Yesterday, we talked about the value of decluttering and living with less. Today, I want to talk about a related topic — what to do with all the junk you’ve decided you no longer need.
Most of us probably just want to get rid of it as quickly and conveniently as possible, which usually involves either throwing it in the trash, taking it to the thrift store, or (if you’re from rural Alabama), leaving it by the side of the road for the neighbors to come pick through.
But is “just getting rid of it,” really the best financial decision? It’s certainly the fastest and easiest option to get your old stuff out of your house. But what if you could reclaim some amount of what you initially paid for the item?
One of Warren Buffett’s famous sayings is a good fit here:
Rule number one: never lose money.
Every dollar you can reclaim from something you’ve purchased is another dollar you can invest, pay down debt, or use for some other purpose.
A professor of mine was famous on campus for replacing his car every year. He was partial to fancy European cars, and would buy a used model two years older than the current model. 12 months later, he would sell the vehicle for almost the exact amount that he paid for it (and in some years, actually managed to profit from the sale of the vehicle). Then he would repeat the process.
Every year, he bought an almost new car, primarily funded by the sale of his last still-almost-new car.
In the rest of this article, we’ll talk about selling your old items, or getting tax deductions by donating them, so that you can reclaim some of the money you spent to acquire them.
In many cases, the actual dollars you earn from this will likely be small. But the point here isn’t to generate large amounts of cash. It’s simply to get you thinking like Warren Buffett, and to never lose money you don’t have to.
When To Sell
Selling a used item isn’t always easy. People tend to like new things, and many items depreciate rapidly in value. A computer that cost $800 a few years ago may be worth less than $50 now. The same is true of many other items, including phones, clothes, furniture (with a few exceptions), and many other products.
A good item to sell is one that is in great condition, from a recognizable or popular brand, and in high demand. My wife and I once sold a violin she had once played in college — we sold the item on Craigslist, and I had so many interested buyers, I wish I’d had six of them to sell.
Be careful of overpricing. Remember, many items depreciate rapidly. It doesn’t matter that you paid $200 for the item when it was brand new — if it’s used and more than a few weeks old, it’s worth significantly less. Asking too much for the item simply means it won’t sell. If that bothers you, try to take it as a reminder that pricy consumer goods don’t hold value and don’t make great investments.
So where can you sell? There’s always the old classic: hold a yard sale. This can be a great way to get rid of several items at one time, and it can be a fun way to meet the neighbors and expand your social circle. If you don’t think a yard sale would do well in your neighborhood, many communities have public marketplaces, where you can pay a small fee to rent a table or booth for a day to sell your wares.
The online world has plenty of options, too: Craigslist, Facebook buy-sell-trade groups, Ebay, Amazon Marketplace, and many others. Some of these options charge fees that can cut into your profits, though, so make sure you crunch the numbers and make sure it works out in your favor.
If you sell online, great pictures are VITAL. When taking photos of items to sell online, take your time. Get your lighting right, pick the right settings for your camera, make sure everything’s in focus, and take several photos so you can select the best ones that show off the item’s best features.
Consignment shops and secondhand media stores can be another good place to reclaim some costs. These have the benefit of being easy and quick, but they may only purchase certain types of items, and you’ll almost certainly be offered a lowball figure for the items you trade in. These types of businesses make their profit by buying items from you cheap and selling them at a substantial markup.
The advantage to selling your items, rather than giving them away, is that it provides an immediate benefit — you receive money from the buyer and can immediately put it to use.
Donate To Charity
If the items you have can be used by a registered non-profit, you can often receive a tax deduction for them. This is true of a surprising number of products, including things like cleaning supplies, used pet toys, computers, phones, video game systems, and even vehicles. It’s simply a matter of matching up the items you have to the charity or non-profit that can use them most.
If you have lots of cleaning supplies and pet goods, look for a humane society or other non-profit animal shelter. Used computers or video game systems are sometimes requested by children’s hospitals or youth outreach organizations. Computers, books, and other instructional aids can be used by non-profit schools. If you’re willing to do a little looking, giving your items to charities like this can be really rewarding: someone always needs what you can provide.
Making these kinds of donations is simple. Just call up the organization that you think could use the items you have, and ask if they need them. Sometimes it helps to ask for the donations or resource coordinator, if one exists.
Aside from donating directly to organizations, charity thrift stores are another great place to donate goods. These types of thrift stores generally use the proceeds from their sales to fund food, shelter, and medical care services for impoverished or homeless individuals. By donating to these thrift stores, you provide them with inventory, and you’ll receive a receipt for the value of your donated items; come tax time, that receipt is good for a deduction.
Just be sure to check out the thrift store and make sure they’re a genuine non-profit first. For-profit thrift stores or junk shops do exist, and you won’t receive a tax receipt for giving them your junk.
Make It A Habit
I find that giving your home a once-over every couple of months to see what you can get rid of is a great habit to develop. Most of us are constantly accumulating things, so a regular pattern of removing items helps maintain an equilibrium that can keep you from feeling overwhelmed by your stuff. Doing it regularly also means that you have the chance to try to sell recent regretful purchases before they depreciate too much to be worth it.
Tomorrow: Keep Rock Solid Records
Documenting your financial doings is such an important thing to do. It protects you in the event of a dispute, it ensures that you never accidentally miss a payment or deadline, and it gives you a record of information so you can get a clear picture of your financial situation. So tomorrow, we’re going to develop a record-keeping system to make sure we never miss a thing.
How do you reclaim spent money?
Do you ever sell old things, or donate them to charity? I want to hear what you do to reclaim money you’ve spent. Tell us in the comments!
Photo by Frank Hebbert.