Improve Finances by Giving Away Stuff (for Free)?

Over the past few months, as my wife and I adjust to living in Boston, there has been a recurring thought. Since moving several hundred miles from where we used to call home, my wife and I have realized that we have a lot of stuff. Too much stuff.

I have come to realize that I can be a pack rat. I like owning items. If someone were to ask me if it would be better to buy something or to experience something, I would answer “experience,” but only because that is what you are supposed to say. The truth is that I like to hold on to things.

moving

It may sound clich√©, but my rationalize goes something like this: “You never know when we could use it…

I’m sure that’s what all the hoarders tell themselves, but part of my reasoning falls in the logic that I don’t want to re-buy something later. For example, I may have some t-shirts that I don’t wear that often anymore, but I hesitate to get rid of them because I would it MIGHT mean that I would need to buy more shirts later.

It may sounds like I’m trying to justify my addiction, but it’s the truth.

My frugality drives me to hoard stuff.

But, that’s about to change. As I mentioned, I have slowly been coming to grips with the reality that we have TOO much stuff. Stuff that we don’t need or use. Part of this came from moving; when you exert energy to bring an item from one place to another, you really begin to evaluate if it is necessary to keep. By getting rid of it, I estimate a savings of at least 60% come moving day. The other part is just me being contemplative.

In fact, I have a new theory about possessions that I want to run by all of you.

Ready for my Crazy Idea about Extra Stuff?

As I mentioned, part of why I keep so much stuff is because I’m afraid it will cost me more money to get rid of it because I may need to replace it later. To lay it out clearly, here’s the logic:

  1. I have item X.
  2. Item X has not been used in a over a year.
  3. Item X is not that important.
  4. I don’t need item X right now.
  5. I could need item X in the future.
  6. If I were to get rid of it now, it could cost me more $ to replace item X.
  7. It’s probably better to keep item X in the closet just in case.
  8. I’m being frugal.

That more or less explains my rationale. However, any objective observer can see the fault in my logic. If I haven’t an item in over a year, I don’t need it now and most likely don’t need it EVER in the future. Instead, I am letting fear of a future purchase control my habits.

This is not good. In order to fix this, change my lifestyle and get rid of unnecessary items, I need to convince myself to follow a different logic. Here’s where the crazy idea comes into place.

What IF it’s actually better financially to get rid of stuff (for free)?

Many people often use getting rid of stuff as a way to obtain a little bit of cash. They coin it ways to earn money, but really it’s recouping some of your loss (since you likely paid more money upfront than what you sold it for as a used item). I do this. In fact, I just did this. After Mrs. 20s and I moved to Boston and into an apartment with central air, we no longer needed our window AC units. We just listed them and sold them for about 1/2 of what we paid for them 3 years ago. I probably could have started higher and recovered 60-70% of retail price, but I wasn’t sure, and I knew I could sell them for about 50%.

But, selling your crap is NOT what I’m talking about.

What I’m talking about is giving away stuff for free.

“How can giving away stuff for free better financially?” That’s losing money!

Well, I’m glad you asked. While it may not sound logical, I have a theory that getting rid of your unnecessary items is actually financially better for you than keeping it (to avoid a re-purchase in the future). Here’s why:

  1. I think giving it away is much easier than selling it. If you have a hundred items of clothing that you will never wear, you may be tempted to have a garage sale. But, that takes energy and work – something a lot of us don’t have. Because it means more work, it’s less likely that you will get rid of stuff if you want to bring in cash. Instead, donating it away is easy and painless – thereby increasing the odds of actually doing it. (If you have the time/energy to have a garage sale, go for it – but that’s not where the financial boost comes from).
  2. By getting rid of unused stuff (as I’ve started to do), you will begin to see that you really don’t need that stuff (as I have seen). Just last week, my wife and I got rid of two more paper bags full of books. They weren’t worth much and we simply dropped them off at a place that accepts donations. We not only cleared more space in our living room, but also convinced ourselves that we really don’t need those books. Pulling the plug and getting rid of those unused items is the proof that you need to keep going.
  3. In starting this process, you will then become curious what else you can get rid of. A t-shirt here, a book here, an old pair of shoes here eventually become an avalanche of de-clutter. Slowly, you begin to simplify your life, keeping only the items that serve a purpose, have some sort of special meaning, or are absolutely necessary.
  4. [HERE'S WHERE IT GETS GOOD] Because of this new lifestyle, you no longer need to buy unnecessary items. Any and all purchases are closely evaluated because of your strict requirements of possessions. This not only saves you a ton of money in the items you no longer buy, but also because you realize that items do not buy happiness.
  5. Instead of trying to buy your happiness by spending even more money, you instead are able to prioritize savings, investing, and enjoying the activities that bring you happiness – not that the stuff that you think will buy happiness.

In other words, to summarize my new theory (which many others are probably screaming, “DUH!”), it goes something like this:

While it may seem illogical to get rid of stuff without trying to sell it, instead it actually helps your finances. It allows you to quickly change your lifestyle¬†from hoarder, understand the benefits of simplicity, and start spending your money where it’s really important to YOU – not where society tells you to spend it.

Putting My Theory to Practice

Sounds like a great theory – makes sense, right? Well, time to put it to the test. Over the next several months, I am going to start getting rid of stuff – stuff that I would normally cling to. It’s not going to be easy, but I’m going to do it.

I’ll update you all along the way, but I’m hopeful that by getting rid of unnecessary items, it will not only simplify my life, but bring more happiness and ultimately boost my finances.

Readers, want to join me? Comment about things you need to get rid of and GO do it.

One Response to Improve Finances by Giving Away Stuff (for Free)?

  1. Ricky Willis says:

    Hi Corey, I’ve only just found your blog but I think it’s great! I really love this post and I definitely think your theory could work.

    I’ve also made this post one of my top 5 from this week :D

    http://skintdad.co.uk/2014/07/top-five-posts-around-web-04/

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