What is Found Money, and How Does it Bring Debt Relief?Aug 16, 2017
From time to time, you may hear people refer to “found money.” While found money is more than just the coins you might find between your couch cushions, it’s a surprisingly simple concept that can be applied to help you get debt relief.
What is found money?
Found money is any money that you don’t already have figured into your budget, or weren’t expecting to receive. If you receive a rebate, a gift of money, or even an unexpected inheritance, you’ve found money.
If you’re fortunate enough to receive an income tax refund at the end of tax season, that refund can be considered found money (if you haven’t already “spent it,” or ear-marked it for something else). Because you’ve already paid that money to the federal government, and are now simply receiving it back, some people argue that an income tax refund is not actually found money. So if it suits you better, you can simply think of your tax refund as forgotten savings.
However you look at it, if you suddenly have more money on hand than you normally would or were expecting, you’ve found money. It’s not so much about what you call that money, it’s more about how you use it.
Put your money to work
There are a number of ways that you can use extra money to reduce your debt. Focusing on debts with high interest rates, like credit cards or payday loans, is an especially good use of your money and can help you reduce debt sooner.
If you’ve taken out a payday loan, especially if you live in a province like Newfoundland where interest rates on payday loans haven’t been highly regulated, consider putting your found money to that debt. Payday loans can quickly become unmanageable for borrowers.
This tax season, if a refund comes your way, put it directly towards debt relief. Reducing your debt as soon as possible can help you increase your financial security and comfort.