How did tax season treat you this year? Did your bank account take a big hit or were you one of the lucky ones that enjoyed a return from dear ol’ Uncle Sam? We enjoyed a nice little return and we partially have our closets to thank! Everyone knows that money doesn’t grow on trees and we watch every single penny that comes in and goes out. You don’t pay off $250,000 in debt without taking your money seriously. While our side businesses have helped boost our personal finances, we don’t overlook anything – including the stuff that’s hiding in our closets (and drawers and cabinets). Whether you choose to donate or sell your unwanted household items (we do a little of both), you’d be amazed at the impact a little decluttering can have on your yearly income.
We’re sharing of our favorite services for ridding ourselves of all the stuff we don’t need and how we keep track of our donations in a way that will make the IRS very happy if they ever come knocking. And, of course, we’ve got to mention the decluttering book that everyone is talking about lately.
This post contains referral and affiliate links to help you get started as you trade your closets’ contents for cash.
Decrease the Clutter, Increase the Cash
Maria and I consciously make an effort to keep an eye out for things we don’t need or use around the house so we can sell or donate them. The extra money is great, but we mostly enjoy the opportunity to free up storage space at home. We live in a two bedroom condominium, so our space is limited. If we don’t need an item, we sell or donate it so someone else can use it and we have a little extra money (either in cash or tax refunds). It seems as though we always have a box collecting items to donate in our garage.
As a matter of fact, the our current donation box is getting pretty full. It might be time to catalog what’s in the box and make a trip up to Salvation Army. Let’s take a closer look at what we have.
Some extra hotpads from the kitchen (we owned about 8 of them), some old frying pans, a discarded purse, a few of Maria’s sweaters, a couple towels, a tin, a bracelet, and an unopened bottle of bubbles. As you can see, most of the items we donate are just regular old household items. It’s the kind of stuff that you just accumulate over time without even realizing it. Each item isn’t worth much on its own, but if you donate (or sell) enough of them, they add up.
Last summer, we donated a lot of larger items as we combined our separate homes into one: a bed, a couch, bookshelves, tables, lamps, chairs, and so on. We were so busy planning for the wedding that we didn’t have time to sell anything, so we donated it and wrote it off on our taxes. If you could even look through the photos of my house just before we sold it, almost every piece of furniture in that post went to a family member or was donated. We simply didn’t need all that furniture.
Donating your unwanted or unused items isn’t the only way to go. Selling these items has the advantage of getting you immediate cash rather than having to wait for your tax refund.
You may know this already, but Maria sells a lot of her gently worn clothes and other items through her Maria Sells Things Instagram account. Some of her Stitch Fix pieces end up in there, along with other things like jewelry, classroom decor, sample resources from her TpT store that she no longer needs, and even an old computer. She’ll pretty much sell anything from our home that she knows someone with her taste will be happy to own. I have even sold old textbooks on the Amazon Marketplace to make some quick cash.
How to Find the Money Hiding in Your Closets
Finding items that you don’t use anymore sounds easy enough, right? But for some people, sorting through the clutter and deciding what to get rid of is harder than others. I’m one of those people; I’m a packrat. Left to my own devices, I would never get rid of anything. Recognizing items that we no longer need comes much more naturally to Maria. It took me a while, but I’m coming around to her outlook; we just don’t need that much stuff.
That being said, some tips on picking out what you don’t need can be useful for us packrats who have a hard time letting go. I think my personal favorite is hanger reversal trick for sorting out clothes that you don’t wear. Basically, reverse the hangers for all your clothes in your closet and, when you wear an item of clothing, put it in your normal way. After six months, you’ll see what items you’ve actually worn. If you haven’t worn it in six months, you probably won’t ever wear it again. Donate it or sell it and clear up some space in your closet!
There are countless websites out there that have tips and tricks for decluttering. One of my personal favorite blogs, Lifehacker, has tons of posts dedicated to the subject. Apartment Therapy, another giant of the blogging world, has a whole category devoted to home organization with tons of tips on getting rid of unneeded stuff. But, after our moves last year, I now think that your mental approach to this job is what is most important.
