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How a 'life edit' in your 20s or 30s can save you money for decades

Twenty/20

Decluttering can spark joy. It can also save you a lot of money.

Tossing out your tchotchkes a la Marie Kondo is one way to go about decluttering. Another way is to undertake what's known as a life edit, an approach to downsizing often marketed to people in middle age. The idea is that culling your possessions leaves you with fewer items to maintain, less stuff anchoring you down, and more flexibility, time, and freedom.

Undertaking a life edit is equally beneficial if you're in your 20s or 30s, though, or maybe even more so. And it can help you save money down the line.

"People go through life in their 20s and 30s, and it's all about spending and accumulating things and stuff," says certified financial planner Carolyn McClanahan, director of financial planning for Life Planning Partners in Jacksonville, Florida. "The less stuff you have encumbering you, the easier it is to have a flexible lifestyle where you can change jobs easily, move around the country, take time off, and go travel."

Here are four guidelines for making a life edit in your 20s or 30s.

1. Set a 'discard by' date

If you're on the fence about an item, put a "get rid of" date on it, says McClanahan. If you don't feel the need to look at or use the object by then, you've given your future self permission to toss it.

Should you need more motivation, consider the high cost of keeping stuff around. A 5' x 10' storage unit averages $70 per month, or $840 per year, according to HomeAdvisor.com — and that's before taxes or facility fees.

"To keep stuff that actually takes up big physical space just isn't worth it," says McClanahan, adding, "The most important thing is realizing the past can never be relieved, and usually the memory is better than the actual experience."

People go through life in their 20s and 30s, and it's all about spending and accumulating things and stuff.
Carolyn McClanahan
Certified Financial Planner

2. Don't let sunk costs bog you down

People tend to hold onto things they don't use, or even want, because of a mental trap called sunk cost fallacy, explains McClanahan. "When you pay money for something, and you have it, you always think it's more valuable than it really is," she says.

It's normal for passions to change, she adds: "Giving [that item] to somebody who will love it is better for that object than you incurring the cost of keeping it." For example, McClanahan says she's had a hard time letting go of an old trombone she played but she knows it would do more good if she could donate it to a high school music program.

Another incentive, she says, is that letting go of perfectly usable items that aren't a good fit for you, anymore, is about sustainability. It allows others to use what already exists and reduces waste.

3. Downsize while your stuff is in demand

One benefit of an edit in your 20s and 30s is that "you're more likely to be able to find people who would want" your belongings on Craigslist, eBay, or just a regular old garage sale, says Richard Eisenberg, managing editor at Next Avenue and cohost of the podcast "Friends Talk Money," who has written about Boomers struggling to get rid of family heirlooms.

"It's to your advantage to unload things you don't need," he says, "because you're more likely to find potential takers."

Eisenberg notes that certain items like breakfront cabinets and large dining room sets that were once in high demand are really no longer of value. "The things that my parents got when they were young, not only did they think they would grow in value, they just thought 'Oh, well, people will always want these.' The reality is people don't always want them, and it's even more true today than it was 30 years ago."

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4. Resist lifestyle creep

When financial coach Bernadette Joy and her husband AJ Maulion moved from New York City to Charlotte, North Carolina, they got what so many city-dwellers crave: more space.

As it turned out, they didn't need it. "We've been in our house for six years now, and we're like, 'Why did we get all this space? We don't like cutting grass, we have all these bedrooms, and when you furnish all these bedrooms it adds up to so much money,'" she says.

The lesson is that just because you can get a bigger home doesn't mean you automatically should.

The couple ended up adopting a one-income, minimalist lifestyle to help them pay off more than $300,000 in debt in three years, selling many of their unused and unnecessary possessions. Today, Joy is working on downsizing to a condo, and she's grateful she made the choice now, in her 30s: "I've witnessed so many other people who are trying to just edit later on in life, and it's hard to make that change," she says.

She suggest that starting to edit early in life works the same ways as compounding interest in your 401(k): "If you do things over time, it'll grow into bigger savings over time, and really set you up for the future."

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