Do you have more possessions than closet space in your current living situation?
You’re not alone. Some industry surveys indicate that as many as 1 in 3 Americans are currently using a storage unit.
But should you be?
These rentals can do some real damage to your wallet. One source cites a national average cost of $132 per month, which adds up to more than $1,500 per year! Many people renting larger units are paying well in excess of that number.
Money expert Clark Howard says this problem is uniquely American. And storage unit rental companies know it.
“We Americans love to shop. We’re not great savers in America, but we’re good shoppers,” Clark says. “And so we end up with things that we find we can’t part with.”
That leaves those rental companies with all the leverage when setting your rental rate.
And the games they will play with your monthly rates will leave you pulling your hair out almost as soon as you finish unloading your excess possessions into the unit.
You rent a truck, unload your stuff, and they gamble that you won’t want to come back and move it again when they increase your rental rate just a few months later.
If you’re renting a unit, Clark has been in your shoes. Sometimes life circumstances necessitate the use of a storage unit. But the key is to make it temporary.
In this article, we’ll share some tips for getting in and out of a storage unit as quickly and as cheaply as possible.
Real Talk: Do You Actually Need That Storage Unit?
Many people may have a short-term need for a storage unit, but few should use it as a long-term solution for space.
Clark is concerned that you may end up on the wrong side of the storage unit game financially if you stick with them in the long run.
Setting the sentimental attachment to your belongings aside, it’s a simple math equation that boils down to this:
“The thing about these storage units is a lot of times we end up spending more in rent over time than what the items in them are worth.”
If you’re paying thousands of dollars to store items worth hundreds, we can all agree that’s a poor long-term financial decision.
There are many valid reasons to have a storage unit, such as:
New home or relocation
Job loss
Marriage
Divorce
Parent moving into home with adult children
Addition to the family with new children
Clark says these major life events may justify a storage unit, but only as a temporary solution.
Why Clark Suggests Annual Rental Agreements When Available
If you find yourself in one of those situations and know you’ll need a storage unit for the better part of a year, Clark says you should look into an annual rate.
He has 3 big reasons for this:
The per month pricing should be cheaper with an annual commitment.
It will help you lock in cost certainty and avoid the tricky price increases many rental businesses try to implement a few months into your stay.
It will put a “deadline” on your temporary investment in this storage space. You won’t want to pay the rent increase when your 12 months is up, so use it as motivation to get out of your space by the expiration of your contract.
If you find yourself paying for a storage unit for more than a year, you may need to consider downsizing your belongings as a long-term solution.
Downsizing Help: How Clark Howard Reduced His Belongings
A few years ago, Clark and his wife decided to downsize from their house to a condo. That meant there would not be enough space for many of their possessions in their new living situation.
Time to downsize.
Clark said they set up a compartmentalization system in one of their hallways leading to the garage to start the downsizing process.
Each sign had a destination, and as they cleared out rooms, they’d place items under those signs to be taken out the door to their next destination.
Those included labels like:
Donate to charity
Gift to friends/family
Place for sale in yard sale/local marketplace
Recycle or trash
This allowed for time-saving organization and stress-reducing clarity as they tried to pare down their possessions.
Clark said that, even with his downsizing plan, he initially failed to clear out enough items to avoid renting a storage unit.
But he did follow his own advice in locking himself into an annual rate for his unit while he tried to find a new home for the items inside.
He said he “failed” to meet his 12-month deadline and had to pay month-to-month for an additional four months while he finished clearing it out, but was glad that he saved money on the front end with the annual rate.
The lessons from Clark’s downsizing experience that are applicable to all of us:
Start with a labeling system to gain clarity on destinations for items
Get rid of as many unneeded items as you can
If you’re stuck with a storage unit, set a timeline for getting out
Lock in cost certainty via annual agreement if you’re going to be in the unit for 12 months
Do you have a storage unit experience? We’d love to hear about it in the Clark.com community.
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