personal finance

Do you own your belongings or do they own you?

A while ago I had a small extension built on my home. Because the property is listed, I had to use reclaimed bricks in keeping with the main building. After a long search I bought several pallets of bricks that matched, but at a high price.

When the work was completed we were left with about 300 unused bricks, neatly stacked to the side of our driveway. I resolved to sell them online, as I knew there was high demand. Four years later the bricks remained stacked in my driveway, covered in leaves.

A recent estimate suggests that the average household has £3,000 of possessions it no longer wants or needs but which could be sold easily online and turned into cash.

I suspect the value for many Financial Times readers could be higher.

Whether you sell via an online marketplace, garage sale or a car boot sale, trading in unwanted stuff is likely to deliver far more than some welcome extra cash. The process of decluttering your house and regaining a sense of control can be cathartic.

Getting rid of some possessions is only the start, though. Questioning why you buy what you do, what needs you are trying to meet, the emotions that underpin those buying decisions and the effect it has on your overall wellbeing will help you avoid replacing what you discard with new stuff.

The non-essential things on which we choose to spend our money don’t just affect our financial position. They also affect how we feel about ourselves and our place in the world.

It is natural for people to imbue some material objects with value and significance, such as gifts of jewellery or ornaments, musical instruments or art. But if possessions lead to possessiveness, that can cause us to fail to see what is really important in our lives.

Beyond the essentials of living, we make many of our discretionary spending decisions to satisfy an emotional need, one of which may be to seek the approval of others or a desire for status. A number of studies suggest our moods influence buying decisions: we may buy on impulse because we are bored or sad. Companies’ marketing strategies play on these emotions to get us to buy products.

With a new model every year, smartphone manufacturers want you to feel the need to upgrade. Fashion trends are propagated to motivate you to buy clothes and accessories you don’t really need. Car advertisements stress status, control, freedom and style rather than the financial drain that is the common reality of car buying.

The Roman philosopher Seneca suggested that people should mentally rehearse losing everything they own, so as better to recognise the value of their possessions. He also suggested living like a pauper for a period of time in order to rediscover a sense of perspective on life.

We don’t need to follow Seneca’s advice to the letter — but to regularly take stock of what you own and value most in life can help you to make better spending decisions.

Another mental exercise has been suggested by the US philosopher William Irvine: imagine that the world has suffered a calamity that means you are the only person left.

The good news is that everything is still working. You have access to energy, food and well-stocked shops. Assume that you can get over the loneliness. How would you live your life? Would you still wear jewellery, buy beauty products, drive an expensive car, wear designer clothes and post pictures of your latest escapades on Facebook?

The point of this thought experiment is to question your spending motivations and values. Whose dream are you living — yours or other people’s? And more importantly, is it fulfilling for you?

A few years ago the singer Rihanna had a high-profile legal spat with Peter Gounis, her former accountant, in which she alleged that his poor financial advice led her to the brink of bankruptcy.

Mr Gounis countered that the singer’s shopping sprees and lavish parties were the chief drain on her money: “Was it really necessary to tell her that if you spend money for things you will end up with the things, and not the money?” he said, before the two settled the case.

Taking responsibility for our spending is the key to controlling it and making better daily money decisions.

Even if you use an accountant or financial adviser to help manage your money, remember that no one will ever care as much about your financial wellbeing as you do.

I’m not perfect when it comes to spending money but I’ve developed a great awareness of what is important to me, and my money strengths and weaknesses.

This has helped me avoid defining my happiness and status in terms of what I own and more by who I am, what I do and the quality of my personal relationships.

As for that pile of bricks, I’m pleased to say that I recently sold them online for a decent price. Both my driveway and my mind are clear. 

Jason Butler is an expert on financial wellbeing Twitter: @jbthewealthman


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