I originally drafted this blog back in early February with the intention of posting it just prior to the normal tax deadline. Rereading it now I’ve had to make some edits, but fortunately much financial advice is timeless.
During a time like this where so many people are facing reduced incomes and potential job loss, the idea of “Found Money” becomes even more appealing. The CARES Act, which Lauren recently wrote about in this BLOG, is one potential source for unexpected relief. Let’s explore some other places to stumble across “Found Money”, since it is likely that none of us will win a million-dollar lottery jackpot any time soon.
During tax season, that might be the unexpected refund of overpaid taxes. And for those who do the laundry, finding that $20 bill in the dryer always brings a smile. Wouldn’t it be great if we could “find” more money in other places? Consider these ideas:
Search for unclaimed property:
We were reminded of this opportunity when a client lost their spouse and needed to determine if there was any lost or unclaimed property in their name. North Carolina residents can go to https://www.nccash.com/ where they can search for property in their name that they may have forgotten about. If you see an item on this that appears to be yours, you can click the button to file a claim online. If confirmed, you may get a check in as short as a week!
For folks with prior residence outside of North Carolina, we would also recommend checking the National website: https://unclaimed.org/ where you can click on any state in which you have lived to initiate a similar search.
We have a LOT of time for this right now! Eliminating clutter and getting money for items that no longer bring you joy can be rewarding on multiple levels. There are many online methods where you can post items for sale, and if you have a bunch of stuff, perhaps a yard or garage sale might be even more lucrative – that is once it is safe to do so!
Evaluate your current spending:
COVID-19 presents a great opportunity to revisit your spending to evaluate what you really don’t need to continue purchasing, or to find a cheaper alternative to source items that are deemed necessary. Think about all the subscriptions you have that are on automatic renewal. Apps, streaming services, a gym membership or maybe a shopper’s club membership that you just aren’t taking advantage of. It may also be a good time to renegotiate with your phone/internet/cable providers.
Compound the benefits of “Found Money”:
The natural inclination we have when we identify “Found Money” is to spend it, and usually on something that we may not really need. An alternative is to compound the benefits which can be done in a number of ways. When you decide to eliminate certain monthly expenses, start putting that money into a separate account at your bank. At the end of the year see how much you have “saved”, and then reward yourself by putting that money to good use.
For lump sum finds, you may want to talk to your CPA prior to the now revised July 15th deadline to discuss your eligibility to maximize your ROTH, IRA or SEP contributions, or your eligibility to maximize your Health Savings Account contributions so that money can grow. Paying off a debt to avoid further interest charges is also a great idea! Consider starting with loans having the highest interest rate, or maybe those with the smallest balance to feel a quick sense of accomplishment. Finally, earmarking funds for a special purpose like college funding, a wedding, or a special trip can bring added joy down the road.
If you would like to understand how any of your “Found Money” can best be put to work, please give us a call!
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