The inimitable comedian George Carlin had it right: "A house," he said, "is just a pile of stuff with a cover on it. ... That's what your house is, a place to keep your stuff while you go out and get...more stuff!" And as he noted, this leads us to wind up with too much stuff, necessitating a bigger house that can fit more stuff. It's a vicious, expensive, globally damaging cycle -- and Motley Fool Answers cohost Robert Brokamp learned just how much worse it has become in the years since Carlin first performed that routine, thanks to Alana Semuels' article in The Atlantic last month, "We Are All Accumulating Mountains of Things: How online shopping and cheap prices are turning Americans into hoarders."
In this segment, Brokamp and cohost Alison Southwick open with the first big question anyone should ask themselves regarding their shopping and clutter: Is this a problem for me? And the first diagnostic test on that score should be this: How are your retirement accounts, emergency fund, and other savings accounts looking? Because if you're not saving and investing enough, odds are, it's because you're spending too much.
A full transcript follows the video.
This video was recorded on Sept. 11, 2018.
Robert Brokamp: Let's start with No. 1. You would ask yourself, "Is this a problem for me?"
So first of all, let's address the whole savings question. If you're not saving enough for retirement, and if you don't have an emergency fund, and if you're not saving enough for your kids' college educations [whatever goal you have], then clearly looking at your spending is one place to start.
And as we've talked about on the show beforehand, rather than spending throughout the month and then seeing how much you have left over to save, you should reverse it. You should figure out, "This is how much I need to save every month to retire. I need to get that out of my checking account. Get it in my 401(k). Into my IRA. Do that and then just stick to whatever I have left over."
But even if you're saving enough for retirement and if you're generally OK, that doesn't necessarily mean you should go on spending sprees spending on stuff that you end up not valuing. So I think its valuable for everyone to, of course, look at their spending [whether it's your credit card statements, your bank statements, Mint or any other tool that you use] just to look and say, "OK, I bought this thing six months ago. Was that a good idea? Was that a good purchase?"
Take a look at what you have in your house. You have to look everywhere. Your closets, your drawers, your dressers. Your cabinets. Your car. Your garage. Look at all the stuff you have and if you do have a problem, or if there are ways you could improve your situation, you're going to see it, probably.
But I also thought you probably look at your stuff all the time and it doesn't occur to you. What if you imagined that we were looking at it all with you? If you were looking at it with the Answers team and you had to expose what you have to other people, is there anything you'd feel particularly guilty about or a little bit ashamed of?
Alison Southwick: What are you getting at, Bro?
Brokamp: Do you know where I really got this from? I was doing some research on hoarders... And one of the issues for hoarders is they get to a point where they're so ashamed of their hoard that when something goes wrong in their house, they don't call people to come fix it because they're too embarrassed. And then that reminded me [me being the good Catholic boy that I am] of reading a couple of times about "the bad side of Catholic guilt."
I remember reading a couple of articles and maybe even a sermon about, "There's an upside to guilt. It's often a marker of you realizing you're probably doing something you shouldn't do." So if you imagine that you would expose your spending to the rest of the world, you might feel like, "Oh, yeah. I'm kind of embarrassed by the number of shoes I have. The number of comic books I have." Whatever it is that you maybe should cut back on.
Southwick: This has been an episode of Better Living Through Public Shaming with Robert Brokamp.
Brokamp: Yes, there you go! But I think as you listen to this, if there is something you probably shouldn't be spending money on, it's probably occurring to you already. The question is what you should do about it, and that's the next part.
So what should you do if you do have a problem with spending?
First of all, just get it out of your bank account. Put it into other accounts so you can't spend it. Another thing is just to limit the amounts you could spend on discretionary stuff. Everyone should have a little bit of fun money. Just put that into a separate account. Have it only accessible by either cash or an ATM so you can't use a credit card for that. And you're allowed to spend that on whatever it is -- every month, every two months, every year -- but then once it's done, it's done. You can't spend any more on that.
If you do have a problem with online spending, or it's just something you'd like to limit, there are a couple of ways to handle that. First of all, every browser has a way to block websites and I've done this for situations where I know I'm visiting websites when I should be focusing on work. I've blocked Facebook...
Southwick: You are killing me in this episode!
Southwick: No, I just want to hear all about the websites that you're going to. That you feel guilty about going to.
Brokamp: No! N! No! All right. For example, there are some interesting things going on in politics right now and I was having trouble ignoring the political stuff and focusing on my work, so I blocked the typical news websites. It's easy to unblock them, so it's not like you permanently do it. But it is just a way to put that extra speed bump and say to yourself, "No. I need to focus on my work. I can look at the news later." You can do the same with any website that you go to buy things.
I also found this interesting thing. It only works for Chrome, but it's called Icebox. First of all, I should say it's based on a principle that Rick told us about. Rick, do you want to explain your principle about putting it into the cart first?
Rick Engdahl: So if you feel the urge to shop because, I don't know, you're hungry, or depressed, or whatever it is that makes you want to shop, you go through and you find all the things that you dream about and you put them in the cart, but you don't hit the "Buy" button and you just wait. You get all the satisfaction of doing the hunting around and finding things. You put them all in the cart and you get all happy about that. But then in the morning when you wake up, you'll look at all that stuff and say, "Oh, I'm glad I didn't buy all that stuff."
Yes, I have a cooling-off period. Now I have an Amazon cooling-off period where if I recognize that I'm just bored and throwing stuff into the cart, then I just leave it there and I come back 24 hours later [or whenever later] and then I'll be like, "Wait. Why did I want to buy bright yellow leggings? What was that about?"
