There has been much in the media over the last few years about the dangers of acquiring and holding on to too many material possessions. Even if your home doesn’t qualify for an episode of Hoarders, it’s a good idea to go through your things and determine what you should keep, give away, or throw out. There is money to be made and, by streamlining your stuff, you can raise your spirits, too!
Decumulate Stuff; Accumulate Assets
This exercise helps you to create more space and peace in your home and enables you to make some money at the same time. Spring is a perfect time to do this.
Decide what—and how—to dispose of what you don’t want. Ask yourself:
- Do I need it?
- Will I use it?
- Do I love it?
- Do I have a place for it?
Ask yourself these same questions when you are evaluating a purchase. It will help focus your spending on things you truly do need and save you from having to declutter again in the future.
Selling Your Stuff
A garage sale can be a lot of work, but it is a good way to sell your things. An advertisement in your local paper will typically attract potential buyers to your place from miles around. If you are looking to sell the entire contents of your home or someone else’s, hold an estate sale. In this case, you may want to hire a company to help you manage and coordinate the sale. This will, however, eat into your profits. Posting items for sale online to such sites as Ebay, Craig’s List, and Etsy, a lesser-known online marketplace for handmade items and vintage clothing, is another option.
Giving to Charity
If you donate items to a qualified charity, you get a tax deduction in return, typically for the fair market value (FMV) of the item(s), which the IRS defines as “the price a willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell.” In the case of household items, this is generally thrift shop value. Any item you give away should be in good condition or better; anything broken, stained, or ripped should be discarded.
If the FMV of your donations is more than $500, you must file Form 8283 with your federal income tax return. If a single item has a FMV of more than $5,000, you must get a written appraisal from a qualified appraiser before you can take a tax deduction; and in certain cases, such as artwork valued at $20,000 or more, the written appraisal must be attached to Form 8283.
Going forward, consider this advice from organizational experts:
- Don’t save things “just in case”
- Don’t keep things out of obligation – a gift giver’s intent was to make you feel good about the item. If it is no longer serving that purpose, give it away
- If you are holding on to things that belonged to someone you love, keep a few items to honor them and let the rest go
- If the price is the best thing about an item, don’t buy it
Now doesn’t that feel better? Purging yourself of excess possessions can actually be financially rewarding and refreshing. Hopefully, it will make you think and lead to wiser, more practical buying decisions in the future.