This weekend I cleaned out my basement. We are moving next month and I discovered that we still have a ton of boxes that we never went through when we moved about a year ago, so this weekend I went through the boxes. We threw out old CD cases, recycled my old CFP® class notes, and made a pile of stuff to donate. We also discovered a few items that may be of value to someone on eBay or Craigslist. It made me think about a few things:
- We have a lot of junk
- Other people have lots of junk in their basements, garage, attic and some rent storage spaces to keep all their junk
- Sell your junk and go through your storage space and use the money you were paying to rent the storage space to start your Roth IRA
Why So Much Stuff?
Americans have a lot of stuff (this girl included). We keep things we like because we can’t part with them, but then it comes time to move and we pack things away in boxes and sometimes they stay in boxes in our basements for years. Then we have too many boxes in the basement so we need to rent a storage space for all our stuff. Well, now is the time to go through your boxes and sell your crap. There’s even a course on Man vs. Debt called exactly that! They’ll show you what to do. If you’re looking for great a great blog about simplifying your life, I love Be More With Less.
What To Do Next
I’m willing to bet that you have at least a few hundred dollars probably $1,000 worth of stuff that you’re not using and is just sitting around. Maybe you have an old collection from when you were a kid or furniture you no longer need. Why not sell these things and use the money to start your Roth IRA? If you are paying to rent a storage space, clean it out, sell items and use the monthly storage fee to invest in a monthly contribution to your Roth IRA. Also, if there are items that you don’t want to sell and would rather donate to a qualified charity, you may be able to qualify for a valuable tax deduction. Take pictures of items before you donate them for ease at tax time. Use apps such as: iDonatedIt to make this process easier.
After going through this process, I promise you will feel amazing, and here’s why:
- You will end up throwing away/recycling garbage bags full of clutter and that alone will make you feel better. Some surprises for us included a ton of magazines, paid bills from 2007, cords from random electronics we no longer own, and CDs from when we were in high school!
- You will find a few random things that you’d been looking for. We found: my red leather clutch, winter coats (seriously, we had no idea where they had gone), and Christmas ornaments from family members. These items can be organized so that you can find them next time.
- You will donate gently used items that you no longer need such as clothes, home décor, and random gifts from people that never use but feel bad throwing away. You know that your stuff will go to someone who will appreciate it more than you and you may even get a tax deduction.
- You will make money by selling your items on eBay or Craigslist. We have a few pieces of furniture that we are going to try to unload on Craigslist and a few collections we are going to try selling on eBay. Cha-ching!
- If you cleaned out a storage space, you will no longer have to pay a monthly fee to rent it, freeing up money in your monthly budget to put towards your Roth IRA.
Open a Roth IRA!
You have now freed up money to contribute towards a Roth IRA! The money in your Roth IRA grows tax-free and since you already paid taxes on it when you made the contributions, you don’t pay taxes when you withdraw the money in retirement. You can open a Roth IRA at any discount brokerage firm such as: Schwab, Fidelity, or Scottrade and many will waive the minimum account balance if you set up a monthly contribution. If you save $200 a month for 40 years and earn an average of 7%, you could have over $500,000! Don’t you think it’s time to go through your junk?