Funding your Fund

December 1, 2009

So you are ready to start funding your replacement fund. Now what?

Finding Items to Shed
Here are a few ways to surface and identify items that you can sell.

1. Inventory Your Emotional Baggage
What item would you never dream of selling? Are you held back by emotional reasons? What are these emotions costing you? Now of course there are things worth keeping simply for emotional sake, but what if it is something you know you will never actually use again? Can you justify having this item take up space in your life? Maybe you can, maybe you can’t.

One way to let go, is to take a photo of the item with sentimental value. Take 10 photos if that helps. Save the photos somewhere safe, and shed that item. Next time you feel like bringing back those memories, view the photos. You will find you get nearly the same emotional reaction to a set of photos, as the actual item. Not to mention, photos are a lot easier to organize, backup and save!

2. Create a Maybe Box
Not sure you can do without something? Try designating a box or drawer (or spare closet) where you “quarantine” these items from everyday life. Whatever is left after after a time frame  (30 days, 60 days, 6 months.. it’s your call) deserves to hit the road. We use rubber-made bin (a closet at first) to test theses items. Whatever is left over doesn’t earn a spot in our life, and gets donated, or sold.

3. Keep an Idea List
Chances are you can’t think of too many items you don’t use much simply because you don’t use them much! As you think of or see items in your daily routine write them down. Chances are once you think you sold every last possible item more will show up. It’s funny how that seems to work. It’s simply because they are out of sight and out of mind in most cases.

4. Ask Your Friends and Family
There is nothing better than an objective point of you. Chances are this stuff is a part of your life and you have adjusted to seeing or having it in your life. Ask someone else that will honesty tell you their thoughts on your extra baggage. Don’t get defensive, just get busy. After all they are just giving you feedback on your stuff, not on your life.

Shedding Your Stuff
Give yourself a fighting chance and set yourself up for success, so start with the expensive items and easy ones to sell. Get some positive momentum going and sell your easy items first. Don’t save them for last…or you may never make it.

Price Like You are Serious
This is important. Remember value is not what it’s worth to you, but rather what it’s worth to the buyer that matters. So the goal here is to sell these items quickly. You’ll get burnt out in no time if you start trying to sqeeze every last penny out of all your items.

Yes, you may be leaving some money on the table, but look at the long haul. You will be shedding many items and you have a limited amout of time, so save your energy for later and price your items to sell!

Research the Market
Don’t guess. Find similar items that actually sold and price your item under that. The goal here again is not to maximize your dollar and play around with potential buyers, the goal is to actually move your items. Find what’s selling and what’s not before you spend any of your time.

Have an item with no vaule or not sell-able? Donate and get a receipt for your tax returns. Get rid of it and take the easy deduction.

Get Started and Stop Planning
Start with one item a week. It’s not going to happen overnight. Pace yourself, but get going.

Next post on actually selling your stuff!

Talking point: What is preventing or has prevented you from selling something? How did you overcome this?


What is a Replacement Fund?

November 30, 2009

My wife and I started developing the replacement fund idea right before we started packing for our last move. As do many couples, we seemed to have a lot of things, that we either didn’t use, or only used a handful of times. As we started to pack we starting dreading packing, moving and unpacking all these things we rarely even used. We wondered why we had all this “stuff”.

Now let me just say, we live lightly. Most of our friends and family have far more “things” in their lives. My point? If we can benefit from using a replacement fund, there is no doubt most Americans could!

The replacement fund idea: Sell or shed all belongings you don’t have an immediate need for. Take the funds you raise doing this and save them in a separate “replacement fund”. If you ever actually do have the need to use these items, purchase them using these funds! The basic theory is you won’t use all the “things” you think you might. Save the remainder, and use it for things you do actually need.

A quick note for those who like to be prepared. This doesn’t mean you need to shed your emergency supply of water, or 5 gallons of gasoline. It doesn’t mean you should be unprepared. We are simply talking about things that are not survival items, but rather everyday consumer electronics, books, and other non-life threating items.

The benefits:

  • You will be keeping less things (save on storage, live a less cluttered life, can buy a smaller home etc.)
  • You will be left with only things that you rely on and use frequently
  • You will have funds set aside, for when you actually do need to buy something or “replace” something
  • You will make interest on your “replacement funds”
  • You may possibly need less homeowners/renters insurance
  • You can more easily take care of the fewer items you do have
  • You will view your possessions with a new perspective. “Would I rather have $30 or this old iPod we used once last year?”

You will be surprised how many things you have around that are just sitting there. First go with your large items (furniture, cars, tools). Once you get the hang of it you can move on to the smaller stuff (books, DVDs, electronics) Below are a few (of the many) items that we ended up selling rather than packing.

At this very moment, we have a little less than $2,000 sitting in our replacement fund, and we don’t miss a thing!

  • Portable DVD Player (My wife’s new laptop does the job better!) (Sold for $80
  • Waffler Maker we used once in the last 3 years ($25 Craigslist)
  • Old Laptop in the closet, given to us a few years ago($80 ebay)
  • Ti-89 Graphing Calculator from my high school days! ($75 ebay)
  • Many more items! (Old CD’s, DVD’s, Books I never would read again etc)

You can see it adds up quicker than you would expect. After a month or so of liquidating our extra stuff, we started to look at our possessions with a different perspective. Is that $30 calculator getting enough use to justify not selling it? If “your item” was a $20 dollar bill would you just leave it there in the drawer? Or would you rather have it in your “replacement fund”?

Now you skeptics are thinking, that sounds like a lot of work. But How? How do we sell our things? Doesn’t this take a lot of time? What if I sell something that I end up needing? I like my stuff, and dont want to part with it…

Next: How to Determine What to Shed?

Talking Point: Can you think of anything you have, that you may not use ever again?  Would you rather have a nice collection of stuff you might use, or a nice collection of cash ready to be spent in the bank?

Welcome to the Discretionary Dollar!

November 29, 2009

Welcome to the Discretionary Dollar!  My goal for this blog is to explore everday ideas regarding personal finance. Here are a few main objectives of this blog.

  • Explore ways to save and live frugally
  • Create an environment of collaboration
  • Discuss and evaluate various investment strategies
  • Learn more about personal finance!

Please feel free to comment with your suggestions, tips and personal experience. We all have something to add.