*snip*
The hidden cost of stuff
Glink’s point is that most of us aren’t thinking. And so we buy another TV, better speakers, more shoes, another suit, a second car, a new set of dishes, more towels, plus that boat we’ve always wanted -- without stopping to consider:
Is it necessary?
Can I afford it?
And the most important: What is this new thing really costing me?
Gopal Ahluwalia, director of research for the National Association of Home Builders, says all this stuff is costing us quite a bit in storage alone. Since 1970, the size of the average house has increased nearly 40%, from about 1,500 square feet to 2,300 -- and that’s despite an overall decline in family size. In addition, he says, we’re building new homes with bigger kitchens and more bedrooms, bathrooms and closets than ever before. “Every master bedroom usually has at least one walk-in closet these days,” Ahluwalia says, “often two: his and hers.”
How sweet.
Glink says that this is our downfall: “When you buy a bigger home to accommodate your stuff, you pay higher taxes, higher heating bills, bigger cooling bills, a bigger mortgage, plus whatever the upkeep costs are for the stuff itself,” she says.
Is all that stuff worth the price?
In part, this is about living beyond our means, and in part it's about not being able to distinguish between what we want and what we need. I have a friend who is struggling with his desire to buy a boat. Does he want a boat? Yes. Could he afford it? Probably. But does he have the time it would take to properly care for the boat, never mind use it often enough to make it worthwhile? No. So at the moment he’s restraining himself.
Most of us don’t. We succumb to SDA and squander money on temporary pleasures without thinking about what, really, we’re investing our money in -- and the fact that our money would almost certainly be better employed elsewhere.
Glink recently counseled a couple who had made an excellent real estate investment and turned a profit of $40,000. Not bad. Except that they also had $20K in assorted credit-card debt and other loans left over from some lovely furniture they’d bought and vacations they’d taken. After they paid back the debt, plus the taxes they owed, they only had a few thousand to sock away in their child’s college fund.
“If they’d planned ahead,” Glink points out, “and paid cash for their vacation, scaled back on the home decorating, considered a 1031 tax-free exchange to make the most of their real estate deal, they could have come out ahead.”
Complete article.
http://moneycentral.msn.com/content/SavingandDebt/P43217.aspClutter is BAD. Accumulata is worse!!!
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
