I Can’t Wait To Stimulate the Economy
I haven’t really said anything about the economic stimulus package that has been being discussed by the US Congress because I don’t believe things are going to happen until, well, they do. But now that Congress has approved it, it seems like it will become reality, so I decided it was safe to acknowledge it. It looks like we’re going to receive $1800, because we make nowhere near the $150,000 limit for dual filers, and we have 2 kids. So $1200 for married filing jointly, plus $300 per child.
I should be irritated, for I doubt this is overall a good idea for our country, to send everyone some money back. But I’m not, because, well, I’m excited. It is a good thing for me, and I’m being shortsighted today. And of course, I should stick that check right on my debt, well, my spouse’s debt, and reduce his student loan balance. And originally that was my plan.
But now, I’m thinking about stimulating the economy with it, like we’re “supposed” to. But not by buying a big screen TV or something like that. I am thinking, maybe, of getting my wisdom teeth out with it. I haven’t decided completely, and since right now, we still have about $500 left in our FSA (Flexible Spending Account for healthcare) I wouldn’t need to use the entire check for my teeth, but I am considering using the portion I would need to pay the balance of the procedure. It’d be nice to get this taken care of sooner rather than later so I can stop thinking about it. And then the money I have budgeted to save for the procedure can go directly to debt instead.
I haven’t decided yet. When I first heard about the stimulus package, I laughed and thought to myself “There is no way I am spending that on the economy, I am paying down my debt, too bad plan for America” but now, I might be doing what the President wants after all. At least, if getting wisdom teeth out counts as stimulating the economy.
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February 9th, 2008 at 8:31 am
We think alike! Since our health insurance doesn’t cover office visits or prescriptions, I plan to use the rebate for a check up and for my 19 year old’s prescription medications.
February 9th, 2008 at 11:12 am
Yup, that’s pretty much my thinking too. It would be nice to put the entire amount toward my student loans, but we need a new washer so I think the money is going to go toward that. I won’t need all of it for the washer but enough of it that I’ll feel like I’ve fulfilled my patriotic duty.
February 9th, 2008 at 11:14 am
Just be careful. I have only heard in two places (one of them being Dave Ramsey’s show last night) that this is not a “bonus” check but an advancement on 08 tax filings. So if you get $1800 then you will get $1800 less in your tax returns when you file 08 taxes (or in my case end up owing). Our $ will go in the bank for a year and hopefully we will earn a little interest before we have to give it back.
February 9th, 2008 at 11:16 am
We’re also supposed to receive $1800 and I can hardly wait. Heck, wisdom teeth, big screen TVs, new washers…whatever floats your boat as long as the money goes back into circulation rather than sitting in an account of some sort. That temptation to pay debt is STRONG though.
February 9th, 2008 at 12:30 pm
I think the wisdom teeth is a great idea. Ours is hitting our house downpayment savings fund so it will eventually hit the economy in 2 years.
Spend it save it, I think everyone should do what they want with it. I get bothered though when I read other people tell someone that they have to spend it (which you haven’t done just other commenters).
February 9th, 2008 at 1:22 pm
I’m with Dawn. “So if you get $1800 then you will get $1800 less in your tax returns when you file 08 taxes.”
I haven’t heard anything about this tax relief plan specifically but this is EXACTLY what happened last time our government “gave” us a little present. I remember being shocked and disappointed when I did my taxes that year. The government wanted the $300 back that they’d given me.
February 9th, 2008 at 2:47 pm
Do it, get your wisdom teeth done! Such a good use of the money and then the dentist can stimulate the economy!! But I second what Dawn says, it does appear to be more of a pre-bate, or an advancement on next years taxes, so just be aware of that. (Of course I don’t really get the American tax system at all, it seems a lot more complicated than in the UK or Canada).
