Frugal, or hoarding?

There is a fine line that appears to reside between being frugal and being a hoarder. My recent exercise in selling things I no longer want or need on eBay was an exercise in defining exactly where that line exists. This week, I discuss as I reflect on my experience.

What Value?

I'd like to start by stating that, while my home has never looked like those on the television show "Hoarders," a room or two in my basement may have approached this level of disarray. Through this, I can understand how a person can get to the point of filling their house; I saw first hand how easily I could fill a room beyond a reasonable capacity. If I didn't exercise discipline in restricting my "Collection" to the basement, I might very well be the next subject on a show on hoarding. Was this a by-product of being frugal? As I pondered this notion, I came up with four reasons that I could account for my hanging on to stuff I no longer need or use: 1) It's something that has sentimental value, 2) It's something I believe I may have use for in the future, 3) I feel guilty about contributing to our landfill problems, or 4) It's something I believe has inherent value that makes it worth hanging on to. Now I'll visit each of these categories to fully explore them in my life, and share my thoughts on them.

Sentimental Value

I'm a sentimental guy. For example, I still have my Pentax K1000 film SLR camera, not only because it was my first good camera, but also because it was once owned by my aunt who has passed away, was a Christmas gift from my parents, introduced me to the world of SLR photography, and was used for taking the first pictures of my son when he was born. It doesn't matter that this camera now has light leaks, nor that I've long since moved on to digital photography. I'll probably never take another photograph with it again. It's the same with many things I've accumulated in my life. Any guest in my house can point to any particular object, and I'll tell them the story behind it. Even the things I buy today have some kind of meaning that relates to something I've learned from my past, and become woven into the fabric of my possessions.

This personal investment I make into the things I own accounts a large deal for the things I've accumulated. They become a part in my life, either big or small, and then become part of my living memory. It becomes all too easy to build memories around these objects; as I hold them, I feel as though I'm transporting myself back in time, reliving a moment; perhaps to relive things a little differently. To consider the possible outcomes in my life. As I hold my K1000, I wonder, what if I devoted my life to the art of photography? I imagine myself as a photojournalist, or perhaps in my studio creating dreams for people. I would be an artist extraordinaire, immersed in a world of creativity and living amongst the revolutionaries of my time.

As these words flowed from my fingers, I have come to terms as to the reasons why I didn't choose that path. I had other goals that were in conflict with the "Starving Artist" lifestyle necessary for greatness, and the desire for me to pursue those paths was greater than my desire to become a great photographer. Therefore, the entire exercise is futile and pointless. I've made different choices in my life, and those choices have been good ones for the person I was at those times in my life. This isn't to say that I can never become a great photographer, but my potential to make that dream a reality will never happen as long as I continue to revisit the past. Only by looking into the future unencumbered by such thoughts can I evolve my lifestyle into the kind of life I want to live.

Having clutter from the past in my life is what really holds me back from the greatness I aspire to become. The memories I have of my aunt, of my son as a baby, and of Christmas mornings can be revisited in photographs, now converted to digital jpegs, which doesn't take up any room. After all, there's no harm in the occasional nostalgic trip to the past; it just can't be allowed to dominate my life. The stuff has to go.

Future Use

I've held on to a lot of stuff because I believed I might have use for it in the future. For example, whenever I bought a new winter jacket, I hung on to the old one with the belief that, should the new jacket get lost, stained, damaged or torn, I would still have my old winter jacket to wear. The problem with this thinking was that I tended to accumulate jackets. In my clutter room in the basement as well as in my workshop, there are plenty of items I have "Just in case" I need them. I would think I'd feel foolish if I got rid of something, and then discovered that I actually needed it a week or a month later.

The problem with this logic is that I cannot possibly anticipate what I might need in the future, and so I hang on to everything that I think I might use one day. Over time, old tubes of glue get hard, and things get buried, lost, and forgotten. In my search for something, I came to the realization that the time I was spending in searching for the item was not worth the few dollars it might have cost to buy at the store. That's when I realized that every time I saved extra screws and material from products I buy, I'm adding to a pile that becomes increasingly difficult to search. At a certain point, I'm further ahead tossing the spare items out, keeping only those that have very common uses, such as wall anchors, #8 wood screws, and washers, and only to the point where they accumulate to a handful. The extra Allen keys I get with particle board furniture can go straight to the trash, and I really don't need to hang onto any extra winter jackets. 