I haven’t read it yet, but The Life-Changing Magic of Tidying Up (affiliate link) is supposed to be a fantastic book for putting you in the right frame of mind for decluttering. Most people approach the problem by figuring out what they should get rid of. Marie Kondo’s book teaches us that you should assume that you are getting rid of everything and then decide to keep an item if it brings you joy. Based on my experiences, this mindset shift is key. I think Maria and I will be listening to this book the next time we are in the car for a long road trip.
Selling Your Stuff
Ok, now you’ve got a pile of stuff that you don’t need anymore. What to do with it? If I were you, I’d see if there was anything in that pile worth trying to sell. Nice pieces of clothing, jewelry, electronics, some books, all these might have a higher value which might make it worthwhile to try and sell them rather than donate them.
If you are going to sell some of your stuff, you have a few options. There’s the obvious ones, like eBay and the Amazon Marketplace, but there are some other options out there, too. If you are looking to sell women’s or kids’ clothes, you might want to check out ThredUP, an online consignment store based in California. They have a wide selection and are really growing in popularity. ThredUP can be a great option for people with really high quality, very gently used clothes; but it may not be the best option for everyone. Maria actually wrote an entire blog post with tips and insight to help you consider whether or not ThredUP is the best option for you.
Another place to sell your used clothing is, believe it or not, Etsy, where there’s a surprising, but good used clothing market. Facebook also has some great community groups that are formed around the premise of buying and selling used goods.
If you’re like Maria and you’ve got some great Stitch Fix items hiding in your closet that you know are worth a lot and are too nice to just donate, try joining the Stitch Fix B/T/S and discussion group. There are 50,000 members of this MEGA group and women are constantly buying, trading and selling their Stitch Fix clothes (hence the B/T/S in the title).
For a last resort for online goods, especially furniture, you can try Craigslist. If you do sell on Craigslist, be careful about where you meet to exchange the goods. Most police stations will let you use their parking lots as a Craigslist safe zone.
But those are only the online options for selling your stuff. You can always use local consignment shops or have a garage sale. The subdivision I grew up in always had an annual sub-wide garage sale weekend, which ensured that there was a much bigger draw of people looking for deals. A community-wide sale of some sort is a great way to get rid of much of your stuff.
Donate the Rest
Once you’ve sold everything you can sell, the rest you can just donate. Before you go ahead and donate, you need to write up a list of everything you are donating and put a value on it. The IRS says you can deduct the “fair market value” of your donated items. What does that mean? It means what you would be able to sell it for. Determining fair market value is kind of a guessing game, but there are some valuation guides out there that you can use. I usually use the Salvation Army guide as it is has most common items and gives you a pretty decent idea of what you can deduct. That list of everything you donated and its value is important in case the IRS ever decides to audit your taxes and wants to see how you calculated the value of your donations. Keep it, and the receipt from your donation, with all your tax stuff.
Now that you know what you’re donating and have created your inventory with values, you have to figure out where to donate it. Maria and I donate most of our household items to the Salvation Army, but there are tons of charities out there that will take donations of goods. If you want to donate to the Salvation Army, you can find your nearest store or schedule a pick-up here. The Goodwill is another great place to donate with a lot of stores throughout the country. You can find your nearest Goodwill store right near the top of their website. If you want to specifically help out veterans, the Purple Heart will take donations of household goods, even coming out to pick them up from your house. There are a ton more local charities, so you should check to see what is in your area.
I found out last year that many charities are no longer taking mattresses, couches or recliners because of bed bug concerns. It took me a little bit of effort to track down a charity in my area that would take them, which is how I found the Furniture Bank of Southeast Michigan. As the name implies, they accept used furniture to help families in need, especially beds. Fortunately, there are furniture bank charities all over the country, they just go by different names in each area. The Furniture Bank Association of North America has a list of all the local furniture bank charities.
People tend to accumulate things. It’s just how we are. But cutting down on the unnecessary stuff and freeing up space in your house, you can put more cash in your pocket. All around, it’s a pretty great deal to sell or donate the stuff you aren’t using anymore.