The dubious value of stuff

By Slow Dad - February 06, 2017

What is the actual value of your material possessions? How many of them would you replace if lost or damaged? Budget a 15% portion of this annually.
We all choose to surround ourselves with stuff.

Minimialists strive for a little, hoarders strive for a lot.

We need a certain amount of possessions to be comfortable, however that quantity turns out to be surprisingly small.

Nobody would argue that homeless people do it pretty hard. Yet backpackers have the time of their lives, carrying all their possessions in a back pack for often extended periods of time.

There was a maxim in the Jockey Club youth hostel, located high on Hong Kong's Mt Davis, that you only needed two sets of clothes: “one to wash, and one to wear”.

Backpacker maxim: you only needed two sets of clothes: “one to wash, and one to wear”

My boy scout troop leader used to claim that you could get four days out of a pair of underpants: “frontwards, backwards, turn them inside out and repeat.

Strangely neither backpackers nor scout leaders ever seem to be overly troubled by people wanting to sit next to them on public transport. Coincidence? I’ll leave you to decide!

How much is your stuff actually worth to you?

One thing we seldom give much thought to is how much our collection of stuff is worth to us.

By this I don’t mean the priceless memories contained in childhood photo album or items that may retain a certain sentimental value.

Rather I want you to think about the cold hard cash value of all your material possessions.

The only time most of us give this even a passing thought is at the time of year we renew our home contents insurance. The logic behind this insurance is that in the unfortunate event of loss from a burglary or house fire the insurance company will help us get back on our feet. Some policies offer a “new for old” replacement, others pay out a lump sum up the declared value of all your insured possessions.

However I challenge the validity of this number serving as an accurate proxy for the actual total value of all our material goods.

There are two reasons for this:

Firstly many of us picked an arbitrary number when we first took out the insurance, often many years ago. We’ve contentedly paid the renewal on autopilot each year without giving much thought to what the replacement cost of our collection of stuff would actually be. The premiums will have gone up each year, but the total sum insured probably won’t have moved much if at all.

Secondly the truth is we simply wouldn’t elect to replace many of the things we currently own were they to be lost or destroyed.

How can I say this with such certainty? I know from personal experience.

A real life accounting

I have undertaken five, count them five, self-funded international relocations.

Each time this has involved getting a collection of removalists in to provide quotes on what it would cost to pack up, move, and unpack all my material possessions. The quotes inevitably provoke a horror-stricken response, followed by much culling and (mostly unsuccessfully) trying to sell household items on ebay.

The next question the removalists ask is what items need to be insured, and in each case how much should it be insured for.

This is a very enlightening exercise.

It will cost money to retain items and move them to the next country. The larger the item, the more it costs to move, as international moves are charged based on the square footage involved… much like renting a home.

It will cost even more money to insure an item.

international moves are charged based on the square footage involved

Consider your collection of books and DVDs. Would you pay more money to insure them? Probably not. Would you bother to replace them if they were lost or damaged? Probably not. Would you even miss them if they were gone? Probably not.

What about all those boxes of clutter in your garage or attic or basement? I doubt it.

Your slightly secret hoard of expensive shoes that you hid the true cost of from your spouse? Your designer handbags? The drawers full of partially used cosmetics? All those Xbox games? That collection of sporting equipment gathering dust in the cupboard under the stairs... tennis racquets, golf clubs, football boots, and so on?

How about seldom used items from your kitchen, garden shed, or garage? They are handy when you need them, but would you pay more money to ship and insure them someplace else? Unlikely.

Next consider some more controversial items. Your kid’s have a much loved and regularly used collection of Lego. You acquired the collection one £20-100 kit at a time over a series of Christmases and birthdays. However if you check on ebay, second hand Lego is sold for less than £30 per kilogram. So how much is their collection actually worth to you? Probably not enough to bother insuring it.

Your wedding dress? Your high school sporting trophies? That ugly solid wood sideboard you inherited from your grandmother? They may have much sentimental value but very little tangible value, and you wouldn’t bother replacing any of them.

The final list of items you would actually bother insuring during transit is surprisingly small. The replacement values you have specified are what you are asking the insurance company to reimburse you should the boat carrying your possessions sink along the way. The rest of your stuff you are effectively saying you don’t care enough about to worry about replacing it should the need arise.

So what?

There are two lessons here.

Firstly, take note of this number.

Your annual household budget should include a line item to cover a proportion of the replacement cost of these items. Personally I budget for 15% of this amount each year, to cover the inevitable replacement or repair costs for my household contents.

Secondly international moves are traumatic, terribly expensive, and much like a visit to the proctologist… possibly good for you in the long run, but uncomfortable to experience first hand.

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  1. Thank you for a thought invoking post! I do have boxes which still remains unpacked from my previous home, just never got around to dealing with them. Having said that, books is rather a good case. Ever since I start using Kindle, I am finding books to be more of a hassle to deal with since they takes up more space than I can spare!