Sell your c**p, pay off your debt, do what you love
I read Man Vs. Debt from time to time. It’s a blog by an American guy called Adam Baker and that’s his motto.
And what a great motto it is. Baker spent a year getting rid of everything except his wife, child and a couple of backpacks full of bare essentials. He paid off all his debt, sold what could be sold, trashed what could be trashed and then he hit the road.
Doesn’t that sound fantastic? And in Man Vs Debt he chronicled the lot.
But his blog isn’t just a travelogue. It’s a personal finance blog too. How to get by on less. How to de-clutter. How to become 100% debt free. And most of it is stuff he’s actually done.
I’m drawn to his philosophy because like many of us, I’m overwhelmed by clutter and junk and I know there's still lots I need to do with my finances. The physical clutter is all over my house and it’s all around the desk I’m writing this from. My garage is so full of boxes and junk that there’s barely space for me to get my bike in when I get home from work.
The boxes in my garage were packed five years, one country and two house moves ago. I don’t know what’s in most of them. And how could they have any value to me? I’ve never needed anything from them in five years. Or if I do want something, I walk in, look around, open a box or two, shake my head and walk out swearing that someday I’ll actually do something about it.
The task of de-cluttering is so daunting though. Where do you start? What do you do with all that stuff? How do you decide what to dump? Well, here’s a suggestion from Baker and I’m going to try it as soon as I get home.
Start small. Very small. You can’t magically de-clutter a middle-aged family man’s house in one fell swoop. So, pull out a drawer. Empty all the contents out of it and go through them one by one. Baker says you should ask yourself “Does this item bring joy, value or purpose to my life?” If the answer is yes, put it back in the drawer.
For the rest of the stuff, make some piles. Stuff to dump, recycle, sell and donate. And when everything is in it’s rightful place, do just that. Put the stuff on gumtree or donedeal. Drop it off at the charity shop. Throw it in the bin. Just get it out of your house.
In her book The Simple Living Guide, Janet Luhrs says that if you go out and buy something, you need to make room for it. Therefore something of equal size or purpose needs to leave your house. Baker says the same thing but goes one step further. He says if you bring one thing in, two things must leave.
Considering the rapperlike bling bling accumulation frenzy and excesses of noughties in Ireland, I think this kind of thing is pretty timely. We really do need to downsize our expenditure and free ourselves from all the stuff we just don’t need. And there’s plenty of movements and ideas out there like the 365 Day Declutter where you jettison one thing from your home or your life per day for a year. Even more extreme is the 100 Thing Challenge which is a pledge to cut your possessions down to - you guessed it - 100 things. But heck, when I was a student, I had half that even when you counted my socks as individual items instead of pairs and I was a happy camper.
But clutter isn’t just physical and again, this is where I’m drawn in particular to Baker’s blog. Clutter is financial too. How many credit cards do you have? Do you really need them all? Do you have investments and do you know what they are? Why are you paying for stuff every month that you don’ t need?
In Ireland, most of us have investments, but we don’t actually call them investments and many of us don’t have a clue what they do. A really good example is our pensions. I wish I’d known that the pillocks who were managing my pension had stuck most of my hard saved retirement money into Irish bank stock. Now my retirement fund is worth practically nothing. All that money I put away month after month and trusted to Bank of Imbeciles to manage was just thrown on the great Irish financial bonfire. I would have been better off taking that money every month and squandering it. At least I’d have some memories to show for it, or at least some stuff to sort through now as I de-clutter my home.
Just like our physical lives, I think we need to clean up our finances too and educate ourselves better about money. If you have investments, you should know want they are. If you buy stock, you should know what the company does! And I count myself as someone who needs to take action here. The recession (or is it a depression?) is helping us to focus on our finances much more and we are learning how to manage our money better but there’s still plenty that can be done and plenty to learn.
Here’s a super easy step you can do today. If you have money in the bank, don’t let them get away with paying you 0.01% interest. That’s just one euro per year in interest for every €10,000 you have on deposit. And believe it or not, most of the money on deposit in Ireland is earning practically nothing despite some of the best rates in Europe on offer to Irish savers.
Here’s a quick back of envelope – if you leave your 10 grand in a Bank of Ireland demand deposit account for 5 years, they’ll pay you a fiver in interest after five years! You know how much they’ll make lending it to your neighbour? More than €3,600. At least if you put your money in an account earning 3%, you’ll make €1,600. It’s not as good as the bank is making, but it’s better than a fiver!
Anyway, this is stuff we know. We just fall into the inertia trap and don’t de-clutter that room, shed the stuff we don’t need, shop around for better rates, earn higher interest and cancel monthly payments for crap we don’t need. My problem has been that there’s so much clutter, so much crap, so many things I should be doing better with my money that I literally didn’t have the first idea where to start. So I’ve been a slow starter, but I’m determined and inspired now.
So back to the advice of Adam Baker and Janet Luhrs and even David Bach (the Latte Effect guy). Start small and simple. Don’t try to fix everything at once. Just identify one small think and go for it.
With my finances, I’m going to look at my pension and if I don’t like what they’ve got what’s left of my money in, I’m going to move it. For my home, it’s going to be that drawer, then maybe I’ll move on to a cupboard, and perhaps by the end of the year I might even have my garage back!