We have a cost-of-ownership problem in this country.
Let’s agree that the cost of living is a bigger concern even if the annual inflation rate fell to 7 percent in August from 7.6 percent in July. But the cost of owning all the things we buy results in expenses that can easily run into hundreds of dollars a month for a household. Tired of your efforts to cut costs by buying less? Getting rid of some of what you already own might help.
The burden of owning many things becomes evident every time a vacant lot in your city is filled with storage units. Storage units are a growth business because families have too much stuff at home.
Include my family in this group. We have a locker that holds some remnants of the downsizing my wife and I made a few years ago when we moved from our family home to a condo. There’s a bag of hockey gear that belongs to one of our boys, some random pieces of camping and fishing gear, various binders and boxes of photos and keepsakes.
I keep planning a family reunion to strategize on how to get rid of the unit, but it hasn’t happened yet. I’m thinking maybe this weekend unless I find some easier problems to solve.
Our storage unit in suburban Ottawa is small and costs a little under $100 per month. A few Google searches revealed that medium and large units can cost as much as $300-$400 or more per month, with large city units costing more than smaller ones. I can report from experience that the cost of a storage room increases regularly.
Emptying a large storage unit is a big undertaking, so consider a two-step process. Reduce your holdings by going down to a medium or small unit first, and then give 12 months to further reduce or eliminate the unit altogether.
Last spring I set a goal of having our storage unit ready by the end of summer. I hope you have more success downsizing than me.
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Rob’s Personal Finance Reading List
What Costco teaches us about inflation
A look at the threat inflation poses to household finances this fall, prompted by a trip to Costco to load up large amounts of family supplies.
Where we stand on iPhone prices
A worldwide price comparison for iPhones shows that Canada is one of the cheaper countries. However, iPhone prices have increased three times over the past 15 years.
Life, Death and Your Spouse
The Blunt Bean Counter blog on talking to your spouse about your estate plan. If you died, would your spouse have the required information about your financial assets? Is there a roadmap for dealing with estate matters?
The Great Resignation, a year later
I asked five women in the United States who either quit their jobs last fall or were planning to. How did things develop?
Ask Rob
Q: Should I sell mutual funds in my tax-free savings account to pay off my mortgage?
A: This is the type of question best approached by a financial planner who can consider the many variables that need to be addressed here. Some questions to consider: How urgent is the mortgage repayment? Concerned about higher renewal payments because interest rates have skyrocketed? What is your return on the TFSA and how does it compare to your mortgage? If you’re unhappy with your mutual funds, what other investments could you consider to improve returns? Aside from the TFSA, what other investments do you have to help you reach your financial goals, including a comfortable retirement? Overall, this is not a step that should be undertaken without an analysis of your broader finances.
Do you have a question for me? Send it to me. Sorry I can’t answer everyone personally. Questions and answers are edited for length and clarity.
Today’s financial calculator
Here is the best calculator I’ve seen for the cost of raising children. A must for new parents.
The money free zone
I love the calm atmosphere of this new song, Why Dub by Soul Revivers.
From the Twitterverse
A proper tweet about failed investment claims with cryptocurrency.
In case you missed these personal finance stories from the Globe and Mail
More Rob Carrick and money cover
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