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Streamline Your Finances and Make Your Life Easier By Not Hoarding

Published 8/26/08 (Modified 3/8/11)
By MoneyBlueBook

It's not too often that I get to travel overseas to visit my parents, but this time I had to. My dad's job is taking him on a new foreign assignment to another continent, one that might be less accessible, so I decided to make the effort to visit them sooner than later.

Ever since I reached my financial independence milestone and declared freedom from my parents, I've thrived in the openness of my own free will, taking fairly decent care of myself. It's been so long since I've had to live under my parents' shadow and watchful eagle eyes, so having to do so now, even for a few weeks has been rather difficult. I'm not the same little boy who used to depend on my parents' guidance and tutelage when I lived with them, so living with them now is taking some getting used to. Since we've lived so physically apart for numerous years due to the sheer oceanic distances that separate our jobs, I always feel like I need to get to know them again for the first time and get accustomed to their quirky living habits every time I see them. Even for the purposes of a relatively brief couple of weeks stay, I always find I learn something new about them that I didn't notice before (perhaps it's because I get to view them through a refreshed set of perspectives).

What Is Compulsive Hoarding and Why Does It Lead To Excess Clutter and Household Planning Inefficiency?

Having lived with my parents for a week now during my little visit, I've noticed something very interesting, but rather troubling - they exhibit the traits and qualities of obsessive compulsive hoarders, particularly my mom. This made me re-examine another member of my family - my brother. Only a few weeks ago I had helped my brother move into his new apartment and remarked on the piles of useless trash and excess clutter in his home. The signs and telltale indicators were all too readily apparent, I just hadn't noticed them before. Apparently, habitual hoarding is a trait that runs in the family.

For those not familiar with the concept or the terminology of hoarding, it's the practice of collecting, retaining, and stockpiling material possessions and household supplies to great excess, and the refusal to relinquish them despite common-sensical reasons to do so. This type of personality trait seems to affect a lot of older people in my non-professional opinion based on my own personal observations, but then again, I'm not a health expert. But I wouldn't be surprised if most people can readily cite their own aging parents or grandparents as active practitioners of hoarding. I wonder if it's because older people tend to be more old fashioned or more set in their ways, making them less open and amicable to adopting new ways of organizing and de-cluttering their lives through technology.

While most of us probably hoard basic household items to some degree by stockpiling today to take advantage of bulk wholesale prices in anticipation of future need, what separates us from pathological hoarders is the great degree to which they often take things. Obsessive compulsive or pathological hoarders tend to stockpile items that have little to no utility, or they obsess about collecting boxes and bags of possibly useful items but simply don't know when to stop.

My parents' apartment has huge stacks of brown storage boxes everywhere. While some of the boxes contain priceless family photo albums, expensive jewelry, or various family keepsakes, the vast majority contain pretty useless junk. While helping them pack for the job relocation, I stumbled across many sealed boxes and bags filled with old newspaper clippings, unused department store paper shopping bags, plastic twisty ties, huge containers of rubber bands,���� and enough office supply pens, pencils, construction paper, paper clips, and erasers to stock an Office Depot. The tremendous number of boxes are not neatly tucked away in storage closets, but rather, occupy multiple bedrooms to the brim, spilling out completely into the living room, dining room, and partially blocking most hallways and some entrances. You can't walk into their apartment without immediately noticing the huge stacks of boxes and newspapers everywhere. Some of the newspaper clippings and stacks date as far back as several years.

While I've pleaded with them to start throwing useless bags and boxes away that contain items with no foreseeable useful purpose, my parents refuse to budge, clinging onto the outdated notion that it would be terribly wasteful to throw away perfectly good supplies, while simultaneously extolling the virtues of saving, recycling, and not wasting money. Obsessive, old fashioned hoarders like my parents seem to find some irrational comfort or security in knowing that they have an endless supply of everything in the way of home office and home maintenance supplies should the need ever arrive. The problem with their faulty rationale is that as the supplies grow and the stockpiles of boxes and bags pile up, one inevitably starts to lose track of what one has in his or her inventory. My parents at this point have no idea what they have stored away in their massive stockpile of boxes, but yet, they continue to insist on drowning themselves in supplies and recyclables - useless junk in my opinion. After all, what's the point of keeping around hundreds of pens, rubber bands, staples, and scraps of computer paper if you can't even remember if you have them when you actually have a need? Despite the numerous boxes of department store and grocery shopping bags my mom already has and despite the fact fresh ones are very readily available from any retail location, she continues to collect them everyday, neatly folding them flat and storing them away, rationalizing by suggesting that they'll come in handy someday.

