and never worrying about it again.

Why is it, that getting rid of stuff (clothes, toys, books, blankets) feels so good? Is it because I know my useless junk, can go to someone who really needs it? In my case, I think it’s self-serving. I no longer have to think, clean, maintain, or pay for that stuff.

This had me thinking about the other costs of stuff. Obviously, there is an upfront cost to whatever material item you buy. However, that first cost is just the beginning.

It’s hard to put an actual dollar figure on what holding on to stuff costs you per month. Although, by crunching just a few numbers, it’s easy to see how your stuff costs you hundreds of dollars per month and a lot of time.

Mortgage/Rent – 1 vs.2 Bedroom Apartment

Using RentVine, you can see what the average rent and mortgage payment is in your city.

In Chicago, the cost to rent a one bedroom apartment is $963. The cost to rent a two bedroom apartment is $1,281. In other words, your paying rent for your stuff at a cost of $218 a month. (This applies mostly to couples w/o kids)

The difference between costs get larger if you buy. For example, you want to have a storage room in your house. So you go from a two bedroom home to a three bedroom home. The average mortgage payment of a two bedroom home right now in Chicago is, $1,225. The average price of a three bedroom home is $1,923. A difference of $698, per month.

Taxes & Insurance

If you own property, a general rule of thumb is that taxes and insurance cost 2% of the value of your home per year. Therefore, if you bought a $300,000 home, your annual taxes and insurance costs are around $6,000.

Now, say you can spend $50,000 less because you don’t need the square footage or an extra bedroom. That’s a $1,000 ($50,000 x .02) savings each year.

Your Stuff Creates Hazard

As a kid, my mom and I were out in the garden as a bee came over our head. My mom, who is allergic to bees, slowly backed away. I proceeded to explain to her, not to be worried because I would “kawa banga” the bee (Yes, I was a Ninja Turtles fan and those were the exact words out of my mouth). As she was backing away, she tripped over one of my toys laying in the yard, fell awkwardly on her elbow, and shattered it.

We laugh about this incident now. Although, I’m wondering how she managed to raise twin boys, who were under the age of three, for the six months while her arm was in a sling. The point is, I’m not the only one with a personal story of how someone got hurt tripping over stuff. Plus, this isn’t the only way your stuff increases your risk of a loss. There is term in the insurance industry for a fire in a home caused by clutter, called “hoarding fires.” Unfortunately, this is getting to be  a common occurrence.

Time & Money Spent Cleaning, Buying, and Maintaining

If you asked my dad what is in his toolbox, his response would be his checkbook. That answer works for him because he earns more per hour, than what is costs him to have the lawn mowed, house cleaned, shower fixed, etc…

Myself on the other hand, I can’t afford that luxury. When something breaks I need to spend the time on YouTube learning how to fix it. I need to spend the time and the money, going to the store to replace it.

Selling Your Stuff – What I’m Doing

Since my wife and I have decided to move to Chicago, we’re currently going through our house and getting rid of anything excess. Our plan is to go from about 1,700 sq ft house, to 700 – 800 sq ft apartment.

We will go without a TV because my computer has a cable hookup. We will go without a car, since there are ZipCar and iGo services all over the city. We’re selling our bigger couches and going with a larger dining room table, so we can still have family over for dinner. The most exciting part for a financial planning geek like myself, we will be lowering our fixed monthly expenses about 30%.

If you made it this far, you owe it to yourself to take action. Go though some of your belongings and either sell or donate them. Below are some additional resources, to help you get rid of your stuff. I promise you, it feels good and you might even make some money.

Additional Resources


In the comments, please share what other costs of stuff I didn’t mention.

Photo by: John Pannell

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{ 1 comment }

Financial SamuraiNo Gravatar September 6, 2010 at 8:49 am

I enjoyed this post! Decluttering feels AWESOME!

The more room you have, the more you have to clean!

I’ve refinancing a couple mortgages now which help too.

I donno about going from 1,700 to 800 sqft though. That could be tough!!


The Yakezie

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