My apartment is driving me crazy. I feel like there are piles of clutter closing in on me. That's what happens to me when I finally have a week off from my primary job as well as my side gigs AND the holidays are happening at the same time. When I am working a ton, I put off "picking up" as much as I normally would. Then, I take some time off, and find myself irritated by the disaster I allowed myself to create. I also moved from a 1600 square foot house on the west coast, with my partner and cat, to a 1 bedroom, NYC apartment. We pared down, but there is still work to be done.
In addition to being a personal finance writer, I am a believer in The Law of Attraction. The basic idea that I am a powerful manifester of my own destiny appeals to me, and when I sit back and use my imagination to picture my ideal life, the one I am working to create, it always contains a lot less stuff than what I currently possess. The answer to the question I haven't bothered to ask seems obvious, doesn't it? Get rid of some of it!
Why don't I? Why don't many of us, just get RID of it!? Well, I am no psychologist, but if I were to dive into the rabbit hole of my own mind, I would say that it is some sort of fear or anxiety. I grew up pretty poor, and it taught me a lot of habits that I wouldn't trade for the world, but a few that I am working to get over. One of those habits in the "get over it" category is the feeling that I need to hold on to things. When money is tight, we teach ourselves to hold on to what we have because it will be hard to replace. As a result, it is really easy to get stuck in a trap of keeping things because I "might need it." Now, the truth is that I am not in that position any more. If I accidentally got rid of something and later found that I needed it, I CAN afford to replace it.
If I am holding on to possessions because I am fearful, than I am not behaving in a powerful way. If I am not powerful with my possessions, I am not powerful with my money.
That was really important. That's why I made it it's own paragraph. If it didn't sink in, read it again:
If I am not powerful with my possessions, I am not powerful with my money.
If I am going to be financially free, I must be powerful with my money. People that are powerful with their own money are very deliberate with their time, money, possessions, and other resources in general. With that being said, I need to be deliberate in creating the picture I see in my mind, the picture of my ideal life. By ridding myself of things that I am only keeping "in case," I am choosing to be powerful with my environment, my possessions, and my money. I am also making room for abundance, which I am also creating.
The last week of the year is the best time to "clean house" so to speak. Spring cleaning is fine, but I think the best time is now. This is the part where I step away from being so philosophical, and come back to some no-nonsense financial strategies..
If you haven't written a check to a charity yet this year, or have more to give, this is the time to do it, and have it count for this year's tax return, just get it done by December 31st (and get a receipt). This is also a brilliant time to clean house! Don't just clean up from the holiday chaos that may have erupted in your living room (as in mine), but go far deeper. It is time to start a RID project (Reduce Inventory Drastically)! Many of you can donate your unwanted items to a charity, and write the donation off on your taxes (if you itemize). For those of you who itemize, the
really simplified version of what happens is this:
Let's say you make $73,000 a year, and donate $6000 worth of stuff to a registered charity, your tax accountant will plug it into a formula (along with a bunch of other stuff) when they itemize your return, and it will reduce the amount of income Uncle Sam is going to tax you on. So, rather than taxing you on the full $73,000 maybe Uncle Sam will only be taxing you on $69,000 (remember, it's a formula, not a dollar for dollar thing). This can reduce your "tax bracket." You know, the percentage of taxes you are on the hook for.. Maybe you were sitting at 25% before, and get it down to 20% by reducing your taxable income.. You see, this percentage goes up and down along with your taxable income. When your taxable income goes up, so does the tax bracket. Donating to a charity can make these numbers go down. You can makes this happen by writing a check (some employers will actually match funds donated to a charity--ask your HR department if your company does this) or by donating some of your belongings.
I do itemize my taxes. So, this RID project of mine is going to do a number of things for me. It is going to help me to gain power with regards to my money, possessions, and environment. It is going to reduce my taxable income, and help me to save some money on my taxes. Finally, it is going to bring me much closer to the picture in my mind--the picture of my financially free life.
(Side note: You might want to take a picture of what you donated for your tax records, this will help with assessing the fair market value of the goods (which is what you receive credit for, not what you paid when you bought them), oh yeah and make sure you get a receipt for the donation. )