BeforeYourNext Birthday-DeniseFisher’s Blog

Get fit, get organized, & get your financial affairs in order

Posts Tagged ‘assessment’

Getting Your Financial Affairs in Order – Organizing a List into Categories

Posted by denisefisher on November 7, 2010

Organizing the List

Having written a list of everything financial I could imagine wanting to organize (in my previous post), getting my financial affairs in order still seems a bit overwhelming and without an identifiable course of actions. So I grouped my financial issues into categories, and was able to pinpoint the category with the highest priority for action.

Now all this planning and writing about how to get things in order may not seem like the most effective way to get things done, but I’ve found that thinking about what I have to do is part of the process.  And separating the thinking from the doing allows for focus and keeps me from second guessing whether or not I’m working on the right task.

After some thought and some editing, and an attempt to list these categories in order of priority, I ended up with 13 categories. This is how my organized list turned out:

Imminent Issues & Recurring Events

  • Timely financial follow-ups
  • Bill paying procedure
  • Eliminate recurring costs, avoiding penalties
  • Not giving away time, services, or reimbursable expenses
  • Leaving money on the table
  • Maximizing income
  • Additional sources of income

 

Getting in the Financial Mindset

  • Read, watch, listen to sources of financial information
  • Identify books, publications, online sources, radio, TV, podcasts to follow, courses to take, discussions to have, materials to use, experts you trust
  • Establish routines, times, goals for keeping up on financial issues and news topics
  • Create a plan of what to do, where and when to do it, and an estimate of how long it will take
  • Adjust your plans and timeframes, as your financial organization progresses
  • Allow time for research, decision-making, and breaks to catch up on your plan

 

Big Picture Assessment

  • Net Worth
  • Credit reports and FICO score
  • List of all assets, debts, accounts, terms, beneficiaries

 

Back-up Plans & Getting Ahead of the Game

  • Emergency savings
  • Payback strategy
  • Maintenance/repair/remodel/replacement plan

 

First Steps of Estate Planning

  • Will
  • Revocable living trust with incapacity clause
  • Advance directive & durable power of attorney for health care
  • Updated list of beneficiaries

 

Record Keeping & Filing (including setting up a filing system)

  • Identifying all areas of finance and other important papers and things to file

 

Financial Review of Things Already in Place

  • Retirement
  • Savings
  • Spending Patterns
  • Loans & Credit
  • Investing
  • Real Estate
  • Insurance
  • Estate Planning
  • Taxes
  • Recurring auto payments and deductions

 

Identify what needs to be changed, added, and eliminated

  • Note the obvious and the things you don’t know
  • Research or consult to help make your decisions
  • Define how to make these changes and what steps need to be taken

 

Goals & Policies

  • Gift Giving
  • Housing/Real Estate
  • Savings for College/Education/Training (self or others)
  • Retirement Plans
  • Travel
  • Next Career or Business Plan
  • Purchase Plans & Wish List
  • Borrowing/Debt Policy
  • Net Worth Goals
  • Integration of Other Life Goals with Financial Goals

 

Automating Finances

  • Savings
  • Payments
  • Retirement Funds
  • Tracking Expenses & Financial Status
  • Paperwork Management & Tax Records
  • Inventories of possessions
  • Financial Review Plan

 

Finding & Using Financial Professionals

  • Tax planning
  • Purchase plan
  • Inventory documenting all possessions
  • Tax planning, record keeping & filing
  • Paperwork management

 

Revisiting the Topic of Additional Sources/Streams of Income

  • Insurance assessment (including Long Term Health Care)
  • Financial goals (and integration with other life goals)
  • Electronic financial record keeping
  • Borrowing/Debt policy
  • Financial review plan

 

Integrating Other Aspects of Your Life Plans (Get Fit, Get Organized, and Get Financial Affairs in Order)

  • Purging, liquidating, consolidating, and reorganizing your stuff
  • Planning meals, food purchases, and food inventories that support your budget & health
  • Making choices about your lifestyle and activities that support your financial goals
  • Teaching your children or other family members responsible financial management

 

Next Steps – What, Where, and When

My next step will be to identify specific concerns that fall into the first category – Imminent Issues and Recurring Events. I want to rank them into a prioritized list so that I can tackle them completely, one at a time. Working “at” a task isn’t usually the difficult part – it’s FINISHING that’s the toughest. But finishing is what needs to be done to get results. The “where” and “when” of my next step will follow my previous weekly routine. Weekly progress may seem like a slow pace, but it IS progress, and it’s realistic for me. So that’s what I’m going with for now.

