Few of us realize just how much money clutter costs us, not only in our homes, but also in our finances. If you want to save money, increase productivity and have more leisure hours, consider eliminating the clutter in your life.

Home Clutter
Lifehacker.com has a shocking and eye-opening equation that can show you the cost of clutter. The site offers a simple formula to calculate the cost of lost space in your home.

Divide the current monthly cost of your living space by the square footage and that will give you the value of your home per square foot. Next, do a quick inventory of your rooms, closets, basement, garage or other areas that are unusable because they are filled with clutter. Take the value of your square footage, multiply that by the amount of cluttered space and you will see the cash value of that space.

Take this a step further by dividing your monthly rent or mortgage payment by the square footage of your living space and see just how much room is devoted to clutter. Perhaps you have a bedroom filled with boxes that could be used as a home office?

How your clutter has spread can also lighten your wallet. Are your cars sitting in the driveway suffering in the elements and at risk of theft or vandalism? Has your clutter migrated to its own off-site storage unit? How much are you paying each month or year for that storage unit? On average, small storage units nationwide cost around $60 per month, which adds up to over $700 per year.

The money you spend on storing clutter can be saved, put into a retirement plan or used for a family vacation. Consider whether the clutter is valuable enough to outweigh the financial cost of storing it.

Damage to items caused by clutter can cost you additional money to fix or repurchase. Items that are damaged because of clutter can lead to hundreds of dollars in unnecessary extra expenses.

One overlooked problem is the effect of clutter on your personal health. Clutter can create hazards in your home and obscure household maintenance problems, such as leaky pipes, from view. This could lead to flooding and/or mold.

Office Clutter
Can you find that file the boss wants immediately? If not, you may be costing yourself a future promotion. If your desk, work area or personal space is cluttered with boxes, files, food, extra shoes, sweaters and other items, your supervisor might assume that you can't handle the responsibilities of your present job or additional work. When the opportunity for a promotion becomes available, your clutter could eliminate you from even being considered.

In a recent survey by Forbes, 35% of workers said they would "be ashamed if anyone caught a glimpse of their cluttered workspace," and 40% criticized co-workers for their clutter. If you aren't pointing fingers at the office "hoarder," then it could be you.

The average worker spends 30 minutes per day and 150 hours per year just looking for items such as documents and tools.

While some workers and managers typically say they don't have enough space for their work-related items, it is actually that they have too much clutter. Laura Stack, an organizational professional from The Productivity Pro, suggests that most of us need only three folders: "to read, to do and to file."

Nearly 80% of items that are stored in a filing cabinet or stacked on your desk will never be read, seen or dealt with. Files that are misplaced can cost you valuable sales.

Have you or your staff missed an important meeting, a sales lunch or a conference with prospective customers because the invitation or reminder was buried in the clutter? How much lost revenue did those missed meetings cost you?

In a study by Brother International, U.S. corporations lose "$177 billion annually" due to clutter. By organizing and consolidating your work area, you can add dollars to your profitability.

Digital Clutter
While paper clutter is the number one problem for businesses, digital clutter comes in a very close second.

How much is it costing you to store all that digital clutter? There are obviously many business and financial reasons to store some documents. However, much of what is stored is soon forgotten and rarely used. How much do you spend on disk drives for storing data? How many flash drives does your business order annually for storage? Consider how much all of that digital clutter is slowing down your desktop computer and your company's network.

Do you pay for off-site digital storage? How often do you increase that storage capacity? Extra storage costs extra dollars. All individuals and businesses need to back up their data and many financial records and other digital files must be kept for certain periods of time. Yet, if you took a few hours to peruse those files, how many could you eliminate? Save and store what you need for taxes, warranties or items that your business requires, but delete those files that sit in folders for years.

The extra space will save you money on back-up disks, back-up hard drives, flash drives and online or off-site digital storage. If your company provides smartphones, how many of the apps on those phones would you actually use? The average smartphone user has 85 apps on his or her phone, but uses only 15. By eliminating those seldom-used apps, you could increase the battery life of your phone and free up needed memory for unnecessary files.

