The Power of Simplifying: How One Mom Used a Decluttering Challenge to Save $1800 in Taxes

I’m a big fan and long-time reader of Sharon at Musings of a Midlife Mom. For one thing, we find ourselves in exactly the same place in life. Here’s how she describes herself:

“I’m a wife and mother entering midlife, trying to live simply and save for retirement, and still have a little fun along the way.” 

So it doesn’t surprise me when I read something inspiring on her blog.

But a comment she made in a post recently caused me to sit up and take special notice: Because she challenged herself to get rid of 1000 things from her home in 2011, her family is getting an extra $1800 back on their taxes.

$1800.

That’s a very tangible and powerful example of the impact that decluttering and simplifying can have on your family’s finances.

So I asked Sharon if she would do a Q&A with me here at The Family CEO and she graciously agreed. Here’s our conversation:

Tell us about the 1,000 Challenge.

I created a challenge for myself to get rid of 1,000 usable items from my home in one year. Trash did not count, it had to be something that I could donate.

What inspired you to take on the challenge?

I started the 1,000 item challenge in March, 2011 after we had a leak in our basement and our whole house “blew up” with stuff. We had to bring all of the items from the basement upstairs…and there was a lot…most of which we really didn’t use or need. My mantra since then has been  “Have nothing in your home that you do not know to be useful, or believe to be beautiful.”- William Morris (Julie’s note: I love that quote. Love it. I refer to it all the time.)

What is your system for decluttering?

Decluttering has to be done in small increments for me to get it done right.  If I do too much at once, I get overwhelmed and quit.  I like to pick a drawer, closet, or in some cases, a whole room if I have the time. (I also hold myself accountable to all of my blog followers and post about it each Monday.)

The first thing I do is remove EVERYTHING from the space. Then I create three piles…give-aways, throw-aways and a “needs to go to a different spot” pile. I then completely wash down the cleared space before I start to put things back. Once I’m done, I’ll put the give-aways in a pile, snap a picture, write down each item on a piece of paper, then load up the give-aways in a plastic bag to be picked up by Goodwill.  Obviously the trash gets put outside in the garbage.

I know you use It’s Deductible to value your donations. I do too. How do you use the program?

I don’t wait until the end of the year to input the items I’ve given away. After each declutter session, I input the give-aways into the program. There is a feature on the top left hand corner of It’s Deductible that tells me the amount  I “saved” on taxes. A GREAT motivator, for sure! Also, by doing this throughout the year, I don’t have a huge project to tackle at tax time.

Did the challenge have any other impact on your finances?

Great question. Actually, yes. After decluttering, you know exactly what you have. (This works especially well in the kitchen!) I’ve lowered both my clothing and grocery bill because of this knowledge.

What did you learn or what other experiences did you have while going through the challenge?

I’ve learned that I have too.much.stuff. It has helped me stay out of stores and utilize what I already have. I believe it was transformative in that I’ve started leaning towards a more minimialistic life. I have started this challenge again for 2012. Eventually I hope to give enough away to be able to downsize to a smaller home…which is my ultimate goal.

I want to thank Sharon so much for taking the time to talk with me about the challenge. I find her experience so inspiring, don’t you?

Here are my takeaways:

• Challenge myself to sell or donate 1000 items in 2012. I have no idea if this is feasible or not, but our first donation of the year consisted of 64 items. And as my husband put some shirts in the donation pile recently he told me that “here are 4 more things for the challenge.” So I guess it’s on!
• Input information into It’s Deductible after each donation. I’ve never found it overwhelming to do it all at tax time, but I only declutter and donate a few times a year. I will probably feel differently when I have a dozen or more donations to input all at once.
• Pay more attention to the tax savings. It sounds like Sharon’s family is getting their money back in the form of a refund. How awesome would that be? We’re self-employed so any “refunds” we get go right back to the IRS as prepayments on next years’ taxes. But having the higher tax burden of being self-employed means we’re always on the lookout for ways to shave our tax bill so I’ll be paying more attention to that tax savings feature in It’s Deductible.
• Take a picture of each donation before it goes out the door. For both documentation and motivation purposes.

Do stories like Sharon’s inspire you? Are you doing something similar? Let’s talk about it in the comments.

Tagged as: Decluttering, Found Money