  • What: Identify my imminent financial issues, and recurring expenses, and put them in writing
  • When: Sunday, 11 am – 2 pm
  • Where: My designated work table (this is a clear space away from my usual desk, where I know I will get things done – you should try to find such a place for yourself, if you don’t already have one)
  • Pre-planning task: Scan through financial files and paperwork no later than Saturday evening for reminders of pressing matters, making notes as needed
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Getting Your Financial Affairs in Order – Where to Start

Posted by denisefisher on October 21, 2010

Financial Plan There is one main reason why people do not have their financial affairs in order: it’s easier NOT to do it. It’s a task that can be overwhelming because there’s no instruction book, no deadlines, and no starting point. And everyone’s situation is different.

So, right here, right now, I’m going to create a starting point, put together a customized instruction book and action plan, and establish deadlines and timeframes.

The Starting Point – Choose a Model and Built on It

I am using the Suze Orman’s Action Plan as a starting template for my project of getting my financial affairs in order. Another resource that I like is Dr. Lois Frankel’s book Nice Girls Don’t Get Rich. By using these books as guides, I can write out a list of financial categories, add more specific tasks, and put together topics that will be used in my plan of action. So my starting point is to identify what is in the plan that will make me feel that my financial affairs are in order.

Put Together a Customized First Draft List

I started by just listing everything financial that came to mind (either from reference sources, or my own experiences), focusing on things I knew I needed to include for organizing my financial affairs. Consulting the suggestions of experts will help you identify the financial issues you haven’t thought of or don’t know enough about. I used the Table of Contents from the above mentioned books as my first source for identifying financial issues to put on my list. I could skip some of the topics that didn’t apply to me, and I could add other items that came to mind as I read through the contents. I know there are lots of other resources out there with helpful guidelines, but it would be easy to get bogged down in the research behind putting together the BEST plan ever. And I don’t want to do that. This is not a one-time project, and I will revisit this plan later, as situations change, and I have the need to add financial tasks to my list. For now, I will keep things simple, and start with the basics. Here are some of the categories and various items I came up with to start:

  • Credit
  • Retirement
  • Saving
  • Spending
  • Investing
  • Real Estate
  • Additional sources of income
  • Insurance
  • Net Worth
  • List of all assets, debts, accounts, terms, beneficiaries
  • Credit reports and FICO score
  • Bill paying procedure
  • Estate Planning
  • Will
  • Revocable living trust with incapacity clause
  • Advance directive & durable power of attorney for health care
  • Updated list of beneficiaries
  • Tax planning
  • Emergency savings
  • Payback strategy
  • Purchase plan
  • Maintenance/repair/remodel/replacement plan
  • Inventory documenting all possessions
  • Insurance assessment (including Long Term Health Care)
  • Financial goals (and integration with other life goals)
  • Timely financial follow-ups
  • Eliminate recurring costs, avoiding penalties
  • Tax planning, record keeping & filing
  • Paperwork management
  • Electronic financial record keeping
  • Maximizing income
  • Not giving away time, services, or reimbursable expenses
  • Leaving money on the table
  • Borrowing/Debt policy
  • Financial review plan

Next Steps – What, Where, and When

At this point in the process, I started to run out of steam for what I needed to do next – which is to put the list into some kind of order. It took me about 3 hours to put a first draft list together and write it all down. But I also realized that there were next steps that I needed to identify before stopping for the day. I needed to identify what the next task was (organizing the list), including the “where and when” of doing that next task.

Creating a standard default “where and when” for this activity as a project that is repeated on a weekly basis is a good practice. Even when there are interferences that call for skipping a week or implementing an alternate plan, having a “Plan A” to return to provides the structure and continuity most likely to help me stick with this project for the long haul.

