Most people have heard of unclaimed property, but they don’t know what it is or how to find it. How do you check for unclaimed property and make the most of any additional money coming your way? It’s important to consider how to manage this financial windfall, as we may be inclined to view unclaimed property as more spendable due to mental accounting.
What is unclaimed property?
Unclaimed property is essentially any money that you are owed but haven’t been able to collect for one reason or another. This could be anything from an uncashed paycheck to a forgotten bank account.
How do you check for unclaimed property?
There are a few ways to check for unclaimed property. The first step is to check with your state’s unclaimed property office. Each state has its own office and website, so you’ll need to research to find the right one. You can also search the National Association of Unclaimed Property Administrators website. This site has a database of all the unclaimed property offices in the country.
Once you’ve located the right office, you can search their online database or submit a claim form. If you do find some unclaimed property, the next step is to fill out a claim form and submit it to the office. They will then contact the rightful owner and arrange for the money to be sent to them.
It’s important to note that unclaimed property doesn’t just include money. It can also include things like stocks, bonds, and other assets. So if you have any old stock certificates or bond documents lying around, check and see if any unclaimed property is associated with them.
Make the most of the windfall
We often treat money from financial windfalls (like unclaimed property) less wisely than we would our regular salary. Why is that?
According to the New York Daily News, 70% of lottery winners go broke within seven years. Meanwhile, 80% of professional athletes deplete their income before their retirement. We can attribute it to lavish lifestyles and poor spending habits, but these behaviors happen on a smaller scale. In fact, most people are at risk of poor mental accounting when they receive a financial windfall. (Think tax returns, bonuses, and birthday cards stacked with cash.)
Mental accounting and unclaimed property
Mental accounting is the tendency we sometimes have to spend money differently depending on where it came from or what we intend to do with it. It undercuts your progress with money by treating your windfall from a claimed property as more “spendable” than other income (like your regular bi-weekly paycheck).
If you’re one of the lucky few who have recently come into a financial windfall from unclaimed property, congratulations!
While it may feel like free money, it’s important to take some time to consider how best to manage this newfound wealth. Here are a few steps to get you started:
1. Decide what you want to do with the money.
Do you want to save it, invest it, or spend it? There’s no wrong answer here, but it’s important to consider your goals for the money. If you’re not sure, that’s OK! You can always talk to a financial advisor to help you figure out the best plan for your windfall.
2. Make a budget.
Once you know what you want to do with the money, it’s time to make a budget. This will help you determine how much you can afford to spend or save each month. If you’re not used to budgeting, plenty of resources online or at your local library can help you get started.
3. Stay disciplined.
It can be tempting to splurge on a new car or take a luxurious vacation when you have a sudden influx of cash. But if you’re not careful, you could blow through your windfall in no time. Try to stick to your budget as much as possible while resisting the urge to overspend.
4. Invest wisely.
If you’re planning to invest your financial windfall, do your homework first. There are many different investment options out there, and not all of them are created equal. Talk to a financial advisor or research your options online before making any decisions.
While finding your unclaimed property may take a little work, it’s definitely worth it. So don’t delay; start searching today! You may find a little extra money you didn’t even know you had.