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What do you do with found money?

I have some great news for you all…well, actually… it’s just great news for me and Girl Ninja. We’re expecting!!!! A $3,000 check that is…not a baby. It was money that we’ve been hoping for, for a very long time, but weren’t sure we’d ever see it.

You remember a few months back when I blogged about getting a $40,000 raise? Well apparently, I jumped the gun a little bit, because that raise was delayed nearly two months.

Girl Ninja started a K/1 split classroom at the beginning of the school year as a substitute, but with hints that it could turn in to a contracted position (meaning she’d get a pay bump and all the benefits of a normal teacher). We thought that contract would come, sometime in late September. It didn’t. We were then told to expect to hear no later than Oct 31st. We heard nothing. November came around and other long-term substitutes were being offered temporary contracts. Things weren’t looking good.

But then, last week, GN got an encouraging email that indicated she should be signing a contract sometime in the next couple weeks. If that happens (which it better or I will be slashing some tires…just sayin), she will be compensated back pay for the three months she’s already worked at the school. Basically meaning she’d get a one time, $3,000 check.

I’ve come to notice a recurring theme in our relationship when it comes to unexpected money, we NEVER agree on what to do with it. When we got $2,500 in cash wedding gifts, I thought the Roth IRA was a perfect avenue, Girl Ninja thought a trip to San Francisco. When I found out I was receiving an award at work that came with a little financial bonus, I figured I could add it to our savings, Girl Ninja thought we could use it for things around our house. We never quite agree on what to do with these little windfalls. That’s why she is my jelly.

My assumption is, of the $3,000, at least $200 will go directly back to her classroom for decorative purposes (we haven’t spent any money on the room as we were never guaranteed she’d be able to stay). Another $300 will be given away/donated (stayin’ true to 10% rule). And the other $2,500 is…well…we haven’t figured that out yet.

This leads to today’s question? What do you do with found money? Do you have a rule like 50% savings, 50% spending? If you have debt, does bonus money always go 100% to it? If you got $2,500 today, how would you allocate it?

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  1. How about you compromise and use half of it for girl ninja’s wants and half of it for house downpayment savings.

    Or, you can make another rule (this is the one my husband and I follow). Her windfalls are up to her discretion and your windfalls are up to yours to decide on what to do with them. This only really works when both people are working, but it’s another idea. My gut is saying that girl ninja should have a bigger say since it is her bonus.

    I’ve never been good at the “our money” thing, so my opinion is skewed. We just do our best to make enough money where we each can contribute to our long term goals and also have enough money left over for ourselves to not feel deprived.

  2. If I would find $20 on the road or something, that would just go into my wallet as my play money, but if we’re talking about thousands of dollars, that’s different.

    I think at this moment, any extra money would go straight toward our debts. We are so close to paying them off we can smell it! I think my wife would actually agree on this since we’re so sick of our debts.

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  4. Good timing. I just came across $22500 and have no idea what to do. Paying off CC debt is #1 but do I also pay off all of my car or just some and save the rest for emergencies? Too many options.

    I’m not in your financial situation at all but I’m sure you two can come to an agreement.

    • How does one “come across” $22500???? Just curious, cause that sort of thing never happens to me – lol. I would pay off whichever loan has the biggest interest rate.

    • If you don’t have an Emergency Fund at this point: Pay off the CC and put the rest into your EF. If you already have an EF and can pay off the car and the CC, I’d say do it.

  5. We would likely put 1/2 towards debt, and 1/2 towards something we mutually agree on (furniture to replace what’s getting old and worn), or even split the 1/2 in 1/2, and each of us get to do what we want (ie: new clothes). Hubby’s in “launch” mode with our old/worn stuff these days….he tossed out one of our sub-par Dining Room chairs… something tells me a new Dining Room set is in our not-so-distant future.