“Where”, was relatively easy for me to determine. I have two identified work spaces (depending on which location I’m in) where I know I do my best financial work. I don’t usually have to worry about interruptions from others, though when I have had this issue to deal with, my preferred “where” has been the local library reference room.

The “when” is trickier – things come up which can make it difficult to keep an appointment with myself (including my motivation and momentum, which is not to be overlooked). I first think of how long I will need (and how long I can stand) to work on and complete the next step. Usually two hours is the maximum tolerance level for staying focused on one task, non-stop. But I will allot three hours, because I will also need to write down what I’m doing, and I think it’s realistic for me. I’d like to connect this task with my weekly viewing of The Suze Orman Show, which is on Saturday nights at 9 pm (and which I follow with an hour of watching another financial show – Till Debt Do Us Part, which comes on immediately following Suze Orman). But I know I’m unlikely to be in the mood to work on my project at 11 pm on a Saturday night. So, I will plan to work on this task Sunday, from 11am – 2pm. In preparation for this timeframe, I will make it a point to do some pre-project planning on Wednesday at 7pm. There will be no defined length of time for this planning task – simply reviewing the information I have, and doing any additional work that I feel like doing will be the goal. To summarize, here are my next step details:

· Task: Organize the List

· When: Sunday, 11 am – 2 pm

· Where: My designated work table

· Pre-planning Review: Wednesday, 7 pm

Motivational Task: Watch The Suze Orman Show, Saturday, 9 pm; followed by Till Debt Do US Part at 10 pm.

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What Happens To Your Online Accounts When You Die?

Posted by denisefisher on May 14, 2009

Fortune Cookie of Impending Death Here are some thought-provoking questions that may elicit a sense of uncertainty, if not panic:

  • Do you know how many online accounts you have?
  • Do you have a list of them anywhere?
  • Is that list written or printed out (not just on your computer)?
  • What about passwords to your accounts?
  • Have you informed anyone about your account info, and do they know where/how to find and access it?
  • Where are your digital photos and important electronic documents kept?
  • Where are your purchased music files and other purchased downloads stored?
  • Are your media files and other documents accessible to someone you’d want to have them?
  • What about your private files or accounts – are there any you’d want destroyed or closed without being viewed?
  • Do you have any arrangements made for services or subscriptions that are automatically renewed and charged to your credit card or other financial accounts?

NPR’s program, All Things Considered, did a story on 11 May 2009 about this very topic. Click on this link to read about, or listen to, Your Digital Life After Death.

Over the past few years, several businesses have emerged with online sites and subscription services to deal with the related issues of legal matters, privacy concerns, electronic bequeaths, and designated access, as well as legacy wishes and remembrances.

Listed below is an extensive selection of online resources that might help you in planning the digital details of your eventual demise – they include all of the services I could identify as of the date of this blog posting. I have visited each of the sites to find out what they offer, how their system works, and the rates they are currently charging for their services. The summary descriptions are provided here:

AssetLock.net – This site provides a digital version of traditional estate planning. A template is provided to help remind you of what to include. You can store documents, instructions, and include a listing of accounts and passwords that will be accessible to designated individuals upon your death. You decide who can access which of your entries. There are 3 levels of services and pricing: 20-100-unlimited entries; 20MB-1GB-5GB storage; annual fee of $10-$30-$80.

VitalLock.com – This site describes itself as being in the “Alpha” stage of development and is not yet active.

LegacyLocker.com – A seemingly well-developed service and clearly, the most widely promoted system of its type, this site requires users to designate beneficiaries for their information as well as verifiers of their death. One of its defining criteria is the human oversight element, which requires that a human being provide the company with a death certificate before it will release information or access to the designated beneficiaries. There are 2 levels of services and 3 levels of pricing: the free account includes 3 assets, 1 beneficiary, and 1 legacy letter; the premium service includes unlimited assets, beneficiaries, and letters, and can be paid by a $30 annual subscription or a one-time fee of $300.

