We have a cost of ownership problem in this country.
Let’s agree that the cost of living is a bigger issue, even if annual inflation fell to 7 percent in August, from 7.6 percent in July. But the cost of owning all the stuff we buy adds up to expenses that can easily run into hundreds of dollars a month for a household. Exhausted by your efforts to cut costs by buying less? It can help to get rid of some of what you already own.
The burden of owning a lot of stuff becomes apparent every time a vacant lot in your city is filled with storage units. Storage units are a growing business as families have too much stuff to keep at home.
Include my family in this group. We have a closet with some remnants of the downsizing my wife and I did a few years ago when we moved from our childhood home to an apartment. There’s a bag of hockey gear from one of our boys, some random camping and fishing gear, several file folders, and boxes of photos and mementos.
I keep planning a family gathering to come up with a strategy to get rid of the unit, but it hasn’t happened yet. I think maybe this weekend, unless I can find some easier problems to solve.
Our Ottawa suburban storage unit is a small one that costs just under $100 a month. Some Google searches have shown that medium and large units can run you as much as $300 to $400 or more per month, with units in large cities costing more than smaller ones. From experience I can report that the costs of a storage space regularly increase.
Emptying a large storage area is a big undertaking, so consider a two-step process. Reduce your interests enough to move to a medium or small unit first, then set a 12-month deadline to downsize further or remove the unit altogether.
Last spring, I set a goal to finish our storage space before the end of the summer. I hope you have more success with downsizing than I do.
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Rob’s Personal Financial Reading List
What Costco teaches us about inflation
A look at the threat inflation poses to household finances this fall, prompted by a trip to Costco to stock up on family necessities en masse.
Where we stand on iPhone prices
A global price comparison for iPhones shows that Canada is among the cheaper countries. That said, iPhone prices have gone up three times over the past 15 years.
Life, death and your partner
The Blunt Bean Counter blog about talking to your spouse about your estate plan. If you were to die, would your spouse have the necessary information about your financial assets? Is there a roadmap for dealing with estate planning matters?
The big layoff, a year later
Check in with five women in the United States who quit or planned to quit their jobs last fall. How did things go?
Q: Do I have to sell mutual funds in my tax-free savings account to pay off my mortgage?
A: This is the kind of question that is best addressed by a financial planner who can consider the many variables to be addressed here. Some questions to consider: What is the urgency of paying off the mortgage? Worried about higher payments on renewal because interest rates have risen? What return did you achieve in the TFSA and how does that compare to the rate on your mortgage? If you’re not happy with your mutual funds, what other investments can you look to to improve returns? Aside from the TFSA, what other investments do you have to meet your financial goals, including a comfortable retirement? In general, this is not a step to be taken without some analysis of your broader finances.
Do you have a question for me? Send it my way. Sorry I can’t answer everyone personally. Questions and answers have been edited for length and clarity.
Today’s financial calculator
Here’s the best calculator I’ve seen on the cost of raising kids. A must for new parents.
The cash-free zone
I love the serene atmosphere of this new song, Why Dub by the Soul Revivers.
From the Twitterverse
A fair tweet about bizarre investment claims involving cryptocurrency.
In case you missed these personal finance stories from Globe and Mail
More Rob Carrick and money cover
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