Even though I can't peer into your closets or surveil your garage (or can I?), I can say this with certainty: You have a lot of Stuff. And as the proud owner of a lot of Stuff, you should consider two things:
- Your Stuff could get stolen or destroyed, and then you'd have to prove to your insurer that you once owned it, and
- The Stuff you no longer want can be turned into cash.
I can personally attest to the latter. As I wrote previously, the Brokamp family kicked off 2010 by moving into a new house, so over the past few months we've sold all kinds of things on Craigslist. We also held a couple of yard sales — one in below-freezing weather. The total take was more than $2,000 in extra cash.
Of course, you probably want to keep most of your Stuff, and if you're smart, you have homeowners or renters insurance to protect it. But if your residence is burgled or burns, how would you prove to the insurance company what you once owned?
The answer is to take a home inventory — going room by room and documenting everything you own. As you're looking at each possession, take the opportunity to evaluate whether you still want it. Once you've completed the inventory, you'll not only have proof of your possessions — which, beyond its insurance purposes, will help you determine your net worth — but also a pile of items to sell, trade, donate, or give as presents. (Re-gifters aren't judged here in GRS-land.)
Ready, Set, Inventory!
Are you raring to see how much you really own, de-clutter your house, and make some cash? Here's how.
- Designate a place for the Stuff you no longer want. Clear some space in the garage or guest room where you'll put your trash that will become someone else's treasure.
- Choose a method and start inventorying. You have a few options when it comes to providing proof of your possessions. Perhaps the easiest is going from room to room with a video recorder, opening drawers, closets, cabinets, armoires, safes, floorboards, and false walls along the way. Another option: Use the Insurance Information Institute's online inventory tool at KnowYourStuff.org. Or just write it all down, using digital photos and receipts as evidence of ownership. Remember: As you're recording all your possessions, you're also identifying Stuff you no longer want.
- Note important information. Take video or photos or detailed notes to record identifying information such as brand, model, serial numbers, engravings, and unique attributes.
- Give special attention to expensive items. Consider getting a written appraisal for jewelry, family heirlooms, rare collectibles, and other pricey Stuff. Contact the American Society of Appraisers or the International Society of Appraisers to find an appraiser in your area. You also might want to take extra steps — such as buying a fire-resistant safe or renting a safe-deposit box — for these items. And make sure your insurance actually covers them. Some policies specifically exclude jewelry and other big-ticket items or only provide coverage up to a limited amount.
- Scatter copies of your inventory. Keep a few copies of your inventory outside your home, such as in a safe-deposit box or buried in your office desk. If your inventory is in a digital format, email it to yourself. If you use KnowYourStuff.org, the information is stored on secured servers that will be up and running even if your house is down and smoldering.
Turn Clutter Into Cash
Now that you've combed through your worldly possessions for things you no longer want to possess, you need to decide the best way to ditch them. Here are your options:
- Donate your Stuff. If you itemize your taxes, you can deduct the fair market value of items you donate to qualified organizations. Make sure you document what you're donating, get a receipt, and follow the rules — and there are many. For example, any donation of used clothing or household items that's more than $500 requires that you file Section A of IRS Form 8283. Consult IRS.gov for all the gory details.
- Hold a yard sale. This is the best option if you have a lot of Stuff of modest value. You won't get top dollar, but you will get rid of a lot of Stuff in a single morning, assuming you price it right and live near a lot of people.
- Sell items online. If you have items that will sell for $50 or more and you're willing to put in the time to list them online, websites like Craigslist or eBay or Amazon.com's Marketplace can help you find sellers miles — and even countries — away. Just make sure you take steps to protect yourself and your Stuff, such as using a payment service like PayPal or dealing only in cash. There are a lot of people in cyberspace trying to scam online buyers and sellers.
- Use a consignment store, auction house, or specialized seller. For unique and expensive items — such as rare collectibles, antiques, or jewelry — enlist a professional who knows the market and can help you get the most money.
Voilá! You've now documented your possessions, cleaned out your house, and maybe even made a buck or two. Congratulations!
J.D.'s note: More great stuff from Brokamp. It's as if he reached into my mind and plucked out a piece of my book. Your Money: The Missing Manual has material covering this subject, though it's spread out over a couple of chapters instead of compressed into one concise article like this. Photo by Phillip Stewart.