SlightlyMorbid.com – This site’s purpose is to send messages or notifications to your online friends in grave situations (not just the situation of your death). Plans are priced as one-time fees, which is described as being similar to the way you would pay for someone to prepare a will. It covers situations of death, natural disaster, accident, serious illness, or whatever you specify. You designate one trusted friend (or up to 5 or 10, for premium plans) and that friend will send out a message to 10 (or 30 or 50, for premium plans) of your online contacts to notify them of your condition, based upon messages you have written in advance. Your trusted friend cannot view or change the messages – they can only activate their delivery. Changes and updates are free for 3 years; after that, changes can be made with a small update fee. The one-time set-up fees are $10-$20-$50.

GreatGoodbye.com – This site’s tagline is “e-mail from the grave.” Its service allows a trusted person with activation codes to send out your final e-mail message with a photo attachment upon your death. When the trusted person activates the process of delivering of your message, a notification is sent to your e-mail address and you are given 21 days in which to cancel the ultimate delivery of your message(s).  I suppose this is in case your trusted person makes a mistake, becomes no longer trustworthy, or you make a miraculous unexpected recovery. Premium packages can include audio or video attachments. There are 4 levels of services and each service has the option of an annual or one-time fee: 1-3-10-500 e-mails; yearly fees of $10-$20-$36-$50; one-time fees of $39-$87-$150-$219.

MyLastEmail.com – This site’s service is basically an online memorial page that you set up in advance, and is made accessible upon your death. The free service includes the posting of 1 document, 1 image, 1 video, and notification of 2 recipients. Premium packages are mentioned on the website, but apparently are not yet available.

YourPersonalScribe.com – This service is unique in its personalization of creating your life story. Sharon Scribe (yeah, that’s who provides this service) writes your personal obituary in advance, with your help. She uses a questionnaire followed by a personal interview with you, as well as interviews with close family members, friends, and colleagues, to prepare your life story. I don’t know what will happen when Sharon Scribe dies, but she also writes wedding toasts, poetry, and tributes for other special occasions in one’s life. The base rate for this service is $300, but has some flexibility for lower income clients.

Deathswitch.com – This site’s model has a very futuristic sci-fi feel to it (even the audio you hear when the page opens or when you roll over a link is very space-age sounding). They call it information insurance. I’d call it a life-watch service. It’s very different from others in that it does not require you to designate a trusted person with the responsibility for initiating the services upon your death. The website summarizes it nicely as “an automated system that prompts you for your password on a regular schedule [at intervals designated by you] to make sure you are still alive.” If you do not respond to multiple follow-up prompts, pre-scripted messages are automatically e-mailed to your named recipients. The company encourages you to test out the service by having the death messages sent to yourself. If for some reason you did not reply (but are still alive) you will get a preliminary message allowing you to click a link that says “Wait I’m still alive!” You can set up a free account that will send your message to 1 recipient with no attachments. The premium account sends up to 30 different messages to up to 10 recipients each (300 recipients total). I could not find the rate information for premium accounts on the site, but an Associated Press article about this service mentioned that it was $20/year.

I scanned through my hand-written list of online accounts (I have 7 pages worth) and found these representative accounts among my listings:

e-mail accounts AOL, Yahoo, G-mail
social networks Facebook, Twitter, Linked In
financial accounts credit union, bank, mortgage company, Visa, home equity line of credit
investments/retirement Thrift Savings Plan, brokerage accounts, retirement account
travel-related sites frequent flier miles, Travelocity account
merchandise accounts Amazon, PayPal, ebay, iStockPhoto, iTunes
image/video/communications Flikr, YouTube, Skype, Oovoo
recurring/renewable payment accounts Verizon DSL service, AOL internet service provider, Corporate Housing ad, GoDaddy domains, Franklin County property tax

My listing will probably remind you of some of your accounts that need to be considered in your planning arrangements. If you prepare and store documents or photos online (also referred to as “the cloud”) you need to take these files into account too. It’s not much of a virtual leap to go from the cloud down to earth and onto your computer and hard drives. You’ve got a lot of information on your computer to consider in your planning too.