Thankfully, in the area of personal finance and family accounting, my parents' obsessive hoarding ways have not completely stifled their ability to manage their financial life properly. However, it has made it very difficult for them to keep track of their financial activities at times. Because of their old fashioned ways, my parents continue to retain paper copies of every conceivable document, receipt, and billing statement. My mom keeps huge filing cabinets filled to the absolute brim with almost every receipt and document she's ever come into contact with. She simply will not throw anything away, believing that every major purchase receipt needs to be kept for future reference (just in case). She keeps all of her papers neatly archived, despite the fact I highly doubt she ever looks at them anymore. They simply become excess clutter, causing gridlock to what could be an otherwise streamlined and efficient existence.

How To De-Clutter Your Life and Streamline Your Personal Finance By Going Electronic and Digital

Embracing the paperless, digital, and electronic revolution is the key to living an efficient and orderly life in this day and age. It's time to do away with paper documents, paper receipts, and old fashioned outdated ways of keeping important documents and tracking your finances. While some paper documents ought to be retained - such as birth certificates, passport documentation, and car titles, the vast majority of files and papers should be digitalized and electronically organized. Here are some of the best ways to clean up your household and arrange your financial life to make it more efficient and systemized.

1) Stop Buying Crap and Stop Hoarding Useless Junk - I'm not a big fan of collecting things that cannot be construed as art. For those of you who collect material articles like shoes and purses, I don't get it. Will you really put those hundreds of purses, hand bags, basketball shoes, or hats to use, or will they end up at the bottom of some dresser drawer someday, lost and forgotten? At the very least, if you insist on shopping and buying lots of stuff, learn to adopt healthy habits to de-clutter your life. Here are some basic tips to help you keep your home, office, and sanity organized when it comes to material possessions:

  • Stop Using the "I'll Use It Someday" Excuse - Trust me, you're not going to use it someday. More likely than not, you'll eventually forget you have it in the first place and wind up buying it again. Unless it's something that's rapidly consumed in most households like toilet paper, napkins, and certain things like canned foods, there's no sense hoarding or stockpiling. Don't buy more than you'll need at this very moment. Yes, there's a slim chance you may need it a year from now, but chances are, your taste or needs may very well change during that period of time.
  • Stop Holding Onto Nostalgia and the Past - Unless it's something like photos, baby video tapes and DVD's, or priceless family heirlooms, there's no sense clutching onto useless clutter like old clothing or broken items you plan on fixing someday. I'm sure you have fond memories of that old wacky T-shirt or sweater from childhood, but unless you plan to wear them again sometime in the very near future, it's definitely time to get rid of them. Learn to share the wealth by giving things away - it'll make you feel all warm and fuzzy inside for having performed something altruistic and beneficial for society. For those of you with boxes and crates filled with old, but still wearable clothing in decent condition, try donating them to a charitable organization like the Salvation Army - you may be able to receive a charitable tax deduction for clothing donations. As for holding onto broken electronic gadgets like busted stereo systems hoping to fix them someday, like my mild hoarder of a brother is currently doing, learn to let them go as well. You're not going to find time to fix it, and chances are it's just taking up valuable space and pointlessly occupying your mind and thoughts in the meantime.
  • Learn To Throw Things Away As You Buy New Ones - Some call it the "in out rule", but basically, as you purchase new items, learn to throw away the old versions they replaced. If you buy a new pair of shoe to replace some old, worn out pair, feel free to keep a pair or two for dirty activities like painting or yard work, but please don't keep every single old, worn out shoe you've ever owned. Throw them out or give them new life by donating them away.

2) Understand The Importance Of Going Paperless - Compared to electronic transactions and digital archiving, paper is a terribly inefficient and clutter-prone way to transact business and maintain an organized financial life. Paper products and paper documents have a way of adding up and compounding quickly. By their very nature, they are very heavy and sometimes difficult to keep categorized and stored in a way that is easy to access again. The goal is to get used to the idea that paper is the enemy. Ideally you want to go the way of a paperless office and keep all documents and accounts in electronic and digital form, accessible with a computer. These days, almost all online bank and credit card issuers offer the option to view billing statements online and the choice to opt out of paper bills and transactions through the mail.