  6. We have had this happen a few times in the past twelve months, and any windfalls we get go directly to debt. Once we are out of debt, we will put any windfalls into fully funding out Roth. Once Roths are fully funded, any extra money is free to be spent!

  7. Any extra money that comes in right now goes towards our debt snowball. If an extra $2,500 came our way-it would totally pay off our current snowball, our HELOC. Right now we’re on track to having that sucker paid off by January/February-but it would be lovely to have it gone sooner 🙂 After that’s gone we just have one student loan and our mortgage to go-and then we’ll be debt free woot!

  8. I would split if 50/50 (after the deductions for charity and classroom decorations). Half towards the investments you want, half towards the splurges GN wants (as long as it’s splurges for you as a couple).

  9. How about
    10% donate
    20% girl ninja fun money
    20% debt ninja fun money (and you can save if that’s fun to you)
    50% savings (Roth, house fund, vacation fund – whatever the two of you decide to save for)

    Probably a good idea to set your own percentages now so that as this happens more and more in your married life together you have a plan. Congrats!!

  10. We’ve always said of “found” money: share some, save some, spend some. Sounds like you and GN are on the same page about sharing. I like the suggestions to split half and half on the save/spend, but as always, sometimes circumstances lean more in direction that another, so don’t rule out spending a little more than half of the windfall this time around. Hope you have some fun with the discussion and then again with the final decision.

  11. Will you have taxes taken out of this money? If not remember that 25% or more will go to taxes. For the rest of the money keep in mind that even though you share finances this is your wife’s income. If she does get the contract she also gets a sweet retirement pension benefit (at least teachers in my state do).
    You and your wife will figure out what is best to do with the money. My only advice to you is to really look at your motives for saving and investing.

  12. I like to put new found money in savings before I have the chance to spend it on something frivolous!

    I’d use $200 to pay off my CC debt and the rest to savings, which include vacation fund and e-fund.

    Put your money into savings or Roth before either one of you can decide what to do with it!

  13. Like you said, after giving away a certain percentage, right now I would put 90% of the remainder towards debt. Once that’s gone, I would probably save half and do whatever I felt like with the rest.

  14. Our policy for all “found” and bonus money is this: 10% to the church as a tithe, 5% as a “love offering” to a parachurch organization or individual in need (just an extra way for us to show our gratitude to God for his blessings), 10-15% for each of us as play money, and the rest goes towards a financial goal. We received a small inheritance last week and knowing exactly what we wanted to do with our money really helped us to narrow down our options. Our only real problem now is deciding if our next goal should be getting a truck or paying down our mortgages!

  15. Where the money goes totally depends on where your needs are at. If all your ducks are in a row and all your savings accounts are fine – then spend some. If not, save some.

    I would put $500 into our emergency savings and $2,000 into our wedding fund if it was my cash.

  16. I love the idea of splitting all “found” money between both of your desires. Half goes to what you want and half to what she wants (after you give away 10% obviously!)

    So you get to save a good chunk of money and she gets to play with the other half.

    Which brings me to my next question: are you guys saving for things like vacations and fun days and the like? It may help Girl Ninja to know that saving is a good thing if you’re saving for something she enjoys doing. =)

    • Yeah we do. The trip we are taking in Jan to San Fran is the result of our wedding money. I like to use found money for fun things, but I also think we need to be saving a good chunk of it, or sometimes all. We really don’t need much right now, so I’m trying to persuade GN to thinking this can all go in the bank for now, and if something comes up later we can use it then.

