Do you really know what you own? Do you understand the overall worth of the entirety of your belongings? The average home contains over 300,000 individual items; how could anyone recall all of it? The answer is: they can’t, and don’t when forced to after a major life event. Actually, most homeowners can only recall a bit over half of what they own after a disaster. That’s why it only makes sense to get to know your stuff. Here are just six reasons why you need to go to the trouble of making a record of the contents of your home and of your personal belongings:
Your Stuff Gets Organized Better
There’s nothing like going through every single thing you own and cataloging it to force you to organize, and even pare down your belongings. Not only will you have a better knowledge of what you own in general, but as you methodically go through everything, you’ll be able to create systems for better storage, and expose the clutter we all own. Once you have everything organized, you can easily sort it into categories such as sell, store, keep, throw away (or burn!).
Establish Value for Your Household Items and Valuable Possessions
Do you know the overall value of your home assets? Do you know the market or resale dollar amount you could get for each item? This exercise isn’t just for garage sales—insurance companies routinely research the resale value of items in general, but specifically of those being claimed for loss. You may not be surprised to learn this process of determining value is not always weighted in your favor. This is why it’s important for you to have visual proof of the items you own, their location, and their condition. When you know what you own and have recorded it accurately, you’ll find establishing a firm value for each of item in your home a much easier prospect.
Create a Moving Checklist
Is your company about to relocate you? Do you have to make a move quicker than you’d originally planned? Many of us have lived through the nightmare of moving, and oftentimes the experience of things going missing. Being unorganized makes it even worse. If you know what you own and can access that information quickly, you’ll be able to access it and create a moving checklist in record time—even dividing items out room by room. You’ve just saved yourself a huge headache by getting a firm handle on your stuff, and provided a way to make sure that everything you packed shows up and is accounted for on the other end.
Verify Insurance Claims or Tax Losses
The worst has happened, and now you need to make an insurance claim on your damaged or destroyed items. In another scenario, perhaps you need to notify the IRS about tax losses by giving them an itemized list. You can save yourself a lot of time and perhaps a lot of money if you can show up prepared with an exact list of your belongings. Insurance companies are far more likely to respond favorably and quickly with payment if they see your detailed and accurate efforts, along with visual proof. And the same could be said about the IRS, as well.
Are You Over-Insured or Underinsured?
How much do you pay monthly in insurance bills? Most Americans don’t realize this, but it is certainly possible to be over-insured. That is, if you don’t understand what you own, you run the risk of simply paying the insurance company more in premiums to simply create a blanket policy for you. Conversely, you want to make sure that you are not under-insured, and will be reimbursed fully for any losses suffered. Knowing what you own—and being able to prove it— helps immensely toward “right-sizing” your coverage to ensure you are protected (and possibly avoid a future confrontation with your insurance company). Remember: knowledge is leverage. But most insurance companies will want to work with you to tailor your policy to your family’s situation, including how much you own.
Evaluate Your Net Worth Accurately
As you move through life and plan for the future, it’s never a bad idea to keep track of your net worth. Certain Internet sites, not to mention an accountant or financial advisor, may be able to help you with determining your full net worth toward protecting your family today, while helping to alleviate potential burdens down the road (in some cases, for generations). To achieve this, an accurate accounting of one’s personal assets is imperative; you need to know the value of what you own, in addition to all the sources of income and expenses that affect net worth.