Improve Your Financial Situation by Decluttering
Since many of you will be moving at the end of June / early July, now is the time to start paring down your belongings and figuring out what means enough to you that it’s worth hauling to a new place. Most of the advice out there says you should go through your place room by room and separate everything in to one of three piles – keep, trash, or donate/sell.
Keep
The keep pile is pretty self explanatory. These are the things that you use everyday or help you somehow better your life on a frequent basis. For example, pots and pans that let you cook or your laptop you use for your entertainment. These aren’t really needs, but they help you out every day. Your ice skates you’ve been toting around for the past 6 years and have only used once or twice? Maybe they’re better off in one of the other two categories and you can pay the $5 to rent a pair next time. You get the idea.
Trash
Trashing things is hard, but do you really need that stack of CDs you burned in undergrad that you still have the MP3s of? Recycle what you can (Check earth911.org for a list of what and where to recycle near you), but get rid of the junk somehow! If it’s sentamental, take a picture of the object or scan it as a pdf if it’s a note or card. Ask yourself if keeping the physical object is really necessary.
Donate / Sell
On to the true point behind the post! While the other two categories of goods are important, this one has the opportunity to bring in some income or reduce your taxes. So you’ve gotten rid of the junk and know what you want to keep – what do you do with the stuff that still has value, like those ice skates? You have two choices – donate the item to charity or sell it to someone who sees more value in the object than you do.
Selling Your Stuff Online
There are many ways to sell your old items – here are a few ranked by level of effort on your part.
- eBay – The quintessential way to get rid of your old stuff, but it also takes the most effort. You’ll have to take pictures of your items, write up descriptions, and post them to the site. Then you have to deal with PayPal fees and eBay fees. For all this effort, you’ll be rewarded with the most eyes on your item. eBay is great for electronics and computer items – small, expensive things that aren’t too difficult to ship.
- Craigslist – The famous bulletin board site where you can post your stuff for sale in your local area. It’s great for larger items and you usually have the buyers pick things up from you so you don’t have to worry about shipping or delivering the item. You can also get pretty decent prices, as well. You do have to write up your own desciptions and you’ll get more interest if you have pictures, so throw those in, too.
- Half.com – An eBay subsidiary that is great for getting rid of old books, movies, and music. I bought and sold quite a few books during my undergrad and MBA days through this site. You just search by ISBN or title to find your item, then write a quick one or two line description, set your price, and you’re done. It’s really easy and payment is handled by Half.com, so you don’t have to worry about not getting paid. Just ship your item according to the seller’s wishes and you’re good (ship media mail for the lowest price).
- Amazon Marketplace – Ever notice that when you’re shopping on Amazon.com, you can purcahse used stuff for cheaper? Well, here’s your chance to sell your used stuff! Similar to Half.com, it’s very easy to post your items as Amazon already has the product described for you – you just write up a description and set a price. Great for media (books, music, and movies).
Donating Your Stuff to Charity
Wherever you are in the country, there are many great local charities willing to take your donations and either use them directly or sell them and use the cash to benefit their cause. Ask around about local charities that will probably provide the best benefit for your local community. Nationwide charities that accept your household goods for donation include:
- Goodwill – Accepts most items, some take computer equipment and some don’t so call ahead. You will probably have to drive the items to a local Goodwill shop yourself to make the donation.
- AmVets – Accept many items and have stores across the country. They may also come pick up your items if you don’t want to drive them to a shop yourself.
- Salvation Army – Another well known charity that accepts most items and many areas have a pick up service as well.
There are several tax benefits when donating items to charity, but first a restriction:
- Clothing and household items must be in good used condition or better. Good used condition is determined by you, but be reasonable – if you wouldn’t give it to a friend, it probably won’t sell at a thrift store.
When you make your donation, keep track of the mileage it takes to get to the donation spot and back in your mileage log along with the date, the purpose of the trip, and start/stop odometer readings. The current deductible rate is 14 cents/mile – you won’t get rich, but it’ll add up!
Probably the most important thing to remember, as with all tax related matters, is good record keeping. You’ll need to keep track of everything you donate in order to maximize your deduction. Also, take a photo of the items so you’ll have a record if the IRS questions the donation.
As far as itemizing and assigning values to the stuff you donate, you have several options:
- Spreadsheet – Most available option. To value your goods, look around the thrift store when you make your donation for similar items and use that asking price as your value. Otherwise, use completed eBay auctions or some other method to value your items and keep a screen shot to prove the value.
- DeductionPro – In the past, I’ve used H&R Block’s DeductionPro, but it’s kind of clunky and the values don’t seem to up to date. It does integrate with their tax software which is really nice. If you Google around a bit, you can find the 2007 version for free online.
- ItsDeductible Online – Intuit’s (the Quicken people) alternative to DeductionPro. It’s online, though, which is nice because you don’t have to install anything on your PC and you can access it from anywhere. It integrates with their tax software, so if you’re a TurboTax user, you’re in luck. The values seem more realistic with this tool and adding items is easier thanks to the better organization and search features. They don’t have an easy way to print your deductions along with the values because they expect you to buy TurboTax to get that info. You can, however, print the web page list of items and values, so that’s just as good – just not as pretty. I just printed this list to a pdf and put it in a folder on my PC along with pictures of the donated items for an easy, free solution.
So there you have it – a lot of ways for you to declutter your life and benefit financially when doing so!
Tags: charity, decluttering, moving, Taxes
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