What I Learned By Donating And Giving Away Nearly All Of My Stuff

When we sold our house and moved into an RV, we had to give away a ton of our stuff so that we could start living minimally in a smaller space. We gave away a lot of stuff to family members, had neighbors come by and take whatever they wanted, we had Salvation Army come to our home to do a big pickup, and more. We didn’t sell a single thing, instead we gave it all away.

One year ago, we gave away all of our stuff, moved into an RV, and start living minimally. Here's what I've learned by living with less stuff.

One year ago, we gave away all of our stuff, moved into an RV, and start living minimally. Here's what I've learned by living with less stuff.And, it felt great.

Now, we live in a 33 foot RV and are definitely living a minimal lifestyle.

We aren’t the norm, though.

The size of the average home in 1950 was less than 1,000 square feet. Fast forward to 2013, the average home size has increased to nearly 2,600 square feet (according to the U.S. Census Bureau).

We were fairly close to that size when we owned a house. The house we owned in the St. Louis, Missouri area was around 2,500 square feet, if you included our finished basement, and it was just for myself, my husband, and our two dogs. Our home in Colorado was almost as big, at slightly over 2,000 square feet (with no basement).

However, we decided to buck the norm and started living minimally by completely downsizing our life.

This isn’t to say that we are perfect, though. I used to keep pretty much everything I came across, and my basement was proof of that. I would always say “Oh, but I’ll use that eventually!”

And then, eventually would never come, haha!

All the clutter and everything else that went with keeping everything you’ve ever bought can get annoying.

We made the decision to start living with less stuff for many reasons, but the main reason was that traveling nearly full-time added to the stress of owning a home. So, we figured why not just take it a step further and actually travel full-time?

All of the belongings we have are now inside the RV, except for a few childhood items and photo albums that my dad left me after he passed away. Those are all stored at a family member’s home.

Now, life is great.

Living minimally has been great, and I’ve learned a lot by giving away nearly all of my belongings.

Below is what I’ve learned by living with less stuff and living minimally.

I have wasted a lot of money in my life.

Okay, so this is probably a given. If I was able to give away nearly everything I’ve ever bought, that means that I’ve probably wasted thousands of dollars in my lifetime.

Knowing this has really helped me understand how to manage my money better.

Now that I realize how much money I’ve wasted, I am much more able to say “no” at the store when debating whether or not I should get something. I now realize that I don’t really need much, and this helps me to only buy what I need instead of things that will just create clutter.

I can also walk into a store and only buy exactly what I need, even if that store is Target!

I have so much more control over my spending and that has saved me a lot of money in the past year.

Related:

I don’t need a lot of the things that I once thought I needed.

I kept a lot of things because I thought I needed them for the future. On a regular basis, I probably only used around 25% of the things I had in my house.

Actually, probably even less than that.

I know I’m not alone – many people keep items because they think they may need them in the future. You know the feeling – you buy something, don’t use it right away, and years later you find it but just can’t throw it away in case there is some circumstance where you need that exact item.

If this is you, then you should put a timeline of no more than one year on the item. If you don’t use it in that timeframe, then there’s a big chance that you’ll never need it.

Chances are that you won’t miss it much.

When I think about how much stuff we gave away, I honestly can’t even remember half of the things. Now, I know that I never really needed the majority of those things.

Owning more stuff doesn’t make you happier.

Having more stuff doesn’t make you happier.

It’s really that simple. Things don’t make you a better person, they don’t make you more successful than others, or anything else.

I know this because I have less stuff than I have ever had, and I am happier than ever.

You should only own something if you truly want it. Who cares about what everyone else has!

Giving away nearly everything feels great.

Sure, this blog is all about making and saving money, and I could have easily sold a lot of the things that I gave away for thousands of dollars.

However, it felt great giving it all away, and honestly, it was a lot easier.

If I had to do it again, I would do it all over again.

Life is much more peaceful living with less stuff.

Getting rid of so much stuff has made life much more peaceful. Hanging on to so much stuff for years and years can add an insane amount of clutter to a person’s life, both physically and mentally.

I know this personally because I kept many things, such as clothing, because they were things I held onto after my dad passed away. I kept outfits that I wore the last time I saw him, from his funeral, and so on.

It just wasn’t healthy.

By getting rid of things, I was able to finally let go. Hanging onto those things and looking at them every day wasn’t healthy.

It’s easy to start living minimally.

As you can see from the above, living minimally has a ton of positives. One last positive is that it’s very easy to do.

Many people think that living minimally would be difficult because you have to get rid of so much stuff, change your mindset, and more. However, it’s been a very easy change for us.

Having less stuff and spending less money on things we don’t need allows us to spend more time on things we care about and actually want to do. Plus, now we hardly ever have anything break because there aren’t many things in our life that can be broken.

We don’t miss anything, we don’t feel like we need anything – we are happier and much more carefree now by living with less stuff.

Are you interested in living minimally? Why or why not?

