The Financial Costs of Being Disorganized

Contributed by Renée Bellefeuille

Large cabinetHave you ever purchased an item that you thought you already owned, but couldn’t find – only to have the missing item turn up a month or so later?    This may have happened to you; I know it happened in my house a few too many times.  My husband and I usually gave up looking for the missing tool, head phones, cell phone charger, or other item and went to the store to purchase a new one.   We promised ourselves we would organize the garage or the electronics closet.  After all, we were tired of spending money on items we already owned.

While this is only one example of the financial costs associated with being disorganized, I can think of several other instances that can cost money.  Paying late fees on bills or credit cards is fairly common for disorganized people.    Being charged a “no show” fee for a missed medical appointment because a reminder card was misplaced is another example.  Missing documentation necessary to file taxes can result in being unable to legally claim all the deductions you are entitled to, or penalties may be charged  if you file your return late.

These may seem like small amounts, but over time they can add up.  The equation is pretty simple; the more disorganized you are, the more money you may be losing. The calculation below actually adds some dollar amounts to the cost of disorganization and clutter:

Suppose you have a 1,500 square-foot house worth $300,000, every square foot in the house is worth $200.  If you have a 10×10-foot room you can’t use because it is filled with clutter, that’s a $20,000 storage room.  In terms of monthly cost, you’re spending about 7% of your mortgage on storage!!

The time cost associated with disorganization can add up, too.  If you spend half an hour a day trying to find “lost” items such as keys, clothes, paperwork, etc.;  that adds up to 3.5 hours a week, 15.5 hours a month, 182.5 hours – or seven full days — a year.  This is valuable time that could be better used to doing other activities that you enjoy.

If you decide you are through wasting money and time and want to be more organized, it’s never too late to start.   When my husband and I decided we wanted to become more organized, we followed a very basic strategy that I dubbed “SSO” or Strategize, Simplify, Organize!  We strategized (or I should say I strategized) on what we were trying to accomplish and where the problem areas seemed to be.  Did we have too many belongings?  Did we have inefficient storage or antiquated filing systems?  Were we emotionally attached to some of our outdated possessions?    In the simplify step we made decisions on what to keep, donate, sell, or discard (don’t forget donations may be tax deductible – a financial benefit!)  In the actual organizing step with developed new systems to control paper build up and messy closets.  For example, we open our mail every day and immediately shred any junk mail; we put our bills in a dated accordion file so we pay all our bills on time.  We follow the rule that everything has its “home”.  If you use the measuring tape or Phillips screwdriver return it to its home.  This way it will be there for the next person looking for it.

Lastly, we pay attention and maintain the organized environment we created.  If we notice we are slipping, we’ll take an extra 10 minutes each day to get back to an organized state.  We’re enjoying spending less money and enjoying spending our time doing more of what we like to do! 

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