For the longest time, whenever we “found” money, we’d follow a simple ration: half to debt, a quarter to savings, and a quarter to spending. (What’s found money? Money you weren’t expecting to have – a gift, overtime, side hustle, reduced spending, etc.) This is how we paid off our six figure debt and bought a house (at the same time).
For years, that ratio was simple and straightforward and applied to any sum – whether $10,000 or $100 (or sometimes even less).
But now that we’re debt-free (except for our mortgage), it’s time to re-evaluate that ratio.
Part of the reason behind this blog is to explore what it means to become (and be) an ethical millionaire. For me, a big part of that involves giving back wherever I can. I don’t want to wait until I’ve achieved some nebulous goal, partly for the same reason that I don’t want to wait to travel. You never know what’s going to happen, and as far as we know, you only live once.
So that ratio needs a re-vamp, and I think it looks something like this:
Found money = 25% (spending) + 25% (mortgage) + 25% (savings) + 25% (charity)
That’s not quite right. I don’t think we need to increase our spending. We have everything we need (and way more, frankly. Privilege check!)
Probably something more like:
Found money = 50% (mortgage) + 25% (savings) + 25% (charity)
That’s better. Now I just need to “find” some more money, and figure out what charities I want to support!