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Dub, think of the concept. Only have what you can keep in the house you already have.
Miss Moneybags Facing the worst economy since the Great Depression, one woman decides her bank account needs a bailout. The Solution: Save $100,000 by the end of the year. The Problem: That's more than her yearly salary.
Recently I did an intervention on Sarah, one of my dearest friends. It wasn't the first time. Over the last few years I have unsuccessfully attempted to get her to seek help for a problem that has cost her conservatively $48,000 and put financial and emotional stress on her family.
Recently, after more than five years of trying to manage her problem, she finally hit rock bottom. She once again had to borrow money from her family -- this time to pay for her daughter's health care. Sarah had $800 of the $900 doctor bill in the bank, but she'd already earmarked that money for the horrible monkey on her back. Sarah has a substance abuse problem -- but not with drugs. Sarah has a problem with self-storage.
Sarah used to have financial stability. But five years ago she made a major life change when she decided, at age 40, to adopt a child and become a single parent. Sarah sold her beautiful 3,000-square-foot home so she could afford to quit her high-powered job and be a stay-at-home mom until her daughter could start preschool. She moved into a 1,200-square-foot apartment in a good school district.
This was all part of a good, long-term plan.
Unfortunately, she then made what became possibly the worst financial
of her entire life: She put the 1,800 square feet worth of possessions that didn't fit into the apartment into self-storage.
Similar to a technique drug dealers use to reel in future customers, the storage company offered Sarah, a first-time user, free product to ensure her loyalty. Convinced that she would be able to sell, donate or otherwise dispose of her extra stuff during the "first 30 days free rent" period that her storage company offers to all new customers, Sarah moved her designer guest-room furniture, her Christmas decorations, her art collection, etc., into four of the cheapest storage units available.
"I'm just going to use this as a staging area to get organized," she told me at that point in time. "That way, I'll have four weeks to figure stuff out and won't have to make any financial decisions about what to get rid of under duress."
She never moved out.
Although she has plenty of very valuable things in storage, as we surveyed the contents of one of Sarah's units earlier this week she finally did the math. Even if she pulled everything out of the unit and set it on fire in the parking lot, it would still be a better financial decision than keeping it in storage for another month. Five years x $200 a month per unit x four units = $48,000.
And that total doesn't even account for the money spent on gasoline to get her to and from her storage or all the late fees she's paid on other bills because she chose to pay her storage bill on time so her stuff wouldn't be seized for nonpayment. The phone company can turn off your service, but the storage company can auction off your dream diary, fake IDs, and herpes medication to the highest bidder.
Although Sarah's situation may be the worst that I know of personally, she's hardly alone. According to the Self Storage Association, 50% of storage unit renters are storing what won't fit into their homes. One out of every 11 Americans rents storage.
Watching Sarah's horrible journey has made me realize that although self-storage (like easy credit) can be beneficial to a percentage of the population, it's a pact with Satan for many folks who don't have an iron fist over their finances or excellent time-management skills. Quite simply, it's bad on several fronts.
Self-storage is a bad investment. I called four different storage companies with units in my area of Los Angeles. The cheapest price for the smallest storage space, a 5-by-5-foot unit, in my neighborhood is $67 per month. The first month costs just a mere $1, but that's not counting the one-time-only $22 "administration fee" that they'll also tack on to the first 30 days.
Although all those numbers sound doable financially, if I rented this space, I'd be out a whopping $760 in the first 12 months, all to rent a space that's the size of my laundry room. In other words, stuff that isn't functional enough to put in my house and use every day would become more and more expensive with each passing year.
(On a side note, I had to hang up on three out of the four storage sales reps because I was getting such a hard sell. They continued to demand my personal information even after I'd told them that their rental prices were beyond my budget.)
Self-storage can lead to overconsumption. Self-storage is like diet food. It fools the mind by fooling the eye. If your clutter isn't visible in your house, do you really have a spending problem?
The first self-storage facilities were built in Texas in the late 1960s. It took 25 years to build the first 1 billion square feet of storage. But it took just eight years (1998-2005) to add the second billion. According to theNational Association of Home
, the average 1960s home was 1,200 square feet. In 2004 the average home had ballooned to almost twice that size to 2,330 square feet.
Bigger houses are harder to fill up, which may explain why Americans buy twice the number of consumer goods than the citizens of any other First World nation. (OK, so we're a geographically huge country, but if we've got such big homes, why do we need an additional billion square feet of storage space?) The environmental cost of creating, transporting and finally housing 2 billion square feet of unused possessions is mindboggling.
Self-storage can waste time as well as money. Self-storage companies count on the basic physics of human laziness, that is: Objects at rest remain at rest ... in storage. After all, who wants to spend their precious free time digging through boxes looking for stuff? Sarah, in her efforts to deal with her storage problems, has spent hundreds of hours "organizing" her stuff in storage, attempting to repack it more efficiently so she can scale down to smaller, cheaper units.
Self-storage is urban blight. In all fairness, one of the storage companies in my area is housed in the hollowed-out facade of an Art Deco office building, so that's quite pretty. But for the most part, self-storage facilities are architectural monsters. In addition to being ugly as sin, they bring in few jobs or sales tax benefits to the community, compared with other structures of similarly huge proportions.
Self-storage can keep you from living in the moment. There are certain groups of people -- like those who live on sail boats or the newly moved -- who can follow their dreams because they can temporarily stash their possessions in storage. Storage gives them the wiggle room to experience life without being connected to personal belongings. For more than half the storage renters, however, this is simply not the case.
Once a month, one of the storage companies in my neighborhood holds an "estate sale" where the owner of the company sells off the contents of units that were seized for nonpayment of rent. What odd, desperate or lazy story is behind this lapse of judgment? Why the renters failed to move their possessions out of storage before the rent was due is always a mystery. What tales of woe are behind the abandoned photograph albums, bronzed baby shoe ashtrays or the hand-embroidered vintage napkins? Why weren't these items, so obviously full of sentimental value, kept in the home where they could be used and admired?
A clearer narrative about why items were acquired is visible from a lot of the sale merchandise, however. You can almost hear the nagging spouses behind the half dozen exercise bikes and ThighMasters for sale each month or the siren call of Martha Stewart behind the hundreds of half-finished craft items.
Whether they are nostalgic artifacts from the past or wishful self-help tools for the future, none of these objects relate to the present-day lives of their former owners, which is probably why they were put in storage to begin with. These monthly sales are sad museums, a collection of failed ventures and unfulfilled dreams of what could be.
As with every successful product, self-storage provides a powerful storyline for the consumer to buy into: that preserving memories of the past or the potential of the future through material goods is valuable. For the past five years, Sarah has denied the chaos that keeping so much stuff in storage brings to her daily life. Her dream of returning to her former standard of
in the future has cost her the very security she wants for her daughter and their quality of life today. That $48,000 could have gone toward her daughter's college fund. It could have paid for a lifetime of vacations. It could have been a down payment on a house.
Up until she hit rock bottom, I think Sarah actually believed that she would one day find her way back into a big house in the hills, even though she's a self-employed single parent facing a global financial downturn. As I photographed her possessions to list on Craigslist, she fretted about selling her formal dining room set, because she wanted to pass it on to her daughter as a family heirloom. That her daughter, who is in kindergarten, might not like the style of the set as an adult and would have no emotional connection to an object that she'd only ever seen in storage, never crossed her mind.