I think one of the key factors of simplification — at least for me — is that it doesn't only clear out physical space, it also clears out psychological space. When we have a lot of stuff, much of has a "story," and we keep all those stories somewhere in our mindspace... and it causes a sort of clutter and heaviness. As I have gradually sold off stuff via eBay and other places, I find my mind is lighter... as well as the physical load of "stuff."
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This is very true! I have started to look at life in a very different way ever since I downsized and one of the emotional liberties I have experienced is that I almost never feel compelled to go shopping just for the hell of it and when I am looking at a kitchen gadget that looks kinda cool and what not, I never feel like buying it would be a good idea. It just doesn't fit into my life anymore.
Your take on this is an interesting perspective that I actually hadn't considered, but it makes a lot of sense to me.