Landfill Guilt

When I was a child in the public school system, I was inundated with films and videos about the landfill crisis of western culture. Mountains of trash, as far as the eye could see, painted a bleak and distressing picture. I was convinced that throwing out something as useless as a broken audio cassette would hurtle my world to that envisioned in the movie Wall-e. In fact, I'm absolutely certain this campaign of the 70's and 80's has contributed to a growing culture of hoarding today. 

I don't deny that there is a problem with garbage in western culture, and the problem becomes apparent as soon as we stop throwing things away: It doesn't take very long before a house can become a landfill. Thing is, I don't want to live in a landfill, but I exist in a consumerist culture. I have these things and they have accumulated.

I now make conscious choices to reduce the garbage I personally generate. I use reusable shopping bags instead of plastic bags. I buy music and watch videos online rather than purchasing physical media. I keep the pictures I take in digital format as much as I can, and display them in a digital picture frame. That said, things will still become broken or worn out, and something needs to be done with them. Old electronics need to go to an electronic recycling centre, some things that contain metals like aluminium and copper can go to a metal recycling centre, and old batteries can go to a battery disposal bin, but ultimately there are some things that really do need to go to a landfill. I have to break myself of this guilt, put garbage in the trash, and use this as a lesson to guide my purchasing habits in the future.

Inherent Value

Now we arrive at the biggest issue: The belief that things have an inherent value. Moving beyond the sentimental value, future use potential, and having eliminated garbage, I'm left with the notion that the item may still hold monetary value. Being frugal, I might feel as though I'm throwing away money getting rid of some of these things that I no longer want or need. I kept saying to myself, "I can put it up on eBay or Kijiji and get some money for this item." 

EBay has an interesting feature in that a person can search completed listings of a particular item or type of item to see what it has sold for. It makes it easy to determine if something has value or not. I decided to set a lower limit on the items I would sell. Anything worth less than $10 would be donated to Goodwill. I soon discovered that a lot of things I was holding onto fell into this category.

I realized that much of the stuff that I believed had value but no longer had a use for was stuff that was either given to me by someone, or stuff that I had bought from a thrift store. In other words, this was once somebody's stuff that they wanted to get rid of. They didn't throw it out because it still had value. That was why they donated it or gave it away instead of throwing it in the trash. They weren't stupid; on the contrary, they were smart to get this stuff out of their homes and lives.

It doesn't do me any good to hold on to this stuff. Eventually, the backpacks get mouldy, the jackets get musty, and stuff that may have been useful slowly deteriorates into garbage. It's wasteful. I decided that, if it's any good at all, I'm either going to use it or donate it, just like other people have done. After all, if it can be useful to someone less fortunate than I, I'm contributing to a better society. I get rid of clutter, someone less fortunate gets something they could really use. Unless it has a lot of value, then I'll sell it.

My eBay experience has demonstrated that perhaps even $10 is too little of a lower limit. It takes time to photograph the item, package it properly, weigh it, measure it, and create a listing. There is expense in getting appropriate packaging materials. There is also the time and expense in delivering the package to the post office, if the item sells. For the sakes of argument, consider the minimum wage in Ontario is currently at $10.25. If I can get the time I spend on each item down to an average of an hour, including the time to purchase packing materials, create the listing, pack the item, measure it, weigh it, and ship it, if I account for the cost of that packaging plus eBay and PayPal fees, I'll be making significantly less than minimum wage on something I sell for $10. 

The truth of the matter is, I'd be further ahead doing side jobs on a Sunday afternoon than I would listing things on eBay. It's a better use of my time and I can earn more money.

Conclusion

Being frugal doesn't have to mean becoming a hoarder; in fact, the true nature of being frugal is the opposite of hoarding. Incorporating frugality in my life has meant applying frugality not only to matters of finance, but also to my living space and time. Needing to deal with clutter has taken me away from the things I want to do, including writing this blog. At this point in my life, I can honestly say I have finally moved beyond my attachment to things. I've spent the past two weeks carting boxes of stuff to either Goodwill or to the local waste transfer station. By eliminating this stuff, I can look forward to a future of continually evolving into the person I want to be.