February 9th, 2008 at 3:31 pm
Unless the wisdom teeth are actively a problem, you might want to leave them alone. I had mine done in my early/mid twenties and was glad to see them go. My husband is in his mid-30s now and still has his. The last time we talked about it, he did some research and found some medical sources that say that it is actually hazardous to do them after a certain point. I forget the details, but I do recommend a bit of research.
February 9th, 2008 at 6:25 pm
Dawn is correct. All this stimulus check is, is an advancement on your 2009 tax returns. The US gov’t is giving you your own money back. You’ll be losing the exact same amount when you do your taxes in 2009. Dave Ramsey is right on.
Your best bet is to put it in a bank and earn a little interest or pay down your debt because either way you lose. There is no free lunch. There is no such thing as ‘free’ money.
And our wonderful gov’t has to borrow this stimulus money from China at exorbitant interest rates and guess who is going to be paying it back? Go look in the mirror.
You don’t SPEND MONEY to fix the economy.
Has your debt or spending habits helped you?
Give me a break.
February 9th, 2008 at 7:04 pm
Um, Boomie, you may not have read the whole wisdom teeth saga - but I have to have them out. If I don’t get them out I lose the teeth next to them too. I have a plan to save the money a little at a time and put it off til September, but I’m contemplating doing it when the check comes instead so I can deal with it proactively before it is too late. It isn’t like I’m buying a plasma TV. I’m treating a health-related issue. How you can compare that to “spending habits” I have no idea.
And, Dave Ramsey can be a cool cat and the smartest guy ever, or whatever, but it’s been stated in the media over and over that it isn’t like the last one and isn’t an advance on the 2009 taxes. So who knows who is right. But, even if it is, I’d have the money I was saving for the wisdom teeth to return it, if so.
@Amy P - they don’t bother me but my gums are actively receding around one in particular and the other three to a lesser degree. My spouse also has his still and his are fine. Mine are going to kill the teeth next to them.
@Lisa - well, I am going to argue that wisdom teeth removal is way less fun than a plasma TV, but… heh.
February 9th, 2008 at 7:43 pm
First I’ve heard of this being a “pre-bate”. With those amounts, I’d really think they need to be making that VERY clear, otherwise people are going to be in a jam come 2009.
Advantage of having 6 kids, I’m getting $3000. ALL going against my debt. Hate to not stimulate the economy, but I hate having to pay interest more!
February 9th, 2008 at 7:53 pm
I haven’t been keeping up with this, so I don’t know whether it’s a pre-bate or not. We’re either going to use ours on debt or dental bills. DD needs 3 teeth pulled for her orthodontic treatment, and we have no dental insurance, so I may be with you in giving my money to the dentist.
February 9th, 2008 at 8:26 pm
I seem to remember your health spending account resetting with the fiscal year? I’m wondering if you can work something out with your dentist whereby you pay $500 now and then the rest later when you have the money in the health spending account again. That way, it’s pre-tax! And then you can still use the tax rebate check however you want (or maybe towards whatever you’d have to scrimp on to put extra money in the health account). I’m not sure if this makes sense.
That being said, I thought we weren’t going to see the checks until June or so?
February 9th, 2008 at 8:52 pm
Have fun! I suggest budgeting a quart or two of ice cream, some carnation instant breakfast, and some babysitting if you don’t have lots of family support. Also, getting a ride straight home is a good idea, if at all possible.
February 9th, 2008 at 9:00 pm
@ glblguy- The pre-bate discussion has popped up in several places, I saw it mentioned on Free Money Finance the other day, and MSN money. Not saying it’s for sure just letting you know about the articles. Of course if you are putting all to your debt I imagine you’ll come out on top anyway!
February 10th, 2008 at 12:00 am
lol my tooth is the first thing i thought about aint that sad!
February 10th, 2008 at 5:30 pm
Isn’t this kinda like a payday loan sponsored by the government?
February 10th, 2008 at 5:59 pm
Only if the government charges me 900%+ interest.
