What Is Opportunity Cost and Why It Matters when You're Decluttering Your Home

Opportunity cost is an economic term that refers to how making a decision will cost you the opportunity to make other decisions. And since decluttering your home is all about decision-making, understanding the cost of keeping or getting rid of items is key to organizing your home.

by Susan McCarthy

Sometimes when you’re in the throes of digging through your closets and cabinets, it’s easy to forget your reason for decluttering. You get distracted by all the things you forgot that you owned and now you feel obligated to use these things. Not today or next week but someday.

Instead of decluttering, you end up rearranging things. Maybe you buy some bins that look much nicer in your home than piles of stuff. And now that you’ve hidden, er, organized, all those things that you don’t know when or how you’ll use, you feel calmer. Maybe even pleased with the new orderly look of your home. 

Until one day in the not-so-far future when you feel frustrated because your home…once again…looks and feels cluttered. After investing so much time, energy, and money into decluttering your home, you’re stuck wondering what went wrong. 

What happened is that you didn’t consider what you’d lose by keeping those things. 

Huh? Wasn’t holding onto things supposed to be useful?

Welcome to an economic term, “opportunity cost,” that has nothing to do with what you paid for items, and everything to do with the decisions you make when decluttering. 

Considering the opportunity cost of keeping or getting rid of something is essential to effectively decluttering your home. Curious how? Hang on for a ride through a land where Yes = No. 

What Is Opportunity Cost?

At its most basic, opportunity cost is what you lose out on when you make a choice. Maybe you’ve heard the saying, when you say “yes” to something you’re saying “no” to everything else. 

It might be easier to think about opportunity cost, and how it applies to life, in relation to your schedule. Let’s say that you get invited to two cookouts. One is for your boss’s 50th birthday party and the other is for your cousin’s son’s graduation party. 

The events are the same day and same time. You have a good relationship with both your boss and your cousin. You can’t attend both events. What do you do? You could look at what you gain…and lose by choosing one event over the other.

According to Wikipedia, “the opportunity cost of a particular activity is the value or benefit given up by engaging in that activity, relative to engaging in an alternative activity.” 

So, the opportunity cost of attending your cousin’s son’s graduation party is not attending your boss’s birthday party and missing your chance to talk with people whom you normally don’t interact with in the office…people who might remember you the next time they’re looking for someone to work on a project with them. 

Conversely, the opportunity cost of going to your boss’s birthday party is not seeing relatives you haven’t seen for a while…including your 98-year-old grandmother. 

Decisions. Decisions. 
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For this example, I used the choice between two events because it’s easy to see that you can’t be in two places at once. It can be a little trickier seeing the opportunity cost of keeping or letting go of an object.

Do you want to learn more from me? Check out my free resource on decluttering questions that can help you make decisions about your stuff. 

Why Should You Care About Opportunity Cost When Decluttering?

Decluttering is all about decision making. Keep or let go? Professional organizer Barbara Hemphill even defines clutter as “delayed decisions.” 

The trouble occurs when you hold onto things for “someday.” It feels like a decision, but really you don’t know when…or if…’someday’ will ever come.

Even though you don’t know if you’ll ever use those things, you’ve decided to keep them…and there’s a cost to that decision.

And that’s why you want to consider the opportunity cost of decluttering…or not.

• When you choose to keep something, you are giving up having more space in your home. (Or even more wiggle room in your drawers.) 

 

• When you hold onto items for “someday” you (or someone close to you) will spend time sorting through those things again in the future. 

 

• When you keep items that you tell yourself you should do something with, you add a burden to your to-do list and may feel guilty or even ashamed that you aren’t taking action.

Important: Don’t think that just because you have the space to store something that this decision doesn’t cost you other opportunities.

The truth is you may not realize what you’re missing. That spare room that has become the convenient catch-all for all sorts of stuff could get used as a guest room, home office, craft room, exercise room, reading nook, playroom, or….

Filled with stuff, it’s difficult to envision that room as anything but storage space. 

Opportunity Cost and Your Home

Opportunity cost is about how a decision costs you the opportunity to make other decisions.
 
Imagine having an empty shelf in your home. Empty, it is full of potential. Once you choose what goes there, you’ve eliminated the other options. 

Of course, at some point you need to make a decision.

When you find yourself thinking that you’ll hold onto an item “just in case” you need it someday, the cost of holding onto those things includes not creating the extra space and cleared surfaces that you may have been hoping for when you decided to start decluttering your home.

You are giving up the results you hoped for because you feel uncertain making the decision to let go of things.
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Check Out: The article Decluttering Questions to Ask Yourself when Deciding What to Keep and What to Let Go for prompts to help you decide the place different items have in your life. ​

Tips for Determining What a Decision Costs You

Of course, not only is there an opportunity cost to holding onto items that you potentially won’t,  don’t, or can’t use, there’s also the chance of missing out on using an item if you get rid of it.

When you hold onto items just in case you need them someday, you are skewing your decision-making. You’re focusing only on the opportunity cost of not having the item instead of also considering the opportunity cost of keeping that thing. 

Determining the opportunity cost of keeping or get rid of an item comes down to a couple of questions:

What would happen if I didn’t have this item?

• You couldn’t use it. 
• You might spend money replacing it, it you need it.
• It would take time asking friends, family, and neighbors if they have one you could borrow. 
• You may miss the identity that came with the item (for example, hobby or recreational equipment and supplies, items associated with a past career, special clothing or costuming)

What would be the result of keeping this thing?

• Someone who could use the item might not be able to receive or purchase it.
• You may need to take the time to clean the item (for example, dust its shelf).
• You can’t use the space that the item occupies in another way.
• You might spend money on bins and boxes, a shed, or even off-site storage.
• You’ll own more items, which means it will take you more time to find items or to put things away.
• You may need to take time in the future to organize or reorganize the items.
• Ultimately, someone will need to remove the items from your home.

You don’t need to do this level of thinking for every item in your home. (The cost to your time would be too high!) Instead, think about some of the decluttering tasks you’ve done in the past. Have you experienced frustration more often around not having something you have given away?

Or are you irritated that your decluttering efforts don’t seem to make much of a difference to your house? If organizing your home feels like a never-ending task, check out this article on how to stay organized.

Key Takeaway

The key takeaway from this article is that every decision has a cost. You are considering, “What would happen if I didn’t have this item?” versus “What would be the result of keeping this item?”

At A Less Cluttered Life, I make it my mission to help people discover what decluttering can add to their life. If you would like to work with me, check out the courses and coaching programs I offer. 

And wherever you are on your decluttering journey, be sure to get your free copy of The Less Clutter Roadmap…the path and plan to simplify your home.