The Money Mart scam

When I was young, I did all kinds of different jobs. One summer, I did a lot of different work on a construction site where new homes were being built on the side in addition to a regular job I had. The hourly pay was great, but it was terribly exhausting. I was only able to do it for a short period of time, but the extra paycheque was going to translate into some well-earned fun.

My foreman gave me my cheque on a Friday evening. It was $1400, which was a lot of money to me back then. I wanted to leave that night for a weekend of fun with cash in my pocket. Unfortunately, when I arrived at my bank, they were closed for the day. I wondered what to do, and saw the Money Mart store across the road. A big sign in the window promised payday loans and cheque cashing services. The cheque I had was a business cheque from a reputable company, so I figured there wouldn't be a problem.

When I walked in, I was presented with a huge application form by the lady behind the counter and had to present three pieces of identification. I was okay with this process, given that they need to protect themselves from fraud. The lady behind the glass advised me I would have to pay them 10% of the value of the cheque. I choked on this a little because it would mean it would cost me $140 to cash a cheque, but reasoned that they are open later than banks and therefore would charge premium rates. Besides, I reasoned that they would take on greater risk than a normal bank, and would need to make up for losses with these rates. After considering this, I consented and turned over the application form, my 3 pieces of identification, and my paycheque.

I waited. And waited. And waited some more. After half an hour, I was called to come up to the counter. The cashier behind the glass advised me that they would not be able to cash my cheque for me, because the bank for the cheque was closed, so she was unable to verify whether the funds for the cheque were available.

I remember exactly what I said to her, word for word: "Of course the bank is closed! Why would I come here and pay you $140 to cash this cheque, when I could go to the bank and cash it for free?" I pressed her to justify the existence of Money Mart, and she explained to me that if I established an account with them today, I would be able to borrow money from them. I told her I was only interested in getting a cheque cashed, and since she could not do that while the banks were closed, a person would have to be crazy to pay Money Mart for something the banks would do for free. I realized it was a big scam. I thanked her for wasting my time, demanded that she tear up my application, and give me back my cheque and identification.

All was not lost. I had a department store credit card with Sears, so I caught the next bus to the Oshawa Centre. I had a balance due on my Sears credit card. I used my paycheque to pay off this credit card balance, and then Sears gave me the remainder balance in cash. They did not charge me any fees for this service, and were happy to do it without calling a bank. I then set out to have a wonderful weekend.

To me, Money Mart is a scam. A person is better off getting a regular credit card. Consider that, at present, Money Mart requires a person to have a bank account with a bank. If you have a bank account, why would you go to Money Mart to cash a cheque? If you need a loan, they're going to charge $21 per $100 borrowed, with an APR of 521%. These are short term loans, you are expected to pay it back in two weeks. This means if you borrow $500, you'll pay them back $605. Compare that to a credit card; most will charge less than 21% interest, but if you pay off the balance in full when it's due, you never pay any interest or fees. This means, if you need a "Payday" short-term loan, you're much better off using a bank credit card and paying that off the balance in full in two weeks at no cost, versus paying Money Mart $21 per $100 no matter what.

If you're trying to build good credit, you can do that by simply paying your bills on time. That will go much further than having an account with Money Mart. In fact, the only thing I think Money Mart is good for is to take advantage of poor people, making them poorer. My advice to anyone stuck in a Money Mart cycle is to do everything you can to break out of that cycle. When a department store credit service offers greater service for less, you know that it's a terrible deal.

Frugal backfires

Frugality usually results in savings of money and time, but sometimes it's backfired on me. This week, I'm going to revisit those times when my attempt to being frugal backfired. These were learning opportunities, and I hope that by sharing them, others can learn from my mistakes.

Bulk Buy Backfire

Buying things in bulk can be a big time and money saver. It means shopping less frequently, and things purchased in larger quantities often cost less on a per item basis. Batteries are an excellent example of this; while I might pay 3 times for the bulk package of batteries, the cost of each battery might be 5 times cheaper. This only works out if I actually use up the entire bulk pack of batteries before they expire. When comparing a 10 pack to a 2 pack, I'd have to use up six to break even. Generally, it works out for me, though I do tend to prefer rechargeable batteries.

