How Your Junk Is Costing You Money

Much of what we have we don't use. Pare your closets and grow your bank account.
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You have too much junk and it's costing you money, time and freedom.

Martha Stewart says that

80% of the stuff we have we never use. That means that eight out every 10 purchases you make are a waste of money.

What's ironic is that most of the time when we purchase something, it's because we think that it will simplify our lives and give us more free time. The truth is that buying stuff rarely achieves this goal. Here are some of the costs of having too much stuff:

Lost savings

: All of the stuff that you buy costs money. If you are only using 20% of all the things that you purchase, that means that 80% of the stuff you buy is money wasted. That adds up to a lot of money over a year and an incredible amount over a lifetime. Had you not purchased the 80% of the things you don't use, you'd likely have savings and retirement accounts that look a lot healthier than they currently do.

Lost interest on savings

: Speaking of which, you also lost the interest that you would have earned if you had instead placed that money into a savings account or invested it. Over years, that can add up to tens of thousands of dollars in lost interest.

Upgrades and accessories

: One of the things about stuff is that when we aren't using it, we often think it's because the item is out of date or not in style. Instead of getting rid of the item, people often upgrade it with new accessories or get a more stylish model -- which creates even more stuff that we end up not using. That equates to more wasted money.

Cost of using stuff

: Some of the stuff that you purchase will cost you money for its use or upkeep. If you purchase a fancy TV, you will also likely purchase a cable package. Chances are you will purchase a package that is more than you really need and thus spend more money. If you have an iPod, you will likely buy new songs as you get tired of the previous songs that you purchased. Most electronics will use energy when plugged in, whether you use them or not. All this adds to the cost, especially if you are paying for it and not using it.

Storage unit

: If you own a house that isn't big enough to hold all your stuff, you may rent a storage unit to keep some of it. That means you are paying a monthly fee to store stuff you are obviously not using, since it isn't even at your house.

Bigger home

: You probably have a bigger house or apartment than you need due to all the stuff you own. If you have a bigger home, that means thousands of dollars more in interest charges on your mortgage. You'll need to pay higher taxes, you will have higher utility bills and the overall upkeep costs will be more.

Less productive

: The stuff you buy to simplify your life and make you more productive can actually cost you both time and money. A computer can make your work more productive, but not if you spend half your day on YouTube watching videos instead of working. A mobile phone can easily make you less productive if friends constantly interrupt you with calls when you are trying to work.

Chances are that you truly don't realize how much extra stuff you really have. Before you decide that this article is not applicable to you, take a few minutes to go through your house and do an inventory.

Don't forget the closets, drawers, cabinets, the garage, the basement and the attic. Go through each and for every item you come across, ask yourself whether you have used it in the last six months (or the last year if it is a seasonal item). If you haven't, then it's likely something that you will never use and something you don't need.

Once you begin looking, it will likely take a lot longer than a few minutes to go through everything and you will find yourself with a large pile of stuff that you no longer need. If this is the case, here are some options to get rid of it.

Sell it

: If the item still has value for someone else, sell it. You can do this through auction sites such as

eBay, listing it on classified sites such as

CraigsList, having a garage sale or listing it in your local newspaper. If you don't want to go through the trouble of selling your stuff yourself, there are a growing number of individuals and businesses that will sell your stuff for you on eBay for a percentage of the profits.

Give it to charity

: If you don't think it is worth the effort to try to sell, consider donating your stuff to a charity. Doing so will help a good cause, plus has the potential to get you a tax write-off. Qualified charities such as

Goodwill and the

Salvation Army are possible places to which to donate your stuff, and there should also be a number of local charities that may be interested in your items.

Consignment shop

: Another option (especially if you have nice clothes) is to take them to a consignment shop that will sell them for you and give you a portion of the proceeds.

Give it away

: If you simply want to get the stuff out of your house as soon as possible, you should easily be able to give it away for free. Using sites likes CraigsList or

Freecycle is a good way to find plenty of people who would like to relieve you of the stuff, no matter what it is.

Once you have sold or given away all the stuff you no longer need, you need to make sure that you don't begin accumulating new useless stuff again. Here are some things you need to ask yourself before you decide to buy something new:

  • Do you need it?
  • Will you use it?
  • Will it simplify your life?

Getting rid of junk and learning not to purchase stuff that you aren't going to use should free up a significant amount of money in your budget. This money can be used to save for retirement or invest, and ultimately to buy those things that you really do need and will use.

Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs SavingAdvice.com.