  17. Tell GN congratulations! I had a schoolteacher friend of mine who was in a similiar situationand didn’t get to stay 🙁
    I would always reccomend paying off debt first (especially credit card) then do a 50/50 split between saving and having fun. Us girls love pocket books, no wonder GN fell in love with the chicken purse…lol

  18. Not to be a Debbi Downer, but I thought the plan was to save ALL of GNs income. Just saying…
    With our found money (and by found money I mean hubby’s end of year bonus which we technically always know is coming but don’t know the amount) we usually split 10% between us for fun, whatever we want, no questions. The rest goes into various ‘fun’ savings accounts: vacation and car funds mostly. At the moment however, with the MBA in full swing, we will allocate the remaining 90% to pay the next 3 quarters in full. Yay for no loans!
    Love the idea of spending a bit on GNs classroom. And not that you asked:), but Lakeshore is a great store (the have a teacher discount and mail out coupons quarterly) and if she gets her kids involved in Scholastic book orders she will earn points and can use them to get free stuff for class.
    Good win this weekend by the way.

  19. Maybe this would be a good chance for you guys to start a vacation fund – it’s something that would fill her desire to spend some of the money you all work so hard to save, and it would fill YOUR desire to have goals & be spending only based on plans, as opposed to whims.

    Personally, I’d just look to where my most urgent/important/logical place would be. For instance, if I were saving for a house, I’d put the money there. If I were saving for a wedding, it’d go there, etc. If, like you, I wasn’t saving for anything in particular (aside from your house fund), I’d split it between responsible (house fund) and FUN (vacation fund).

  20. If it’s something smaller like $50 or less and it’s literally found cash, I usually make sure I spend it on altruistic purposes and not on myself. So it either goes to a nfp donation, to buy food for animals or to a homeless person on the street (yes, even if I only see crackheads).

    If it’s something like this, it’s either something I’d been meaning to save for (my work cash award went towards a new vacuum) or savings.

  21. I would put it towards a ‘move out of California’ fund!!! I have always lived in Florida, the land of no state tax. There are a bunch of political loons over there in Cali that want to FORCE you into giving your money to them so that they can turn around and give it to who they see fit to give it to.

    PS. I would save it all.

  22. Personally, i would put most of the “found money” into saving. In your case, you better split it 50/50 though. 🙂

  23. I would be having a tough time with this one as well. JZ and I just got engaged (!!) and it sounds like we will be eventually settling in Canada, so I would be putting a big chunk towards debt reduction, but would also be throwing money towards our wedding fund and travel fund- likely 50%, 25%, 25%. If only!

  24. If you are in debt sure you pay off the debt. Being that we are not in debt (at least for another 30 days) I would buy a washer/dryer for our new house. Closing in 30 days baby!!!!

    But if we didn’t have the house coming up I would say, put it in the bank or invest and earn some interest. Since you already have a trip planned, just got off honeymoon, etc. I wouldn’t spend too freely.

    However, like another poster said, since it is her money, she should have a greater say. Yes it is both of yours…but since this is such an accomplishment for her, I would let her choose this go round. You have a lifetime to compromise!

  25. If I got that kind of “found money” it would definitely go to my house buying fund, since I’ve got a lot of what I need already. Or into my Roth IRA since I’ve almost done for the year.

  26. Found money goes wherever we need it most: bills, necessities, maybe some fun stuff. We never manage to save any of it… which is why I’m reading more personal finance blogs.

  27. Extra money goes toward retirement savings or paying ahead on the mortgage.
    I am old and boring. And we are happy spending from income, the regular budget.
    $3000? Perfect amount to put in your IRA whichever flavor you prefer.

  28. No hard and fast rules. Majority is usually saved. Depending on what’s going on at the time, some could be used on anything from gifts to clothes to electronics to holidays.

    Right now, it would go straight to my travel fund. Never travelled out of the country with BF and we have some world seeing to do!

  29. It’s entirely dependent on personal choice and situation.

    I’d put it every last dime into the house down payment account.

  30. We have a breakdown rule. All monthly extra goes 50% to savings or mortgage, 25% to the vacation account, and 12.5% to each of our fun money accounts. 🙂

  31. In general our rule for bonuses or any other unexpected windfall is that we take a little off the top (never more than 10% but often less) as “spending money” as a reward for ourselves, the rest goes toward debt until all debts are paid off.

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