Some unused, outdated tapes

Years ago, I bought a miniDV camcorder. At the time, the miniDV was the best way to go. Each tape could store 60 or 90 minutes of standard definition video, and 90 minutes of HD video, and for the price to quality ratio, no other format compared. I bought bulk packs of miniDV tapes from Costco. The time recently came when my camcorder stopped working reliably and needed to be replaced. I had moved up to an HDTV by now and started shopping for a new HD camcorder. There are no new consumer grade HD camcorders that take MiniDV tapes. Even if there were, I would still prefer one that takes SD cards for the sakes of convenience. I now realize that buying things like media in bulk is a great idea when the device I'm using it on is relatively new. When it's getting close to the end of life for that device, it's be better to buy media individually.

The cost of "Free" stuff

Occasionally, a well meaning friend or relative may offer me something. A piece of furniture, perhaps; or maybe a computer, for example. I used to accept this stuff all the time. After all, I might have a need for that thing at some point in the future; and if I didn't, there may be value in that thing, I would reason.  As it turned out, the stuff would accumulate. I didn't realize how much until it was time to sell my house and move. Any value this stuff had wasn't worth the effort to sell, so I donated much of it, which cost me time and gas. There were some things that weren't accepted, like CRT monitors and any furniture that might contain bedbugs (they didn't, but spreading fear of bedbugs results in a non-acceptance policy), so I had to dump those things off at the waste transfer station at an additional cost based on the weight of the stuff I was getting rid of, with a $5 minimum fee. From now on, I will only accept this kind of thing if I have an immediate use for that thing; otherwise, I'll politely decline.

Cheaping out backfire

Cheap laptop disintegrating after 2 years of normal use 

When I bought my first laptop computer, I bought the cheapest model I could find - the Toshiba Satellite 1700. It came with WindowsME, had 64MB of RAM, had a 10GB hard drive, and used a Celron processor. The battery life was disappointing even when it was new, the operating system was reported as being the worst OS in the history of Windows, and its limited hardware meant I wasn't going to do much more than web browsing, e-mail, and basic office work like word processing and spreadsheets. Eventually, the hinges that held the screen in place failed. I went back to a desktop for a while. I learned from this lesson, and while I made sure to get a good deal on my next laptop, I also made sure to check that it had the features I needed to truly replace my need for a desktop PC and ensured it had solid build quality. Where I barely got two years out of my Toshiba Satellite 1700, I'm still using the Compaq Presario C700 today that I bought in 2008.

I keep this in mind with anything I buy, whether it's a car, clothing, stereo system, snow shovels, or camera. I don't buy more than what I need, but I do decide on minimum standards and check reviews. Some things, like a hi-fi stereo system or camera, may only ever need to be bought once, and if the car or computer I buy is of a level of quality and has features that are acceptable to me, I'm more apt to get more use out of them. If I consider these things on a cost-per-year basis, a $700 laptop that lasts 5 years is a better deal than a $500 laptop that lasts 2 years. A $24,000 car that I like and keep for 12 years is better overall than a $12,000 car that I'll want to get rid of after 5 years.

The Bargain Bin backfire

Watched once, twice at most, now gathering dust

I used to peruse the bargain bins all the time, in search for video tapes to add to my collection. When DVD's made VHS obsolete, I searched those bins for DVD movies. Now I've had to get rid of those VHS movies and now have shelves full of DVD movies I never watch, because I've watched them once and now wish to watch something new and different on Netflix. As it turns out, the cost of Netflix is similar to that of a bargain bin movie every month, with much greater selection. 

When cheap "Lite" Internet access isn't

Once upon a time, I thought I'd save some money by subscribing to a "Hi Speed Internet Ultra-Lite" package. It was the cheapest package, and offered a 2GB bandwidth limit. What I failed to realize was that overage charges were $5.00 per gigabyte, and it didn't take much before I was paying more for "Ultra-Lite" than I was for the higher tiered "Extreme" package. As it turns out, it doesn't take very many OS updates these days to hit that 2GB bandwidth limit.

The high cost of used

I used to shop at Value Village, until I discovered I could get some items they sell for less money brand new at places like Costco and Wal-Mart. Not to mention the unwanted extras that might come with used clothing, like ringworm. This is a case where it pays to shop, and not assume that a thrift store is really going to be thrifty. This was recently covered at another frugal web site I enjoy reading, Squawkfox (click here to read).

Conclusion

There are cases where frugalism can be taken too far. Like everything else in life, it's about finding a balance. I'm still learning, but am glad to have had the opportunity to learn from my mistakes. I hope others can as well.