I spent Sunday sewing on a blue suede jacket. Now, you may ask, what on earth does this have to do with financial planning? Well, sewing gives you lots of time to think and obsess about other things, and this particular jacket was a perfect launch pad. Mainly, because I realized that I purchased this fabric when my daughter was an infant, and she’s in college now. I’ve been a) hoarding it because it was expensive; b) never found the perfect use for it; and c) kinda forgot about it. And therein lay three principals for wasting a lot of money.
Hoarding
If you’re not using what you have, have no clear use for what you’ve acquired, or think something is “too good to use” (ask me about those indigo fabrics I bought in in Japan in 1998), you’ve invested a lot of money in something that has no returns. Do you own wedding china? How many sets of bed linens do you use? Any clothes with tags still on hanging in your closet?
Not only does this stuff represent tons of money invested with no return, but in many cases it costs you money—in depreciation, at least, but sometimes in storage costs (I have a fortune in plastic tubs) and maybe even in insurance. If your possessions have outgrown your house, caused you to buy a bigger house to store it all, or (the ultimate) you are paying a monthly fee for a storage locker somewhere, it’s time to de-acquisition (errrr, sounds better than de-junk).
Sell it on E-bay and put the money in your Roth where it will actually do some good. People who start down this path find that they can raise a lot of cash from stuff that will soon junk up someone else’s house. Go ahead, walk through one room and estimate the amount of money you actually spent on stuff you don’t use. Any musical instruments nobody plays? Okay, go take a pepto.
“Perfect use”
Not everything can be quantified in dollars. If you still want to keep a lot of stuff that’s precious to you, then promise me you’ll at least use it. My aunt, too, was a fabriholic and when she died, I inherited enough fabric to clothe my daughter for the first two years of her life. But that was a small fraction of what she had. A lot of it was polyester double knit (yes, it was once popular), and there was a significant amount of avocado green and harvest gold. Even once-wonderful things go out of fashion. Unless you keep them long enough to become vintage. And beat the moths and silverfish.
And if you do love it, why aren’t you using it? In a month, that blue suede will be on my back, the Japanese fabric is next up, and I’m selling the teddy bear fur from a long-ago (and misguided) business attempt as soon as dear daughter comes home for fall break and puts it up on her eBay account.
Forgot about it
Here’s a secret: don’t buy anything unless you really have time for it on the schedule. If everyone followed this principle, there would be virtually no boats sold and no one would have more than one car per person. People with hobbies (whether carpentry or knitting or computers) are particularly guilty here. I know more than one friend with a computer boxed under their desk that has never been opened. Can you work all the electronics in your home? How many tools do you have whose manual is still in the plastic baggie?
Don’t buy stuff ahead of need just in case it might come in handy one day (you’ll never be able to find it at that point), because it’s a great deal (I have perhaps 100 metal zippers my aunt bought for $1) or because you may never see it again (c’mon, this is the era of web shopping, where you can buy all the stuff someone else has stored for you all these years).
Ask yourself:
- when am I going to get time to use this,
- am I afraid to use it,
- where am I going to put it, and
- what else can I give up to make room for this?
No good answer? You’ve just saved yourself a lot of investable cash.
