Debt, Consumerism, and Self Storage

There are two things that confuse me; actually there is a lot, but that is for another post.

Debt why does nobody care about the massive debts piling up in North America and around the world? In my opinion this represent one of the most significant risks to the global economy, and no one seems to care since it’s not politically convenient.

Consumerism– Why due North Americans purchase McMansions they cannot afford, fill them with objects they cannot afford, and then rent storage units to store the extra objects they will not use. This is not only a financial issue but an environmental issue as well.

The average American according to

STATISTICBRAIN 

-$4220 in there saving account
-24.3% have no savings
-$117,951 in debt
-$2650 in credit card debt.

With 52% finding it hard to pay the bills and the average amount saved for retirement is $36,250. Why are people still consuming? These are scary numbers.

The average home size in 1970 was 1400 sq ft, in 2009 it was 2700 sq ft. Where does this consumer stuff end up? First in rented storage units then in the landfill. Take a look at neighborhoods, how many people actually park cars in their garage vs storing stuff in them?

U.S. Self Storage Statistics

STATISTICBRAIN

– 8.96% of households rent a storage unit
– There are 58,000 storage facilities,
– 566 units at each facility, which equates to 32,820,000 units.
– Total square footage available is 2,300,000,000 sq ft.
-$1.42 is the average revenue per square foot.

Self Storage Industry Statistics

-Annual self storage revenue $22,000,000,000
-Total number of self storage facilities in the US 58,000
-Average number of units per facility 566
-Total amount of self storage space available in the US 2,300,000,000 sq ft
-Average revenue per square foot of self storage $1.42
-Occupancy rates for self storage facilities 87.4 %
-Percent of US households that currently rent a self storage unit 8.96 %
-Total number of people employed by self storage companies 172,000

 

Largest Self Storage Companies

Number of Locations

-Public Storage 2,305
-Extra Space 1,375
-Sovran 590
-CubeSmart 420
-U-Haul 375

Self Storage Auction Statistics

-Average auction price of a self-storage unit $425
-Annual number of self storage units that go to auction 155,000

Final Thoughts

The average cost of a storage unit is $1,192.80 per year.
So 8.96% of households in the U.S. pays approx $1,192.80/year for the opportunity to store stuff!
There are good reasons to use a storage unit, especially as a temporary solution around life changes (moving, marriage, job opportunities etc.) But I have a suspicion that most is useless stuff that will one day be in the landfill. If anybody wants to reach FIRE that $1,192.80 a year will make a nice extra retirement contribution and you won’t have to drive and check on all your stuff at the storage unit!

 

Don’t wait for retirement to enjoy life !!

Comments

    • Hi Tom,
      Yes a little off topic but that has been in my drafts for a while so I thought I would change things up this week.

    • Hi Caroline,
      I was on Staticbrain when I found those stats and I was kinda shocked as well. I guess that is why there are a few reality TV shows auctioning off storage compartments.

  1. Very interesting stats. We tried to avoid clutter and holding on to extra stuff now.

    Admittedly, I did pay $50 a month in my apartment building while living in New York prior to moving to Chicago for a tiny storage cage. We lived in a ~600 sq ft 1 bedroom, and we had no where to put some of our larger stuff (suitcases, etc.).

    Thanks for sharing. – Mike

    • Hey Mike I would get a storage area if I lived in a 600sq ft apt too. Like you said what do you do with all the big stuff bikes, suitcases etc. I live in a 1800 sq ft house and it is stuffed full of crap (most we use daily).

  2. Very true, Steve. In terms of debt, the mentality is the same for governments and individuals. They spend like there is no tomorrow. Who rushes a country’s budget in a couple of days? Only those insane people in both parties in US.

    In my neighborhood, many garages are used to store junk stuff. In the winter, they have to clean up the snow and ice on their cars. It’s funny.

    Self storage places are everywhere. They look so ugly. The useless stuff take space, and cause stress to me. Sadly, I have been embracing this culture, too. When I came to US 2 decades ago, all my stuff were packed in 2 big suitcases. My junk just keeps growing, and I had to get rid of them periodically.