February 10th, 2008 at 7:52 pm
Actually what I’m hearing is the rebate check is not going against next years taxes. It’s actually a rebate on top of your regular tax refund. This makes more sense because I was wondering how pouring money into the economy this year and then next year coming up short would help anything in the long run.
February 11th, 2008 at 8:27 am
I work for a large tax preparation company that is hereto unnamed for legal reasons. That being said, the stimulus package is NOT a rebate check in addition to your regular taxes. It’s forward on next year’s taxes, much like the last time the gov’t so kindly decided to give us our own money back.
February 11th, 2008 at 8:51 am
My understanding is that while the tax rebate *is* being funded as an advance on our 2008 tax return, it still is not exactly going to be ‘paid back’ in most circumstances. The tax is being funded by eliminating the tax owed on the 10% tax rate, therefore your tax liability for 2008 will be LOWER than it was for 2007. As a result, if you did not adjust your withholding, you would be getting a comparable extra amount added to your refund received in 2009, instead the extra amount is being given now.
Also, from what I understand, if your tax liability for 2008 is $0, you do not have to pay back the money you already received.
All of this said, I *really* hope there is a letter enclosed with the check explaining this all in relatively clear (it is the IRS!) terms.
February 11th, 2008 at 9:13 am
I guess we’ll all find out next year who is correct
And I will be down 4 teeth, hopefully
February 11th, 2008 at 10:31 am
Here is a link that explains the rebate checks:
http://money.cnn.com/2008/02/08/pf/taxes/rebates_what_you_need_to_know/index.htm?postversion=2008020817
The rebate check is a one-time tax cut. It is an advance on a credit you will receive on your 2008 return. I think it is better to know the truth now and act accordingly than find out next year.
Paid twice: when I use the word ‘you’ or ‘your’ I do not mean it in a singular sense. I mean it in a plural sense as in ‘you people’. I did not direct my comments to you and the health of your teeth. I meant, all of us, as in ‘you’. All of us have been consumers and it hasn’t gotten any of us anywhere. Why must our spending then continue and be promoted by the gov’t? Spending and borrowing hasn’t gotten them anywhere either.
February 11th, 2008 at 11:42 am
From the link you posted Boomie, I read that it is a one time tax cut, and that if they give me more than they should have, I keep the difference. I quote:
“If it turns out your 2008 income was lower than in 2007 and you should have gotten a lower rebate, you get to keep the difference.”
So, it is an advance on a credit that only exists in 2008, and if they screwed up and gave me too much, I don’t pay back the difference. Therefore, it follows that the rebate/advance/whatever we call it check will not change my tax liability in 2008 vs 2007.
That’s what I get from reading the CNN article, anyway. That I’m not going to owe $1800 more now in 2008 than I would have if the check and the one time tax cut did not exist.
Correct me if I am wrong. I’d like to know if my wisdom teeth fund can go to debt reduction once I get the check
I’m not really all that interested in stimulating the economy, per-se. i do like the idea of getting my teeth taken care of, though.
Thanks for clearing up the use of “you”… since the comment was on my site and addressed to my post, it seemed “you” was me.
Anyone who wants to send my spouse a LCD TV though, he will accept it. lol (kidding! well, he probably would so maybe not so kidding)
February 11th, 2008 at 1:37 pm
I plan on dropping the cash ($600 for me) into a savings account…make a little money on interest before I have to give it back when I file my 2008 taxes
February 11th, 2008 at 1:43 pm
Paid Twice, Your teeth are very, very important and yes, should be taken care of. I just wanted ‘others’ to realize their rebate checks may not be the free ride they thought it was. I dunno, call me silly.
Anyhow, I enjoy your blog. I check into it regularly to see how you are doing.
Thanks.
February 11th, 2008 at 2:36 pm
Wisdom teeth? Ouch! Young decided to be frugal by skipping the IV. That’s a bit more than I’d like to do myself.
As for whether it counts toward stimulating the economy, I’m pretty sure that any sort of spending counts. Though why saving and investing doesn’t count is beyond me.