If you have an important purchase receipt that you are retaining because you want to protect yourself in the event you need to return the product, by all means do so, but after the lapse of the return period, instead of keeping the receipt for all time, why not use your digital camera to snap a photo image to store away on your computer, or use a digital scanner to convert the paper receipt into an electronic PDF or JPEG image file? I use my scanner and digital camera all the time to keep digital copies of important documents like speeding tickets, paperwork for computer purchases, and certain old school papers and essays for future reference. I organize them into neatly labeled computer desktop folders under My Documents instead of keeping them piled into cumbersome brown boxes or filing cabinets. Currently, because I've converted most of my paper documents into computerized digital format, all of the remaining important paperwork I possess easily fit into a single standard size box container, enabling me to have an extremely clutter-free workspace.

3) Switch To Online Banking - If you are not yet banking online, it is time to do so. While concerns about recent online banks going bust and FDIC insurance coverage are legitimate, and worries about bank identity theft, and online scams are very real, they are manageable and easily mitigated with some common sense. I've been banking electronically since 1998 - and things likes ACH transfers, automatic debit payments, and online bill pays are all second nature to me now. Like all new technology and new methods, it takes some getting used to, but the learning curve is reasonable and not prohibitively steep.

Online banking allows you to access your money faster and monitor your personal finance with 24 hour precision and real time accuracy, instead of relying on old fashioned paper based checkbook balancing. If you don't already have one, it's time to open up an online checking and high yield savings account, and start getting the hang of online banking account management. If you have accounts with multiple banks, discount brokers, and credit cards, you may want to consider managing them with an online account aggregator service like Yodlee or Mint. I personally use Fidelity Full View, which is powered by Yodlee's account consolidation service, to visually follow my financial account balances on a daily basis. Plus, it's nice to know where you stand at all times and it's great for budgeting purposes.

4) Start Using Credit Cards and Learn To Manage Them Responsibly - I'm a proponent of credit card usage. It's certainly not for everyone, but I think it's ultimately the best way to spend money and track expenses. Not only do credit cards offer all sorts of unique usage perks like extended credit card warranties, credit card protection against bankruptcy loss, free credit scores, and all types of free airline miles and cash back credit card rewards, all of your transactions are archived into your online account, sorted, and displayed into easy to understand purchase categories for practical management.

Instead of having to dig through piles and mounds of accumulated cash purchase receipts stuffed into folders, filing cabinets, or boxes, I rely heavily on my online credit card accounts to trace, track, and fine tune my purchase habits to fit my budget. Because I use my credit cards to buy almost everything (even for onetime $1 packs of gum), I can always calculate my usage for any given time frame and type of spending - like how much gas I spent this month, or how much I spent eating out at restaurants for example. Of course, I want to strongly emphasize a caveat - credit card usage is not very everyone and some people, due to their uncontrollable shopping habits and irresponsible use of credit, have no business even touching credit cards. However, for the vast majority of consumers, they're invaluable and powerful tools to have.

5) Stop Using Cash If You Can Help It - Yes you heard me right - stop using cash and learn to use credit or debit cards responsibly from the start. Unless you're admittedly irresponsible with credit, have a history of credit related troubles, or are simply too immature or financially ill informed to handle revolving debt, it may be time to wean yourself from a cash only lifestyle. For those of you who have had issues with unpaid credit card debt or have a knack for engaging in shopping trips gone wild, you might want to stick with cash only for now. For everyone else, please consider the benefits of credit usage and the downsides of cash. Cash is inherently dirty to handle as it's often touched and handled by all sorts of people. There's a reason why our moms always tell us not to put our fingers into our mouths after handling money - cash is incredibly filthy.

For those looking to streamline their finances and promote a clutter free household and office space, a credit card is immensely better at accomplishing that than compared to cash. Cash usage has a knack for creating massive amounts of loose change. Unless you can get in the habit of quickly exchanging those loose coins for consolidated and larger sums of money at free coin counting locations like Coinstar, you might wind up with loose coins all over the place - on kitchen counters, inside sofa cushions, and randomly stashed away in bedroom drawers and forgotten piggy banks - losing precious interest earning income in the process.