    • Hi Helen,
      At some point something will have to give with the government spending. Not just what they are spending today but all there future promises and liabilities. It’s sad to think my grandchildren and great grandchildren will be paying for stupid mistakes they are making now.
      I am also guilty of having too much stuff but at least it is all paid for and if I don’t use or need it I get rid of it.

  3. Lol I always wondered the same too. Buy big houses that they cannot really afford just to buy more stuff to store in their extra rooms, then eventually rent storage spaces to store even more stuff. That’s A LOT of money that could be invested in appreciating assets!!

    I think a lot of it has to do with human psychology.

    1) They buy the big house to show off. Then use most of their paychecks to buy fancy stuff because they feel it makes their home look better. All of this is their way to protect their ego (“self protection”)

    2) Buy more other stuff because it was “on sale” and they feel that they’re saving money but really not. This is probably due to FOMO (“scarcity” effect).

    3) Then, they eventually “get bored” of the stuff, so they go out to buy new stuff (more stuff). But at the same time, they can’t seem to part with the older stuff because they feel it’s “worth” something, so they end up keeping it. Not to mention, humans in general have a “hoarding” behaviour towards stuff they feel have value.

    This is irrational because they see more value on their stuff than the value of their space, plus the cost to rent storage spaces.

    At the end, we learn in psychology that most human behaviour is irrational lol! Despite them realizing or not, most of them won’t change. That’s how a lot of businesses profit from irrational consumers. ☹️

    Only the ones who realize and change their behaviour will be able to reach FI sooner.

    Great article, Steve!

    • I wish you wrote this comment before I published this post (LOL). I would have used “This is irrational because they see more value on their stuff than the value of their space, plus the cost to rent storage spaces.” that is a great sentence that says it all. As always I appreciate Your comments.

  4. Interesting stats! I actually do find it interesting when people have backyard storage, they fill that up, and then go ahead to rent additional storage which also gets filled up to the brim. I know that such a lifestyle can easily creep up on anyone, and is probably the main reason why North Americans in general are in so much debt!

    • Hey Enoch,
      I agree consumerism and debt go hand in hand and lifestyle inflation can creep up on anyone. I have always watched my spending and what we consume for that exact reason (lifestyle inflation).

  5. Did you ever watch Storage Wars? I was addicted to that show and amazed at what people had in their storage lockers.

    I am currently in a 450 square foot and I have a large patio so that’s where my suitcase is. My snowboard is at my mom’s house haha so I guess I have a free storage ‘locker’ courtesy of my mom.

    My rule is that if it isn’t used in 1 year it has to go. People are too attached to their stuff.

    • Hi GYM,
      That’s an excellent rule, if you don’t use it within a year you probably can live without. I use to watch storage wars but I don’t think it is on TV anymore or at least the channels I get. I was shocked at first but then I read they would stage the storage units. (kinda ruined it for me)

      • They DID!?!

        I didn’t know that.

        Okay that ruined it for me too haha.

        Yeah, it’s an old show. I don’t have cable anymore so I’m not even sure what’s on TV these days.

  6. We have deliberately tried to declutter over the last year or so. If nothing else when we are gone we don’t want our kids having to go through a life load of junk to decide if they should keep it or not. We do still have storage space in our basement that’s full of boxes. I expect we will go through these each year and determine if we need to keep them or not.

    As an example in this age of spotify do we really need boxes and boxes of cds that we have collected over 30+ years? Probably not but I cant bring myself to donate or sell them just yet.

    • Hi Steve

      I have tried to purge a few times over the years but I have lots of tools and parts that I still need for work so that will have to wait till I fully retire. That is a good idea to go through your stuff annually and get rid of anything you do not use.

  7. When I first moved to the US and saw the storage units, I couldn’t even understand why someone would need them 🙂

    I wish I could go peek into some of them. Will be interesting to see what is worth spending additional 100 dollars every month on.

    • Busy Mom,
      It must have been a big culture shock when you moved to the US. Their is lots of reasons to justify a storage unit but I suspect a large percentage is just junk that will eventually end up in the landfill.

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