Setting aside a specific time per week or month to delete emails, unused icons or programs on your computer, network and other electronic devices will save you money.

Financial Clutter
Have you paid late fees or penalties because the bill or invoice was buried underneath clutter? These fees can add up to significant amounts of money.

If you're late on your utility bills, the power in your home could be shut off. This will cost you on many levels. You must pay late fees and the utility company may charge you a "reconnect" fee. If the power has been off for any length of time, the food in your fridge and freezer could spoil.

Being late on your payments can also damage your credit score, leading to you paying a higher interest rate in the future.

Clutter can also have a direct impact on identity theft. If you are not diligent about shredding banking items, both personal and business, you open the door for this type of theft. If you don't review your expenses consistently, you may not even be aware that someone is using your credit card or name to rack up charges.

De-cluttering your desk and organizing your paperwork can save you up to thousands of dollars a year.

The Bottom Line
Nearly all of us have some clutter. By taking a few hours to organize your space every once in a while, you can save money, find items when you need them and even eliminate a bit of stress in your life.

Related Articles
  1. Home & Auto

    4 Areas to Consider Roofing Material Types

    Roofing your home is very important, that’s why you should choose a roof specifically designed to handle your area’s climate.
  2. Investing News

    Employee Or Contractor? An On-Demand Economy Problem

    Several on-demand economy startups classify, or classified, their workers as contractors rather than employees. It is an unconventional approach to hiring and has been a hit with venture capitalists ...
  3. Term

    Understanding the Maintenance Margin

    A maintenance margin is the minimum amount of equity that must be kept in a margin account.
  4. Insurance

    How to Shop for Home Insurance

    Tips for getting the best protection for your place and possessions.
  5. Credit & Loans

    Co-signing a Loan? Make Sure You Know The Risks

    Contractually, co-signers are just as responsible for the loan as the person actually borrowing the money. Be careful not to put yourself at risk.
  6. Investing

    Trends In Copyright Litigation

    The Internet has resulted in an explosion in content. An increasing number of copyright trolls are monetizing such content through litigious practices.
  7. Investing

    3 Ways to Monetize Your Expertise

    Anyone can make money from sharing their knowledge with others.
  8. Taxes

    What's IRS Form 2848 Used For?

    It's a power of attorney tax form and here's what it can, and cannot, do.
  9. Economics

    What Does Human Resources Do?

    Human resources (HR) is the department within a company that handles all matters relating to employment.
  10. Stock Analysis

    Are You Ready for Uber's IPO? 2 Things to Consider

    Learn why ongoing litigation from drivers along with state and local governments could put a damper on what is likely an impending Uber IPO.
  1. Emergency Banking Act Of 1933

    A bill passed during the administration of former U.S. President ...
  2. Slander

    Slander is the act of harming one person’s reputation by telling ...
  3. Libel

    Libel is publishing a statement about someone in written form ...
  4. Defamation

    Defamation is any statement (written or spoken) that damages ...
  5. Fair Housing Act

    This law (Title VIII of the Civil Rights Act of 1968) forbids ...
  6. Equitable Division

    A legal theory that guides how property acquired during the course ...
  1. How soon should I start saving for retirement?

    The best answer to the question, "How soon should I start saving for retirement?", is probably, "yesterday," and the second ... Read Full Answer >>
  2. Can I use my 401(k) as a collateral for a loan?

    Although federal Internal Revenue Service, or IRS, regulations prohibit using a 401(k) account as collateral for a loan, ... Read Full Answer >>
  3. What protections are in place for a whistleblower?

    Whistleblowers can play a critical role in ensuring the compliance, safety, honesty and legal fairness of governments and ... Read Full Answer >>
  4. Why do economists think it is important to track discretionary income?

    Economists track discretionary, and disposable, income as a proxy for the growth in the financial health of average citizens ... Read Full Answer >>
  5. What is the difference between disposable and discretionary income?

    According to the Bureau of Economic Analysis, or BEA, disposable income is the amount of money an individual takes home after ... Read Full Answer >>
  6. What proportion of my income should I put into my demand deposit account?

    Generally speaking, aim to keep between two months and six months worth of your fixed expenses in your demand deposit accounts. ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!