Kip Tips


Clear Your Clutter to Reap Financial Benefits

Cameron Huddleston

Put more cash in your pocket or take advantage of tax breaks by getting rid of things you don't need.



When you look around your house, do you see a lot of stuff? Are your shelves filled with trinkets and knickknacks? Do toys and games clutter the floor? Are closets and cabinets overflowing?

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If so, you're not alone. America has been called a clutter culture -- and there's a study to prove it. Researchers at UCLA's Center on Everyday Lives of Families studied the homes and possessions of 32 families and found garages so full that cars couldn't be parked inside them, refrigerators almost entirely covered with magnets, photos, notes and other items and home offices crammed with toys, according to UCLA Magazine. The results of the study are published in a new book called Life at Home in the 21st Century: 32 Families Open Their Doors.

Although the study was conducted from 2001 to 2005, the researchers told UCLA Magazine that most of the homes would look the same if they returned today. However, one family took action after the study to get the clutter out of their lives.

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Paring down your possessions can feel good (the researchers found that the study's participants -- particularly the moms -- were stressed from managing their possessions). Getting rid of clutter also can provide financial benefits. Here's how:

1. It can lower your tax bill. If you itemize on your tax return, take all that stuff to Goodwill or any other charitable organization and claim a deduction for your contribution. Goodwill has a list of price ranges for items sold in its stores that can help you figure out the market value of items you donate. If your noncash contributions total more than $500, you must complete Form 8283 and attach it to your tax return. Single items valued at $5,000 or more, regardless of condition, require a written appraisal.

2. Put money in your pocket. You've heard it before: One man's trash is another man's treasure. Have a yard sale (see these tips) or sell your wares on eBay, Craigslist and other sites (watch this video). You can sell clothing, furniture and home accessories that are in good condition at a consignment store. Expect to split the profit 50/50 with the store. (Ask for details, though, because store policies vary.)

3. Eliminate financial mess. While you're decluttering, take the time to get rid of documents you no longer need and go digital with the rest. See Toss Paper Files You Don't Need and 7 Steps to Convert Paper Files to Digital for help. This exercise can help you get your remaining documents organized, save you time as your prepare your next tax return and perhaps prompt you to find ways to streamline more of your financial responsibilities (by setting up automatic bill pay, for example, and eliminating all those monthly paper bills).

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