We have a cost-of-owning problem in this country.
Let’s agree the cost of living is a bigger issue, even if the year-over-year inflation rate fell to 7 per cent in August from 7.6 per cent in July. But the cost of owning all the stuff we buy leads to expenses that can easily amount to hundreds of dollars per month for a household. Exhausted by your efforts to cut costs by buying less? Getting rid of some of what you already own might help.
The burden of owning lots of stuff is apparent every time a vacant lot in your town gets filled with storage units. Storage units are a growth business because families have too much stuff to keep at home.
Include my family in this group. We have a storage locker holding some remnants of the downsizing my wife and I did a few years ago when we moved from our family home to a condo. There’s a bag of hockey equipment belonging to one of our boys, some random bits of camping and fishing equipment, various file folders and boxes of photos and keepsakes.
I keep planning a family summit meeting to strategize about getting rid of the unit, but it hasn’t happened yet. I’m thinking maybe this weekend, unless I can find some easier problems to solve.
Our storage unit in suburban Ottawa is a small one that costs a bit less than $100 per month. Some google searching found that medium and large units can run you as much as $300 to $400 or more per month, with units in big cities costing more than smaller ones. I can report from experience that the cost of a storage unit goes up regularly.
Emptying a large storage unit is a big undertaking, so consider a two-step process. Reduce your holdings enough to go down to a medium or small unit at first, and then set a 12-month deadline for downsizing further or getting rid of the unit altogether.
Last spring, I set a goal of being done with our storage unit by the end of the summer. I hope you have better success with downsizing than me.
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Rob’s personal finance 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 load up in bulk on family essentials.
Where we stand on iPhone prices
A global comparison of prices for iPhones shows Canada ranks among the cheaper countries. That said, iPhone prices have become three times more expensive in the past 15 years.
Life, death and your spouse
The Blunt Bean Counter blog on talking to your spouse about your estate plan. If you died, would your spouse have the information needed about your financial assets? Is there a roadmap for dealing with estate planning matters?
The Great Resignation, one year later
Checking in with five women in the United States who either quit their jobs last fall or were planning to do so. How have things worked out?
Ask Rob
Q: Should I sell mutual funds in my tax-free savings account to pay off my mortgage?
A: This is the type of question best tackled by a financial planner who can factor in the many variables that have to be addressed here. Some questions to consider: What’s the urgency of paying off the mortgage? Are you concerned about higher payments on renewal because interest rates have soared? What rate of return have you been getting in the TFSA, and how does that compare to the rate on your mortgage? If you’re dissatisfied with your mutual funds, what other investments could you look at to improve returns? Aside from the TFSA, what other investments do you have to reach your financial goals, including a comfortable retirement? Overall, this is not a move to be made without some analysis of your broader finances.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial calculator
Here’s the best calculator I’ve seen on the cost of raising children. A must for new parents.
The Money-Free Zone
Loving the serene vibe from this new song, Why Dub by the Soul Revivers.
From the Twitterverse
A right-on tweet about outlandish investing claims involving cryptocurrency.
In case you missed these Globe and Mail personal finance-related stories
- How to avoid sticker shock and lower your car insurance premiums
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- Canadian Tire’s rise in past-due accounts might be a big red flag
More Rob Carrick and money coverage
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- 💰 Your money: Are you prepared for the pandemic wealth boom to blow up in our faces? • This hard-working 24-year-old is nailing it financially. But where’s the happiness? • Who should and shouldn’t worry about the wave of rate increases this year, and what every stressed-out borrower should do right now • Don’t make this potentially costly assumption about the CPP Survivor’s pension