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Source: makingsenseofcents.com

Mint Money Audit: Managing Money When You Make Enough

Anna’s email requesting help with her finances began with a unique confession.

“Farnoosh, my money problem garners little sympathy,” the 32-year-old wrote. “My issue is that I make too much of it.”

Now, THIS is interesting, I thought. I immediately followed up with many questions.

Here’s what I learned through our conversation:

The Denver-based Mint user earns $220,000 per year as an engineer. Anna’s also benefited from years of big bonuses and her net worth, not including her home equity, is close to a million dollars.

After paying taxes and health benefits and maxing out her 401(k), Anna takes home between $8,000 and $10,000 each month. Her expenses mainly consist of a $1,200 mortgage payment, car insurance, gas, food and utilities, amounting to maybe a few thousand dollars per month.

The rest either goes into savings where she stashes about $5,000 to $10,000 for unexpected expenses or into a brokerage account where she has roughly $800,000 invested. A wealth management firm manages that portfolio and charges, she says, an annual 1% fee.

Anna has no consumer debt, besides her mortgage, which amounts to about $338,000. It’s a 30-year fixed rate loan with a 2.85% interest rate. The home has appreciated in recent years with about $100,000 in equity (including Anna’s initial 20% down payment).

So, what is the problem, exactly?

“My big worry is that I don’t have the habits to manage money well,” Anna told me. Her sizeable bank balance has her feeling financially free, although she worries about getting carried away with spending sometimes.

“When I see money in my bank account I rationalize that ‘yea, that vacation is doable. I don’t hold back on the things that may seem frivolous,’” she says. But It seems she wants more financial grounding and to be able to evaluate expenditures and price tags more critically.

Anna’s situation may be unique, but I think relatable in the sense that we all would like to feel more thoughtful with how we spend, save and invest. And while some may do well with earning money, it should not be assumed that they can also manage that money well.

I applaud Anna for wanting to be sure that, even with an impressive net worth, she is actually making wise financial decisions.

Here’s my advice.

Take a Deep Breath

No need to panic when spending on things and experiences that you enjoy. From what I can tell Anna’s prioritizing the serious financial stuff first like contributing the max to her 401(k) and saving all of her annual bonuses in a brokerage account. She has no credit card debt and pays all her bills on time. That’s terrific.

Sometimes we just want to hear that we’re on the right track with our money and I have a very simple way to measure this:

If you manage each paycheck by saving, investing and paying all your bills first, then by all means, you’re entitled to have fun with whatever is left without any fear or regret. Am I right?

If you’ve done the good work of taking care of your future with your money, then don’t hesitate treating yourself and others with the remaining funds today. Splurge away and enjoy your hard-earned money. And remember to enjoy the moment.

Ditch Your Money Managers

I do think Anna could find a better home for her investments.

Paying one percent of her managed assets to this firm may not seem that high of an annual fee. But when you think about Anna’s balance of $800,000, that’s $8,000 this year. What about next year and the decades after that as she contributes more to the account? That fee, compounded over the next 30 years, will amount to – conservatively – over one million dollars. Ouch.

That doesn’t even factor in the expense ratios for each mutual fund that’s in her portfolio.

If all Anna seeks is investment assistance, she may be better suited stationing her money with an automated wealth platform or robo-advisor where her money is largely invested in low-fee index funds or exchange-traded funds (ETF) and the portfolio management fee is typically 0.50% or less.

Of course, breaking up with your financial advisor is not always so simple. It’s especially hard for Anna, as she equated her money managers to “father figures.”

If I were Anna, I would just explain to my advisors over email something like, “I want be more conservative with my money and that includes being extra mindful of the various fees that I’m paying. To that end, I’ve decided to manage my money more independently. I’m sure you can understand. I appreciate your help over the years. Please let me know next steps.”

Planners know the drill and are used to having clients end relationships.  Stay strong. Nobody can really argue with the fact that saving money is a good thing!

Establish Short and Long Term Goals

Anna wants to spend and save with more conviction. I think having some concrete, tangible goals can help.

For example, she shared that she’d like to get married, have a family and own two homes – one near her office downtown and another in the mountains as a getaway.

So, the next step is to understand what these goals cost. What are, say, the going prices on a vacation home in her state? How much might she want to stash in a separate account for the future down payment on this property? Knowing the underlying costs of her goals can better direct how much to spend elsewhere.

Next time she’s planning a vacation, she may be more inclined to price compare or hunt down better deals, as opposed to just judge whether the trip is financially “doable” by the amount of money in her bank account. Now she’ll have the image of that second home and its costs and will make a more informed choice.

Contribute to a Cause

Last but not least, when you feel you make more than enough, like Anna does, this is a great opportunity to be extra charitable. If she’s seeking a way to give her money more meaning and feel purposeful in her financial life, this is a truly wonderful way to go about it. Discover a cause that you’re passionate about and make an impact as a volunteer and donor.

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at farnoosh@farnoosh.tv (please note “Mint Blog” in the subject line).

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

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Source: mint.intuit.com