Guest post from Maya of Great Living Now
My family is moving halfway across the continent. So instead of paying ridiculous shipping fees, my husband and I decided to de-clutter our house — we’re getting rid of everything that we don’t use on a regular basis.
We put together huge boxes of books we don’t re-read, toys our son doesn’t play with, and clothes we don’t wear. Then, a crazy idea occurred to me: “Why don’t I estimate how much money we spent on all this stuff?”
I did a quick estimate: about 200 books, each at approximately $15, gives $3000. Three thousand dollars! I was stunned. That’s just for books!
Now, I consider myself very good with finances. I am very careful with large purchases, and I stopped living paycheck-to-paycheck years ago. But here were piles upon pile of small things that nobody uses, and it all adds up fast.
Then I noticed one other thing. My piles of junk had little variety. Books. Dresses. Toys.
That’s when I knew I was onto something. I had discovered my financial sinkholes.
What are financial sinkholes? They are the small stuff we buy, and keep buying, that nobody really uses.
I am not here to tell you to stop buying books, dresses, or toys. However, I would like to help you identify your own unique financial sinkholes, so that you can use your money towards things that will actually get used.
Here are three signs to help you identify financial sinkholes:
1. You have a lot of them.
Whether it’s shoes, toys, books, or skincare products, in order to qualify as a financial sinkhole you should already have a lot of it.
Of course, you probably don’t buy exactly the same pair of shoes twice. But if shoes are a sinkhole for you, then you probably have many pairs of shoes just sitting in the back of your closet.
Take a look around your house. What do you see a lot of?
2. Most of them don’t get used.
The primary feature of a sinkhole is that nobody really uses them, except perhaps for very few times right after the purchase.
If shoes are a sinkhole for you, then you don’t wear most of your shoes. You might have 2 or 3, or even 5 pairs of shoes that you wear regularly, but there are 15 more sitting in your closet that never see the light of day. But, if you have 20 pairs of shoes and actually use all of them regularly, then they are not a sinkhole by my definition.
3. You enjoy buying them.
One of the best ways to tell if something is a sinkhole is how much pleasure you derive from buying it. I love trying on dresses. Apparently, I also enjoy buying them. So, I have a couple dozen dresses just sitting in my closet.
The problem is that I like trying them on a lot more than I like wearing them. I’d wear a dress once or twice, and then I go back to the more practical pair of shorts. That’s how dresses became a financial sinkhole for me.
When it comes to financial sinkholes, knowing is more than half the battle. Once you become aware of them, it is a lot easier to put a stop to it.
Now, when I consider buying a book, I first check whether the library has a copy. When I consider buying a dress, I think long and hard how often I will actually wear it. Before buying a new toy for my son, I ask myself, or him if he is with me, whether he will actually play with it.
Putting a stop to financial sinkholes is very effective, as these sinkholes use up hundreds or even thousands of dollars without us realizing it. But more importantly, eliminating financial sinkholes leads to saving without any self-deprivation, because you are cutting out that which does not get used anyways.
What are your financial sinkholes?
Maya Ackerman divides her time between research, writing, teaching, and spending time with her family. To read her other work, check our Maya’s blog, Great Living Now.