How to Save Using Found Money

Most of us are used to dealing with predictable money -- the paycheck or interest earned from a CD or a child support payment. We know how much is going to be available and when to expect it. This is the way we budget. Unfortunately, we usually run out of predictable money all too quickly, making it hard to save.

However, there is another kind of money that comes into our lives. This money is unexpected and unpredictable. This money, I like to call "found money".

Did you ever discover a quarter in the middle of the sidewalk? Well, that was found money. How about the change that under the sofa cushions -- again, found money. Maybe you overpaid a bill and received a refund. That's found money. Some one died and left you an inheritance. Now that's really special found money. Or how about that deposit you got back from the utility company. Found money. You bought a used book at the thrift store and ran across a $10 bill tucked inside. How about that $20 bill you found in your jacket pocket, something you overlooked when you put the coat away at the end of last season. Found money.

What do you do when you are the lucky recipient of found money? If you are like most people, you spend it on an indulgence almost immediately.

How about saving all that found money? Now there is a radical suggestion. But, it could make a real difference in creating a "rainy day" fund or funding that IRA for you retirement.

Difficulty: Easy

Instructions

Things You'll Need:

• An understanding of the concept of "found money."
• The self-discipline to save "found money" instead of blowing it.
• A plan for saving and investing your found money.

1. Keep your "found money" separate for your "regular money." When the amounts are small, you might want to keep the money in a jar or other household container.

2. When you pay cash for a purchase, you could treat your change as found money. At the end of the day, put all of your coins and one dollar bills in the found money container.

3. When you have a significant amount, say $100.00, put it in a savings account that you don't plan to raid for indulgences.

4. When you have at least $1,000.00 in your found money savings account, invest it in something that is likely to earn you more than you get from a passbook saving account.

5. Look for ways to generate "found money." If you return an item to a store for a refund, treat the refund as found money. Treat all interest earned as found money. If something costs you less than your expected to pay, treat the difference as found money.

6. Repeat, repeat, repeat.

Tips & Warnings

• Keep your eyes open. You will see more money lying around than you expect.
• Be liberal in your definition of found money. Look for excuses to save money rather than spend it.
• Don't raid your "found money" stash unless you are facing a dire financial crisis. Nothing involving shoes, golf clubs or vacations qualifies.

[excellence12]

on 8/27/2009 D.B. This is a great article and brings excitement in 'making and saving' money that will be needed in the future or will compound your savings. It's a *5*. I am now Rec., and sent an invite to be 'Friends.' Let's stay in touch with one another.

[simoneferrara]

on 8/27/2009 I also put a side found money. Great Advise!

[meowysmiling]

on 8/24/2009 good idea..

[ThenAgainMaybe]

on 8/22/2009 Great article on saving found money! Great ideas, well written, interesting read and inspiring. I think I'll go lift up a couch cushion or two right now. :) RRRC

[highcloud]

on 8/20/2009 Great tips and 5*