Tips From The ‘Friends Talk Money’ Podcast
By Richard Eisenberg, Next Avenue Managing Editor getty Getting rid of stuff that’s taking up
By Richard Eisenberg, Next Avenue Managing Editor
Getting rid of stuff that’s taking up space in your home can be tough — even for money experts.
That was made painfully clear on the new episode of the “Friends Talk Money” podcast I co-host with Terry Savage (personal finance syndicated columnist and author of “The Savage Truth on Money”) and Pam Krueger (the “MoneyTrack” public television host and founder of the financial adviser vetting firm WealthRamp). You can listen to the podcast wherever you get your podcasts.
Savage sheepishly confided that her home is cluttered with boxes of her tax returns going back to the 1970s. “I still have my son’s baby carriage in it and my rocking horse from when I was a little girl,” she said. “So do not ask me how to give things away.”
Do You Really Need to Pay For a Storage Unit?
Krueger acknowledged that at one point she was paying for a storage unit she rarely visited or used. Her advice to listeners: Don’t do what she did.
And I — Next Avenue’s Money & Policy editor — admitted that I’m something of a pack rat. But, I added, fortunately my wife is not. I noted that I’m grateful that in the past few years, she’s been terrific about giving away and junking some of our unnecessary stuff. This way, when we finally do downsize and relocate, we’ll have less to unload.
Krueger and Savage also had helpful advice for assisting your parents to give away or dispose of their stuff.
Rather than waiting until after a parent’s death to begin figuring out which possessions to keep, donate or try to sell, Krueger said “start earlier.” By that, Krueger meant, talk things over with your parent and any siblings, as she did, to decide who’ll get what.
“It’s a much gentler process if you start earlier. That’s what we did in our family,” Krueger said. “It was a big help because by the time my parents passed away, we just didn’t have that many things that we were going to fight over at that point.”
If you don’t get an early start helping your parents dispose of their possessions, and only begin after their death, it will help if you can work with sibling or friend during the process.
Savage said after her mother died, she and her two brothers went through their mom’s apartment together. “We never fought about a thing,” said Savage. “We organized everything. We did give a lot away and it was a bonding experience and we could feel my mother’s presence.”
My sister and I had a similar experience after our dad died.
Rightsizing, Not Downsizing
Krueger prefers to call the process of downsizing your items “rightsizing.”
That view was echoed by our podcast guest, David Ekerdt, a University of Kansas sociology and gerontology professor who recently published “Downsizing: Confronting Our Possessions in Later Life.” (I also interviewed Ekerdt for my Next Avenue blog post, “How to Get Rid of Stuff: The Survey Says…”.)
But Ekerdt told “Friends Talk Money” that some people over 50 he and his research team interviewed, who shed possessions when they relocated, called it “the hardest thing they’d ever done.” They talked about how tiring it was and what a big job it was.
Savage said that one way to compensate for that pressure is to “think about how happy someone will be to receive” the items that are donated or sold.
In fact, Ekerdt said that in his downsizing surveys, “most of the people were very pleased with themselves. They had a feeling of achievement and empowerment and satisfaction in having tried to take care of things.”
The Sentimental Side of Downsizing
Some items hidden in our attics, basements and drawers are too hard to relinquish, though, because of their sentimental value. They’re part of our families. They’re part of us.
Savage said that at the desk she was recording from, the bottom drawer contained her late mother’s handwritten address book. Her mom died 10 years ago.
“It’s her handwriting, you know, with a rubber band around it. And I’m sure everybody else who’s in there has passed away. I can’t throw that in the trash,” said Savage.
Added Krueger: “There are certain keepsakes that make no sense to anyone else.” She’s been hanging onto letters she wrote from camp at age 10. “I keep those and I’m never going to get rid of those. They don’t take up much space, but they’re very meaningful,” Krueger said.
How Long to Keep Financial Records
So, how long should you keep financial records, like bank statements and tax returns?
Savage’s rule: “Basically, you need to keep them for three years at the minimum, and I would keep them for seven years,” for tax purposes.
Seven years is how long the Internal Revenue Service generally has to audit returns. (Savage keeps her tax returns for much longer; she just can’t bring herself to trash or shred them.)
Keep all home renovation records as long as you’re in your home, though, Savage said. They’ll come in handy when you or an heir needs to calculate taxes on the sale.
Krueger had a tip for people feeling pressure to sell their homes and downsize now, due to the pandemic-inspired sellers’ market: “Don’t rush.”
She added: “Unless there’s some urgent situation where you absolutely have to move, downsizing is imminent, you have no other choice, you have no other option and you’re getting an offer from a Realtor knocking at your door saying ‘I can get you a full-price offer’ and you’ve thought it through. But otherwise, I would just let things calm down a bit and see where they’re going to settle.”
After all, Krueger said, “You just don’t want to make this big of a decision at this point in life and be wrong on it and then kinda look back and wish you had taken your time.”