ill do what i want with my economic stimulus check

April 7th, 2008

I’ll Do What I Want With My Economic Stimulus Check

The media has been abuzz in recent past about the economic stimulus checks and what the government wants us to do with them.  Stimulate the economy!  Go out and spend!  The government depends on you using your check wisely – which means spend it!  Well, if the government depends on telling me what to do with my money and expecting me to listen, then they should have made alternate plans.

We are not 100% decided about what we will be doing with our check (although we’re pretty close to 100% decided it will pay down another chunk of my spouse’s student loan) but I am already tired of hearing the idea that “the government wants us to spend it”.  I’m not opposed to people spending it if they choose to – until we got the good news about my insurance covering my wisdom teeth removal, we were planning on using the check for that.  But I’ve never been a fan of gifts with a caveat – the “use this money for x” idea.  If you want me to have x, give me x.  Don’t give me money and tell me it has to be used for x.

And worse than that, this stimulus check isn’t a gift.  It’s my money.  I pay taxes, the government has decided to lower taxes next year, and they’re giving some of that money to me now.  It’s my money.  Don’t tell me what to do with it.

I’m honestly not clear on why paying down debt isn’t stimulating the economy (I’ve never taken an economics class) but regardless if we choose to do that, or we choose to spend it, it is our choice.  We have to decide what to do, and we have to live with the consequences.  And in deciding what to do, we have to decide what makes the best economic sense for our family as a whole, not what the government thinks is best for us.  As I said, it’s our money.   I won’t treat it any differently than I would treat any other money that comes into our household, and will use it to further our financial goals and dreams as I do all of our income.

Besides, my brother and his girlfriend are using theirs to go on a cruise.  That’s enough stimulating for all of us.  ;)

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18 Responses to “I’ll Do What I Want With My Economic Stimulus Check”

  1. I’m going to buy new prescription sunglasses and replace the lens in my everyday glasses, and then get that money refunded from my company’s health plan. Then put it towards paying off my debt :) It’s a little loopy, but solves two problems.

  2. Great post – I’m not even American and I still get annoyed at bloggers who are deep in debt but want to blow the stimulus cheque on something stupid “to help the economny”. If you are deep in debt then you have already done your part (and more) to stimulate the economy.

    I also think that paying off debts will free up your cash flow in the future which will help the economy later on (ie when you have more money to spend on stuff).

    Mike

  3. Our check is going into savings.

    I’m getting my MBA and am actually in an economics class right now. We just discussed rebates and how the gov’t tries to stimulate the economy.

    Economic “output” consists of: consumer spending, capital investment, and government spending. Consumer spending is stuff you and I buy (TVs, groceries, etc.), capital investment is building factories, buildings, etc. (employs workers, which trickles down), and government spending is … government spending.

    So the economic idea — from my little understanding — is paying off debt is just giving money back to the company you borrowed it from. It doesn’t create a commission or a job or anything like that. The company wants to lend money (credit card companies and banks are in that business, right?), not keep it. So it doesn’t do as much good as you buying a TV.

  4. I agree. We are using ours to put towards our last debt– our car.

    I figure there will be enough other people out buying junk and taking vacations… I don’t need to stimulate the economy.

    I think this rebate is going to come back to bite the Feds in the a$$, though.

  5. I completely agree! At this point, we plan on putting the stimulus check into our savings account. I don’t feel bad about doing that at all. That’s what is best for us.

  6. I agree with Four Pillars. I know I’ve certainly done more than my share to “stimulate the economy” in the past eighteen months. So, thanks Feds for helping to finally pay for all that!

  7. We just started our debt snowball. We will use the rebate to finish paying off our smallest debt and then move to the next. I have been helping to stimulate the economy long enough. It is now time for me to stop spending and get out of debt.

  8. Mine will go to basic expenses during the month of May. I have very little contract work next month and that check will provide us with food and pay a bill or 2 and I might just buy a few small personal items for myself!

  9. Almost all of ours (and our rebate) will go towards the car. Very exciting! The government will have to deal…and at least we’ll still be participating in the economy. Even if it’s not in a way they think will stimulate it.

  10. Continuing that thought—really the only “wrong” thing one could do is put it in a sock. Whether it’s in the bank, invested, spend, debt repayment, it’s still influencing the economy somehow.

  11. You are right. The stimulus effect of spending is that if you actually purchase a new TV, then the store needs to replace that TV so the factory makes another TV… The store, shipper, factory, supplier to the factory all pay staff to carry this out…

    If you just sit the check on your dresser nothing happens. If thousands of us do that maybe the store cuts the hours of a staff person, they then don’t buy a air conditioner…

    If you pay down debt initially very little happens. However, two things are possible (both good), in addition to your financial position improving. Either the financial institution will lend the money to someone else who can then buy a TV (which may be a personal finance mistake but would help the economy grow) or the financial institution firms up there shaky foundation (a small bit). Given the huge problems they face this is a good thing. However it doesn’t contribute to immediate economic activity and growth (no paying the store, and factory and…).

    But those that promote the spend your government check even though the consumer debt is now $2.54 trillion in the USA are bozos. It is just like someone saying the way you improve your current trouble is get another credit card and then you can afford the new iPhone. What we need to improve the economy is not short term appearance of improvement but fixes to the weaknesses we have. And to do that we need more paying down of debt – not the opposite.

    Your plan is smart.

  12. I will be contributing mine to one of my favorite charities: http://www.Crown.org (Crown Financial Ministries). It will help others with their money situations by planning, as it has helped me. Check it out – they have a great podcast!

  13. Our check is going to my husband’s credit card. Between our tax refund and this “stimulus” check, my husband’s credit card balance should be back down to 3 digits. It has been hovering around $4500 for almost a year now. I am so excited to be so close to paying off that CC! We paid off mine in Feb. After that, there is only the car and student loans (and the mortgage, but it doesn’t count in my opinion). Thanks Uncle Sam!

  14. Economic Stimulus check response:
    Awhile ago another stimulus check was issued. We did help stimulate the economy by buying a new refrigerator. At the time we needed one so it worked out fine. Everyone paying off their credit card debt etc is doing the right thing with their checks. No worries. The problem was that the purchases were already made. Now there is a way to pay off some of the economic stimulus that already occurred via the credit card. I agree with Four Pillars comment. Please realize that you already helped the economy before you rec your check to pay off the purchases.

  15. Actually, it’s not even your money that they are giving back to you. Our government doesn’t have any money. Every year it spends more than it collects, and has a large debt as well. The $600 you receive will either have been newly printed, thus devaluing all your other money by about $600 (if you are Mr. Average) or else it will be newly borrowed from a country or bank that actually does have money.

    If that doesn’t worry readers of this blog, I don’t know what will. It is incredibly irresponsible, and if this were a household we would be shaking our heads in shame (and debt).

  16. Today is November 18, 2008. My name is Sheilah and I work as a debt collector. We’re seeing a horrid crumbling economy right now. I’m asking if we get another economic stimulus check, don’t pay your debts. These debt collection companies are falling, too. If you pay off now, chances are you’ll waste that money on being “debt free” or you can wait it out. Debt collectors are going towards issuing debt settlements which are at a portion of what you actually owe. Buy a new T.V., a new computer! Buy the most expensive loaf of bread from your state…just once! The government might just be pr*cks, but we shouldn’t be just looking out for ourselves when our country needs us. Greed is the root of all evil.

    I could tell everyone “PAY your DEBTS!!” and bask in the glory of bonuses each month end, but what would that do for the 16,000 people unemployed with children to feed?

    What is an American?

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