Stimulus Checks Are Coming - Making Smart Choices

So, the stimulus payments from the federal government have begun to appear in bank accounts across the country today. Millions of Americans have visions of dollars dancing in their heads as they continue to refresh their online banking pages, waiting for the balance to go up a few hundred dollars, courtesy of the government. People who are expecting a paper check will have to wait a little longer, but their dreams are certainly just as full of that money burning a hole in their pockets.

The purpose of the aptly named stimulus checks is to stimulate the economy. The government is hoping that Americans will run to the stores and buy, buy, buy as soon as the money arrives. People have been feeling the crunch of higher gas prices, rising grocery costs, and soaring utility bills, and these checks will certainly provide exhausted Americans a feeling of financial freedom, as fleeting as it may be.

However, in order to really steel ourselves against a possible recession, Americans need to be smart with these stimulus payments. Sure, a new plasma screen television would look sharp on our walls, and we’d have hours of entertainment while watching it, but in the long run, there will be many tears as we have to sell it on eBay in order to make our mortgage payments. Instead of running to the stores and buying on impulse, what we need to be doing is putting our money away. Making wise choices. Making investments in our futures.

Some of my friends have decided that their checks will go immediately into their savings accounts. Even those with low interest rates feel safer having that money in the bank for the rainy day that seems to be looming on the horizon. Some of my more investment-savvy acquaintances have decided to buy stock or put their stimulus money into IRA’s and mutual funds.

My husband and I are taking our money and replacing our front window. It leaks when it rains and if you sit on the couch in front of the window during the winter, you are certain to get a stiff neck from the chill. We feel that investing in our home is our smartest move at this point. Not only will it help reduce our heating bill in the winter, but in the long term, it is a definite way to get a return on our investment. (As long as we keep the house until the market turns around)

So, I encourage you to think twice, even three times before impulsively spending that stimulus payment. Think hard about how that money can work for you instead of working for the government.

By: Amy Bozza
Published: 05/06/08

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14 Posted Comments:

agreed

@ 12:20 pm 05/06/08 by Tiffany

I agree that people need to consider using their check for a wiser purpose than a TV or any other new toy. The good news about what you're doing, Amy, is that you are still stimulating the economy by purchasing a product and paying for a service. Great Article! tbs727

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So Right!

@ 1:12 pm 05/06/08 by darlene

With the cost of everything soaring and paychecks not keeping up means buckling down, saving where you can and using your resources wisely.
Your choice to replace that window may not be a fun thing but it's a solid investment. With those rainy days coming Amy, you'll be sitting on your couch warm

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Yes I agree.

@ 2:15 pm 05/06/08 by Aimee

You make some very good points. My husband and I just spent a portion of our stimulus check at Home Depot. They offered a $50 off coupon when you spend $250. We needed some things for fixing up/maintaining the house anyway, so I feel like we are investing it wisely as you did. :)

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Amy Bozza's Article

@ 4:13 pm 05/06/08 by James D. Hicks

I think the government needlessly micromanages the economy. Rebates, temporary relazing of gas taxes do little but bloat the government's already dangerously high deficit. It is hard to believe that in the previous administration the governments was out of the red. I suppose this sort of thing is inevitable in an election year but I long for a type of leadership that looks at the big picture and thinks long-term. The economy is a cyclical phenomenon and must me recognized as such. Gimmicks rarely work.

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Amen Sister!

@ 4:36 pm 05/06/08 by Momof7

We are using ours to fix our deck and invest a little in the stock market! I am so excited about taking my "how to trade on the stock market" class next week in Secaucus at the Online Trading Academy! ;)

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Planning Before Spending

@ 5:46 pm 05/06/08 by JanieD

I'll wait until I have the money to decide exactly how to use it. I'd love to make a purchase that will save me money in the future like the article mentioned. Honestly, I want to use it wisely

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Checks

@ 6:00 pm 05/06/08 by emily_hope

We should be getting ours by direct deposit, but it hasn't appeared yet. We haven't actually discussed what we are going to do with the money. Since it isn't actually 'in our pocket' we just haven't really talked about it. Majority of the time we make wise decisions. I'm sure we will come up with a good way to use it or save it.

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How I will spend my check

@ 6:22 pm 05/06/08 by Ann Kiraly

Yes, a new Flat screen would be nice. Many stores are offering deals with gift cards but I hope that the majority of us are too smart to give it all to Sears or Cosco. I for one will be using mine to pay off the last credit card , help with this months house payment and what little will be left if going into savings.

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Stimulus Dreams

@ 2:05 am 05/07/08 by TeriC

I certainly have my own set of dreams. Myheart keeps telling me to update that blue 1970's bathroom....lol! But leave it to my DH to burst that bubble....lol! According to him, we'll be paying off another CC. In my heart of hearts I'm really glad he's so much stronger than me!!!!! :O)

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@ 7:01 pm 05/07/08 by Anne

I didn't think twice in my decision. When I saw that money appear in my account, I immediately set up a transfer to suck it straight into my savings. I didn't even let myself think about what I could spend it on. Ah, feels good :)

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@ 7:45 pm 05/07/08 by Jessica Mauk

Great article. If everyone thought this way, we may not be in the recession we're in!

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@ 8:00 pm 05/07/08 by Michelle S.

Most of the people I know are planning to use that money to pay bills or do home repairs. I think that the check won't be effective in stimulating the economy because so many people need the money to pay their bills and daily living expenses.

It comes at a great time for us because we need a new water heater and roof repair. I will be putting our money into our ING account until we need the money to pay for either of those.

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@ 8:11 pm 05/07/08 by TheRootedNomad

Well said!! I definately agree that we need to be thinking about what we spend the money on in the current economy. Over the past several weeks I have been privey to, or participated in, countless conversations on plans for the stinulus check. I am constantly surprised by the people that plan on, or have already, spent the check on frivolity. Frivolity is fine for those who can afford it. Many of these people are ones I know don't have a savings account of any kind, such as my sister. We will be putting ours in our savings to upgrade our emergency fund to a more comfortable level for the current economic situation. This may not seem to stimulate the economy, however, had we not had this money to upgrade the savings we would be spending less of our paycheck until the savings account reached the level we want it at.

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@ 5:33 pm 06/12/08 by FanOfVolleyball

I could not agree more. We definitley need to be thinking about what we spend our money on in the current economy. As you and your husband are, me and my husband are replacing our front windows.
Thanks so much for the advice, Amy.
I'm looking forward to reading future articles!

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