These aren’t just issues to consider in anticipation of your death. With so much information being stored electronically, you’ve got a lot of digital eggs being kept in various compartments, but all in one basket.

Have you ever had your computer crash or had your computer lost, stolen, damaged, or destroyed? I have. And so have lots of others. Find someone and ask them about it – they’ll tell you what it was like. When my computer was stolen, the most devastating loss was my collection of family digital photos. The thief could’ve had the computer. I just wanted the files. I had some of the files printed or stored elsewhere, but most of them weren’t backed up, copied to others, or printed out as photos. They were gone forever.

Don’t be lulled into a false sense of security by thinking you’re covered because you back up your files onto an external drive or some other media. If someone breaks into your home and steals your computer, and the hard drive or other media is stored nearby, they’re going to take them all. Same thing for a natural disaster. A fire, flood, electrical- or wind-storm comes along and all your electronic equipment and storage media is likely to suffer the same fate. Ask the victims of Hurricane Katrina.

You’ve got options for saving your data and planning for access and/or deletion of your online accounts, but you have to put the plans in place now. You may not have the advance notice of your impending death in which to take care of these preparations. And even if you do, will you want to spend the remaining months of your life getting your accounts and online documents in order? Will you even have the energy or ability? Think about it, make a plan, and take some preliminary action to get things started. It’s better than doing nothing.

Here’s a closing thought: You can put together your own service plan – a simple, low-tech version of the packages mentioned above. But you actually have to do it. If paying someone else will get you to take action, it would be worth doing that. Even if you start out with a free online plan or put together a paid premium plan for one year, you’ll have organized your information and considered the details of your arrangements, and would be able to cancel your service after a year, by switching to your own at-home version. Enlist another family member to take on this task with you. They need to do it too, and may not have thought about it or started it either. Use the power of partnership and accountability to get your affairs in order.

(Editorial note: for any of you who may be wondering about my previously mentioned grand finale of wardrobe organization, I am in the process of completing and editing it. It’s very long and detailed, even more than my usual posts. So it may be published in a format other than a blog post. Updates will follow.)

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What To Do With Clothes You Don’t Wear

Posted by denisefisher on April 17, 2009

Thrift Store Clothing Display Purging one’s possessions is not as easy as it would seem. There are mental blocks and rationalities that make this task difficult. We get attached to our stuff and tend to overvalue things that we own, even when we’re ready to part with them. The value we see in our inactive wardrobe items generally falls into one or more of these categories:

  • Utilitarian Value
    I don’t want it, but it’s too good to throw out.
  • Monetary Value
    This is worth some money.
  • Inherent Value
    I would wear this if it still fit me. Do you want it?
  • Sentimental Value
    Aw, I remember when I wore this. OR I can’t throw this out – it’s my lucky hat.
  • Salvage Value
    I can’t wear this anymore, but I really like the fabric (or trim or some other feature). I wish I could do something with it.

When making these tough decisions about what to do with what you don’t wear, it helps to have options. If you have options, you can take action. It will get you unstuck if you’re frozen in a state of indecision. Here’s are the options I came up with to address the values we want to maintain:

Sell it – Consignment Store, E-bay, Craig’s List, Garage Sale

Donate it – Non-profit Organization/Thrift Store (for tax deduction)

Give it away – Hand-me-downs, Clothing Swaps, Freecycle.com, Organized Events, Theater Wardrobe, Random Giveaway

Repurpose it – Alterations or New Use (pants to shorts, long skirt to short skirt), Relegate items to categories of work clothes or costumes

Salvage it – Make it into a new textile item (quilt, comforter, picnic spread, pillow), cut it up for rags, use it for pet bedding

Save it – Display it, Store it as an archive/heirloom

Trash it – Last resort option for unusable items taking up space

If the options seem a bit overwhelming and you need a reality check to assess your options, you might try a rating system. From the options suggested above, list the specific options that you’d honestly consider acting upon. Next to each option listed, use a five-level rating system with these icons, to evaluate which options are best:

$ Financial benefit (a definite plus)

* Time & effort involved (a possible detraction)

@ Space needed to work on or store items (a possible detraction)