Brokamp: Well, I found this extension for Chrome...
Engdahl: They look really nice, Alison!
Southwick: Well, it's a Halloween costume.
Brokamp: It'll be great!
Southwick: It will be great, because I make great Halloween costumes!
Brokamp: Yes, you do.
Southwick: So do you. And you.
Brokamp: Thank you! Anyway, so I found this extension for Chrome called "Put It On Ice." It basically replaces the "Buy" button on most popular e-commerce sites with a button that says, "Put It On Ice." So when you click on it, you put it in your Icebox and it's there for 30 days. Now you change that, but that's the default. And if you absolutely need to buy something, they have this workaround, and you have to put in a magic phrase; but again, it's just a speed bump. It's just a way to be like, "OK, I'm not going to buy immediately. I'm going to wait for a cooling-off time and then decide if I still want it."
The other big cause of problems for people are catalogs. People getting stuff in the mail. They read them and they order things. According to the NYU School of Law, 5.6 million tons of catalogs and other direct mail advertisements end up in U.S. landfills annually. 44% of junk mail gets thrown away immediately. So it's another environmental concern, but if you also have an issue with spending from stuff that comes in, the first thing to do, of course, is just cancel them. You can contact the provider directly, but there's also a website called CatalogChoice.org. where you can unsubscribe from all kinds of the most popular catalogs if that's an issue for you.
The holidays are coming up. It's always important to think about what you spent last year and maybe the previous year if you're doing a good job of providing stuff for your loved ones. Stuff that they value. When it comes to Christmas, of course, those of us with kids buy a lot of stuff.
I found this kind of interesting. According to Jeanne Arnold, who's an anthropology professor at UCLA and lead author of a book called Life at Home in the Twenty-First Century, the U.S. has 3.1% of the children, but consumes 40% of the toys in the world. So we buy our kids a lot of toys.
It was interesting. In a video she described her book along with some of her co-authors and how toys have spread throughout the house, now. It's not just like the toys are in the kids' room. Like they're everywhere.
Southwick: Yeah, they're everywhere.
Brokamp: So as the holidays come up, just think thoughtfully about what you're getting. Do you want to do experiences instead of stuff? Other things that you could spend your money on.
And then the No. 1 thing I think is a problem [and it's, perhaps, the most important, at least, for a financial website] is to appreciate how much spending less and saving more pays off over the long term. Assuming an 8% annual return, for every $1000 you cut from your budget and instead put into some sort of investment account, you'd have $2,200 after 10 years, $4,700 after 20 years, and $10,000 after 30 years. Of course, if you could cut a few thousand every year, each and every year, that adds up.
So especially for those who are behind in their savings, it's important to really think about how much you're giving up in the future by spending money today often on stuff that you don't value.
And then finally just what to do with all the stuff you already have. I don't really have anything revolutionary here. You basically have three choices: throw it away, sell it, or donate it.
For the sell it, of course, there are the normal options: yard sales, classified, Craigslist. I started coming up with this long list of specific websites for specific items and it just got too long. My basic advice is if you have something you want to sell like maybe a tuba, for example [Ross Anderson], just go to your favorite search engine and put, "Ways to Sell Used Blank" and you'll find websites, services, and things like that.
Of course, if it's just random stuff, go ahead and have the yard sale. But there's so many specialized services for specialized items and it varies where you live in the country. Just do a little research. But there are ways to recover a lot of the money that you spent on stuff that you no longer use.
As to donating it, I've mentioned Michigan State previously about all the stuff kids leave behind. They started a program where they now encourage kids to donate their stuff instead of throwing it away. This year they collected 900 pounds of personal care items and 4,000 pounds of non-perishable food items.
[Also from The Atlantic article], Pomona College in California has done this. First of all, they've noticed that the amount of packages being shipped to students has increased 325% in 12 years. All these kids are getting all these packages from Amazon that just didn't happen 10 or 20 years ago. But they also encourage kids to donate stuff at the end of the year rather than throw it all away and collected 42 tons of clothes, furniture, and office supplies.
Yes, it's amazing. Again, where you donate stuff is very specific to what you have and where you live. But just by doing a little research, you probably can find someone that can make good of something that you have.
And if you don't want to donate it, there are other ways to get rid of stuff to other people who might use it. For example, there's Freecycle, which is a website. You sign up for your local area and people post, "I have a lawnmower I no longer want," and people [who want it] will say, "I'll take it."
If you belong to some sort of neighborhood or community Facebook group [Nextdoor or anything like that]. Here at The Motley Fool we have a Slack channel called "Classifieds." People are often putting up stuff that they are either selling or giving away. Here at The Fool we've had Stuff Swaps for parents organized by the wonderful Kate Herman. I was talking to her earlier today. She said that we've done it about 4X, over the last eight years, and it's always been successful. And at the end, either parents of the stuff that no one takes can take it back or we donate it to someone who will use it.
So lots of ways if there's something you no longer like. Somehow someone else can make good use of it.
Let me close with a quote from Jeanne Arnold, the UCLA professor I mentioned earlier. She said this on a YouTube video that I watched. "One of the things we discovered and documented is that contemporary U.S. households have more possessions per household than any society in global history."
In many ways we're very fortunate to be living in the times that we are, and in the place where we are, but we might be even better off by changing the ways we expend our resources. So for the good of your personal finances and for the good of the planet, strongly consider how much stuff you really need.
Southwick: Want less.
Brokamp: Want less.