Taking Inventory

Dennis Friedman

MY NEXT DOOR neighbor had her home burglarized. The thieves stole some expensive electronic equipment and jewelry. In the aftermath, I thought I should make a list of my valuable possessions and take a photo of each one, in case I ever have to file an insurance claim.

Here’s my list of valuables:

1. Fender Telecaster guitar.

Yes, that’s my complete list. I really don’t own anything of value, other than that guitar, which my parents gave me in 1968 for my 17th birthday. I don’t own any expensive jewelry or electronic equipment. My television is about 10 years old. I own an iPhone 5 worth $25 on a trade-in for a new phone. My other possessions are of no real value.

I do own some watches and a ring that belonged to my father, which I keep in a safe deposit box. But their value is mostly sentimental. My list of valuable possessions also includes a small one-bedroom condominium and a 2010 Ford Fusion.

Looking at that list, you might think I live a spartan life, but I feel it’s full and comfortable. I don’t hesitate to spend on things I value. Whenever I can get away, I like to travel. I enjoy dinning out with friends. I subscribe to a Major League Baseball cable package that allows me to watch my favorite team. I have satellite radio in my car, so I can listen to my favorite music. I subscribe to HBO, Showtime, Cinemax and Amazon Prime to satisfy my desire for a good movie.

You know what I like about my list of valuables? It makes me feel safe and secure. I know that, in a financial emergency, I can lower my fixed expenses. I can always travel less, eat at home and drop my various subscriptions. My condominium and car are paid for. As a result, in a financial emergency, my fixed expenses would consist primarily of utilities, insurance, property taxes, food and homeowner’s association fees. I think of my low fixed expenses as a wall protecting me from financial disaster. Reducing expenses can be a first responder that saves you in a financial emergency.

If your list of valuables, however, includes a payment on a luxury car, diamond necklaces or a Rolex watch, life can get stressful during hard times. Even if your expensive valuables are paid for, you have to ask yourself, would I have been better off putting that money into my retirement savings plan or a six-month emergency fund? It might feel good driving that luxury car. It won’t feel so good when a financial emergency hits—and you don’t have the resources to deal with it.

Dennis Friedman retired at age 58 from Boeing Aerospace Company. He enjoys reading and writing about personal finance. His previous articles include A Word of Advice, Lucky One and Friendly Reminder.

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