+ Your satisfaction with that particular option (a definite plus)

# Likelihood that you’ll follow through and finish (the determining factor)

By creating a rating system, you can explore each option separately, using the icon factors on a scale of one to five ($$$$$ next to the option of consignment shop or e-bay would indicate a substantial sum of money could be earned if you chose that option). Then you can compare the composite ratings to see which options are most realistic for you. The trump card lies in your likelihood to do (and finish) whichever option you favor. Even if a garage sale would net you a tidy profit, and you’d be happy with the outcome, scratch it off the list of viable alternatives if you know you’re not likely to get it done (despite your good intentions). You’ve still got other alternatives, and you can save the garage sale option for your next round of closet organizations, when your life is more orderly.

For some people, this exercise is a no-brainer. No need to make this task difficult or complicated. They limit their options and require little deliberation to decide and then act. But for others, the process is excruciating and time consuming. It’s better to have options and some kind of assessment process (even if it may seem overly elaborate) than to remain indecisive and action-averse. The good thing about thinking through this decision-making process, and coming up with what works for you, is that it is a skill that you will reuse and strengthen through practice. You’re not going to clear out your closet once and be done with it forever. So it can be worth the time and effort to make a major production out of it once, so that you can confidently take action and learn to hone your process through repetition.

What happens to clothing I donate?
I have read a lot of misinformation about what clothing is acceptable to donate to charitable organizations and where it it ends up. I’ve heard “experts” admonish readers not to donate clothing that’s  out of fashion or unsuitable to wear, and I’ve heard others talk about how they donate items to clothe the poor and homeless. Both of these perceptions are largely inaccurate and are explanations that are retold so frequently that they are presumed to be true. But most donors are so far removed from the people and the processes involved that they are simply ignorant and fill in the gaps of the story with ideal imaginings (similar to the way people imagine where meat and produce come from and what happens to trash and whatever is poured down the drains or sewers).

Thrift Store Clothing - Womens
So, to get the story straight about donated clothing, I visited several thrift stores, talked to the managers, and called corporate offices. I was able to talk to some local and national organizations, for profit and non-profit, who could give me the scoop. Of course, there are variations to this process and its details, amongst the wide array of business models, but for the eight organizations that I checked out, the process was fairly typical.

1. For most non-profit (and even for-profit) organizations, they are basically running a full-time garage sale to take your donated items, sell them at a market price to whomever wants to buy them, take the liquidated proceeds and use that money to fund and administer their service programs. The organization to whom you make your donations is the cause you are supporting with your clothing contributions. Some clothing items are designated for unemployed career seekers who need interview outfits or for other select recipients. But mostly, it’s all sold to the public and turned into cash.

2. Clothing items are dropped off by donors at designated locations (usually at the thrift store location – many have specific hours where you can drop off items at the back, where someone will help you unload and give you a receipt). Alternatively, some organizations provide pick-up service – with calls initiated by the donor; though sometimes monthly calls are made by the non-profit organization from a calling list of regular donors. Other organizations will drop off collection bags with instructions and a designated pick-up date noted on the bag.

3. Collected clothing is sorted, priced, and arranged for display on racks or shelves in their thrift store locations. Many of the thrift stores use a color-coded price tag system that changes weekly, so they can tell how long an item has been on display without being sold, and the inventory can be rotated. Clothing is not laundered, dry cleaned, or repaired when put out for sale. Everything is displayed and sold “as is,” with no guarantees, no returns, and no exchanges.

4. Thrift stores are open to the public, and look similar to retail outlets. Typical shoppers are working class or middle class people. Most seem to be frugal-minded shoppers, not destitute or homeless, and once exposed to the thrift store offerings and purchase prices, many become regulars. Clothing in these stores is typically grouped by gender, type of item, and color, but not size. In most stores, there are fitting rooms, where shoppers can try on the items they wish to buy, to make sure they fit. Some of the clothing items do not have sizes labeled, so buyers have to make their best guess.

5. For those stores that use the color-coded price tag system, they will post a sign in a prominent location to indicate that a certain color price tag has an additional discount.

