Take an Imaginary Do-Over


Imagine everything you owned was lost in an insured catastrophe. Your debts were paid, and you had a lump of cash big enough that you were left — financially — in about the same position you're in now, but you had no possessions except the clothes on your back, a small box of your most precious mementos, and a USB drive with all your photos.

Go through the mental exercise of figuring out how you'd deploy that cash to best satisfy your needs and wants. (See also: The 4 Most Common Unnecessary "Needs")

The Exercise

Start with the little stuff:

Your Furniture

For a lot of people, this is the most fun category, because a lot of people bought cheap crappy furniture so they wouldn't have to sit on the floor, and then found themselves stuck with it — because who can afford to replace perfectly good furniture just because it's cheap and crappy?

Your Wardrobe

How much is stuff you wear every week? How much is special-purpose (swimwear, interview clothes)? How much is too big, too small, or just not quite right?

Your Tools

How many are for sports or hobbies you've abandoned? How many are duplicates because your spouse also had one, or because you couldn't find the one you had when you needed it?

Your Dishes, Pots, and Pans

How much of your kitchen and dining utensils only get used for two meals a year?

Then go on to the big stuff:

Your Transportation

If all your vehicles were gone, what would you replace them with? If you can get by with one less vehicle, you can save a huge amount of money — it costs over $8,000 a year to operate a car.

Your Residence

If you've just lost all your stuff, you probably don't need as much room. If that means you could fit into a smaller house, an apartment instead of a house, or a smaller apartment, that could save you a huge amount of money. More importantly, it could go on saving you money for years to come — lower taxes, less maintenance expenses, lower insurance premiums, smaller monthly payments, etc.

I wrote a lot of posts back in 2007 and 2008 trying to convince people that houses were a poor investment. (For example, Renting Is Cheaper, Your Equity Was Always Imaginary, and What Your House Is Really Worth.)

That's not such a hard sell now as it was then. A lot more people are ready to think of their residence as a place to live, rather than imagining that it's an investment.

The Reality

Some people enjoy going through this mental exercise. Imagining that you could wipe away all the errors you've made in accumulating stuff that you don't need is fun. But it's still a fantasy. The reality is tougher. Most of your stuff couldn't be sold for anything like its replacement cost. (And nobody's life is so bad that it'd be improved by going to jail for insurance fraud.)

But I think the mental exercise of imagining what you'd do is still worthwhile, because it's a way to understand what you really want.

If you understand what you really want, you can make progress toward it, even if you can't take the big leap of replacing all your stuff with cash. If you know you'd like to move to a smaller place, you can prepare by getting rid of clothes you no longer wear and hobby gear you no longer use. Over time, you can downsize your footprint enough that you'd fit in that smaller house. In the meantime, you get to enjoy a more relaxed, less cluttered house.

The reality of losing everything you own would suck. It would be very different from the fantasy of freedom it provides.

But you have something even better than the fantasy of freedom. You have actual freedom. Granted, if you have a lot of money invested in stuff that you couldn't possibly sell for what you paid for it — or worse, if you've got a car that's worth much less than what you owe on it, or if you're way underwater on a mortgage — there would be a cost to actualizing that freedom. But much of that cost could be recouped in fairly short order, if your imaginary do-over life were cheaper than the life you're living now.

Once you start imagining that life, you can start taking steps to prepare for it, and pretty soon after that, you can start taking steps to move toward it. Fantasies can come true in the best way.

As one of the early steps, I suggest that you create that thumb drive of your photos, because fantasies can also come true in the worst ways.

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Guest's picture

I think the strongest outcome of the exercise is identifying what stuff you don't need, which the author doesn't emphasize enough. Often there is much unneeded and unwanted stuff in a home that can be sold without directly replacing it. In this case the money can be used more flexibly or used to replace one of those items you need but want a better version.

I've been selling about half of our books so that we can make room and afford baby stuff. Major life changes are a great kick in the pants toward clearing away stuff and starting over.

Philip Brewer's picture

I wish I'd sold more of my books years ago. At the time, we had three bookstores in town that paid cash for books. Now we're down to just one, and it's not buying most of the time.

Guest's picture

I always love your articles, Philip. A variation of this exercise is something I always keep in mind when trying to declutter anything...closets, art supplies, etc, etc. Thanks for the reminder to keep preparing for the life I want. :)

Guest's picture

Love this idea! I use it when decluttering. It's not useful for things that can't be replaced (i.e. photos), but it works for most household items. Just reframing the question from "should I get rid of it?" to "would I replace it if it were lost/destroyed/stolen?" helps me let go of stuff.

Guest's picture

My fantasy is to move into a new house and go through our current house, selectively deciding which items get to move with us, then walk away and leave all the rest behind.
We'd end up living in a fairly empty house, lacking some things that we need, such as dressers, because no way I'm I moving these! And the current house would be left with lots of stuff...

Somehow that's easier than looking at things in your current space and making the decision to get rid of them.

Lots of people I know had your version of the fantasy come true during Hurricane Katrina, whether they liked it or not~! It did work out well for some people who had insurance, and not well for others.

Honestly, if I could get out the sentimental items that I love, the rest wouldn't matter much. I do have some items I'd hate to lose, special cards & gifts from my sons and some of their childhood things that are irreplaceable. Anything that can be replaced with cash is expendable, provided you get the cash to replace it, of course!

When we evacuated for Katrina I took a ton of stuff I'd leave behind now, knowing I'd have the insurance money to replace it. If we ever evacuate again, it will be only the sentimental items I take and the ones necessary for work & communication (phones & laptops).

Guest's picture
Matt Tewes

I really enjoyed this article, I know that I always love getting rid of "stuff" that I don't need. The hypothetical that you use is an interesting one and it really got me thinking about what I really "need." Thanks!

Guest's picture

I never thought about this until my aunts house was struck by lightening and burned down. Now I send my pictures through shutterfly so that they can store them for me too in case of an emergency. What really sucks though is that she had to fight her insurance company for over 4 years and still was never re-imbursed for the contents of her house. She lost her stuff and had to buy it all again out of her own pocket.

Guest's picture

This past week I've been taking a look at all my stuff and wondering what I really need and what I can do without. I think it's time to make some donations!