Meanwhile, credit cards are not only hygienically cleaner than cash, they are also inherently more streamlined and much more amicable to online and electronic expenditure tracking, resulting in no residual coinage trash like cash does. Not only can the wise use of credit cards help you improve important financial factors like your credit score, but the savvy use of card benefits such as balance transfer periods can also help you weather difficult but temporary financial emergencies without the need to seek out additional loans from banks or resort to something as potentially destructive as loan sharking payday loans. If you can handle the responsibility of using and managing card based payments, they are certainly the way to go in my opinion. Credit cards and bank cards are integral components of how I streamline my paperless life and how I effectively manage my personal finances.

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8 Responses to “Streamline Your Finances and Make Your Life Easier By Not Hoarding” 

  1. Mrs. Micah says:

    I'm nowhere near clutter free, but I've learned a lot about not hoarding from my grandmother. Who hoards. So bank statements from 3 years ago get shredded. I just cleaned out a bunch of clothes I never wear. I don't want to be her, arguing that a children's mystery from the 30s is worth saving because someone might want to read it. Or a bank statement from 10 years ago.

  2. Raymond says:

    Mrs. Micah, that definitely reminds me of my parents and grandparents...lots of interesting excuses for keeping around old nostalgic items and long expired billing statements way past their usefulness.

    My philosophy is - if you can't use it right away or give a very compelling and concrete example of how a particular item can be used or appreciated within the next few months or years, it definitely deserves to be thrown away to free up space

  3. Dan the Man says:

    Thanks for this article. For some, it can be dififcult to get out of the habit of using paper-based financial records. But I have to agree that electronic records are much more conventient and tidy. I like the idea of using a digital camera to convert a paper record to electronic -- that's handy for those who may not have a scanner.

    Besides the electronic financial records, I also use Quicken software. It's a very easy program that uses the familiar checkbook register. One feature that I have really, really learned to love is the attachment feature. For any transaction in the checkbook, you can attach a file. That's very handy to attach a PDF or JPG file with an image of the actual reciept or bill. As your looking at your Quicken register, it literally is a single click to view the details behind that transaction. That for me is the single biggest feature they added in the 2007 (and newer) versions.

  4. Patrick says:

    This was me some time ago. Not quite that bad, but going down that path. I think my problem was equating things with wealth, when that is clearly not the case. I'm not quite as clutter free and as efficient as I would like, but major changes like this don't happen overnight - particularly streamlining and organizing files and documents. My goal is to go all digital as well. I think that is the best way.

    As for convincing others to make these changes... I'm not sure it's possible. You can make suggestions, but this is something that people need to realize on their own. Without the self-realization, they will not be willing to change.

  5. DaveL says:

    A personal theory is that some older (70+) people hoard because they remember the Great Depression, either from personal experience or from their parent's stories.

  6. Dom says:

    Very funny. I agree with just about everything you have written. Since 2001, I have been using credit cards for everything and paying off the balance. The benefit of credit card use is I get cash back, my use is much easier to track, and if I mess up, I won't have $50 minimum in bank charges. Also what I do is open 0% cards, fill the card up and save the rest while putting my savings and earning interest. At the end of the year term, I pay off the credit card and end up earning a fairly good amount of interest.

    Online banking is also great because I get free bill pay, no fees, and 3.0% interest. Very funny that there is someone else with the same strategy as me.....

  7. Structured Settlement Guy says:

    I have found having kids really ratchets everything up a notch! Great post.

  8. Bill says:

    I can't speak from any personal experience with hoarding and frankly don't know anyone who hoards but I have to respectfully disagree with your fourth and fifth point.

    Credit is currently the most marketed product in the US and the vast majority of Americans have a proven track record of mismanaging it. While you seem to be one of the small majority for whom credit cards have been a blessing, to most consumers they are a curse.

    A dirty little secret that credit card providers don't like talking about is that consumers spend more when paying by credit card than when they hand over hard earned cash. Consumers don't feel the pinch of counting out each and every dollar when they swipe a credit card.

    To the contrary, I would recommend that Americans put the credit cards away and spend cash as often as warranted, and don't believe the hype that swiping a credit card will speed your transaction at the checkout counter. In fact, just put the credit card back in your wallet and step away from the plasma screen!

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