Thrift Store Color Tag Discount Sign
These items are on their last week of the inventory rotation. Whatever (yellow tag) items remain will be purged from the racks to make room for new arrivals that will be priced using a new round of yellow tags. Some stores offer additional discounts to students, military members, and seniors. Others feature a designated day of the week when additional discounts apply.

6. Clothing that does not sell (and some damaged items that are weeded out and never make it to the racks) are sold or given to a salvage company which picks up the unsold clothing and distributes it for other purposes. Some of the functional clothing items are distributed to organizations which eventually make their way to third world countries (have you ever seen news stories on TV and wondered why hungry children in Asia or Africa are wearing T-shirts with a logo that says Baby Gap on them? now you know). Other garments are cut into pieces, after having of fasteners and trim removed, and then baled into bundles and sold in bulk as rags for mechanic shops, painters, and other blue-collar industries. Some scraps are recycled with other textiles and fibrous materials to make packaging materials. I didn’t follow the lifecycle of these items into further detail, but this explanation should provide some insight into what happens to donated clothing, which most consumers wouldn’t be aware of.

Thrift Store Racks
Consignment Shops
Some consignment shops still use the sales model of displaying your selected goods in their stores with the hope of selling them and splitting the profit with you after the sale. But others are simplifying the process with a single cash-for-goods transaction up front. The simplified process reduces record keeping and follow-up, but requires a greater cash flow for the consignment shop and assumes greater risk. More cash is needed to pay for the inventory, and the owner could get stuck paying for items that don’t sell or that take up valuable store space for weeks and weeks, awaiting an interested buyer. But savvy shop owners become skilled at knowing what items will sell and how much shoppers will pay; and the consignment donors will settle for a lower percentage of the expected profit in exchange for cash in hand.

So the “cash upfront” model has replaced many of the original consignment models, and added a modified twist to the process. I spoke to Valerie at a store called Plato’s Closet – a national franchise whose target market is the fashion-conscious teenage girl demographic. Valerie explained that they use a pay-on-the-spot payment model for their consignments. They accept current fashions (within the past two years – hey that would coincide nicely with the 3-year wardrobe plan) of teen clothing and pay you 1/3 of retail price for items in excellent condition. For items over $20, they pay you half of retail price. A photo identification is required for the transaction, but cash is paid for the items, up to $60 (if the amount is above $60, a check is given as payment). The prices and conditions are somewhat negotiable, and the store claims to work with the consignment donor to reach a fair price. For items that don’t sell, Valerie told me that they are picked up by the Salvation Army, and get a second chance for purchase at a thrift store outlet.

Though I doubt readers of this blog would be teenage girls who had never heard of Plato’s Closet (if there was one in their area), you might be the parent of such a teenager or a pre-teen, and would appreciate an explanation of what these shops are and how they work. Even if the Plato’s Closet store has no relevance to you, it still might be helpful for you to know about such places. Then you can look up stores in your area and not be intimidated by your unfamiliarity with them, should you choose to pursue consignment shops as an option. Just call one, tell them that you are new to consignment stores (or thrift shops) and ask them how their processes are set up.

So now you know how thrift stores and consignment shops work. And you can consider these among the other options I mentioned, which might be more familiar to you. When you decide that you are ready to do your wardrobe reorganization, you will need to have a plan in place for how to handle the clothing and other items you want to purge. So it’s good to begin considering your options now, and start thinking about what to do with clothes you don’t wear.

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Wardrobe Organization By The Numbers – The 28-Outfit Seasonal Collection

Posted by denisefisher on March 27, 2009

Men's clothes and accessories

Lady's clothes

 

 

 

 

 

 

 

 

 

 

 

The accumulation of stuff expands to fill the space available for its storage. And then it really picks up momentum.

As I wrote in my post, Packing For Paris, it’s better to think of your clothing items in the context of outfits, rather than individual garments. That assures that each of your clothing items goes with other articles of clothing or, perhaps, stands alone as its own outfit. This perspective also keeps you from having an imbalance of a particular clothing category. You can end up with far too many turtleneck sweaters or T-shirts for your needs (these surpluses can sneak up on you without you even realizing it), and these excess garments easily make themselves part of your permanent collection and while they’re seldom worn, they take up valuable real estate in your closet and dressers.

So it helps to have a plan for your wardrobe. And the most practical plan to implement is a plan with numbers. You can choose whatever numbers work for your situation. In reality, the numbers are fairly arbitrary. But choose the numbers first, and establish them as your wardrobe policy. This helps you avoid getting stuck or overwhelmed in your wardrobe assessment and organization project. You have enough decisions to make about what to keep and what to purge. Eliminate some of your decision-making by establishing a wardrobe quantity policy. It’ll be one less thing to have to think about.

I’m going to show you a generous wardrobe quantity policy that I developed for use in a temperate mid-west or mid-Atlantic climate that assumes a wide array of activities (and hence, a fairly wide array of clothing needs). This assumes a small quantity of “presentation” outfits (what you might wear to an interview or when making a presentation), a small quantity of dress-up outfits (what you might wear for a special evening out or for an afternoon wedding or graduation), a sufficient quantity of outfits for working around the house (clothing that you would wear when doing yard work or cleaning out the refrigerator – clothes that could sustain a permanent stain without you freaking out), and the remaining majority of outfits being “everyday wear” (this would vary from person to person, based on what your every day activities involved – it could even include “presentation” clothes or “work around the house” clothes if those are the activities that you usually do on most days).

Here’s how the numbers come out for my wardrobe quantity policy:
     – 28 winter outfits
     – 28 summer outfits
     – 28 spring/fall outfits

That’s about one month’s worth of non-repeatable clothing outfits:
     – 4 weeks of winter outfits
    –  4 weeks of summer outfits
     – 4 weeks of spring/fall outfits

For each season, I use this breakout:
       4 presentation outfits
       3 dress-up outfits
       7 work around the house outfits
     14 everyday outfits
     28 outfits total

If each season lasts 3 months…
     – January, February, March – winter
     – April, May, June – spring
     – July, August, September – summer
     – October, November, December – fall
…And if the designated outfits are worn “evenly,” that means each outfit will be worn about 3 times per season.

Twenty-eight outfits per season (no repeats for a month) and only 3 repeats of any one outfit per season may seem excessive at first glance. But when I did my wardrobe assessment and reorganization, I reduced my clothing items by more than a third to reach these numbers. Unless you’ve done an inventory on your wardrobe, I expect that you will be shocked to find out how many garments you actually own. And remember, the number of 28 is for outfits, not individual clothing items. If your clothing items are fairly interchangeable, you’ll be able to mix and match them to create even more combinations. If the number that I’m using is too high for you, choose one that suits you better. The goal is to create a wardrobe policy that works for you.

Of course, the 28-outfit policy, in my example, requires that seasonal outfits designated for spring are recycled for wear in the fall rotation. This policy flouts the fashion industry’s rules regarding separate styles and colors for spring and fall, but who says I have to comply with their marketing ploys? That’s part of what created the problem of overstuffed closets in the first place. My spring-fall policy also means that this collection of clothing will get twice the wear of the other seasons, but the rotation won’t be back-to-back, and wearing an outfit six times over the course of an entire year isn’t at all unreasonable.

Keep in mind that the wearing schedule is totally tentative. Neither seasons of the year nor seasonable weather conforms to the calendar, so transitional adjustments will need to be made; and you may have to borrow from one of the adjacent season’s outfits when an unexpected heat wave or cold spell comes through.

The other thing to consider when establishing your wardrobe quantity policy is the space you have available for storage. Ideally, you will have room to store all of your clothing in the same general location (hopefully in the same room, except maybe outer garments, uniforms, or other specialty items). But if you need to rotate garments in and out of storage (in less convenient locations), I’d recommend keeping the spring-fall collection on hand and rotating out the winter and summer collections. That will allow you to make seasonal transitions more easily and will keep the adjacent season’s outfits available for those unseasonable weather days.

Go, take a look at your closet and dresser drawers, and do a quick count and estimate of your inventory. Then start formulating your own wardrobe quantity policy, by the numbers.

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