Spending The Stimulus SLOWLY
May 5th, 2008 | by rachel |
For the last 2 or 3 months, we have been bombarded with talk about the economic stimulus package (i.e. tax rebates). Since the legislation was passed to actually fund the rebates, the economy has gotten significantly worse. Finally, the money is actually rolling into bank accounts and it seems that the government (and the retailers) want us to spend the money as quickly as possible! Never mind that we have heard nothing but hype, political and otherwise, surrounding the rebate money since January. Economic experts have argued about whether or not it will actually help. We’ve been told that the money is robbing our children and grandchildren of their future so that we can have a new (fill-in-the-blank with any item that you want instead of need). As I write, my bank account is still waiting for the rebate money to be automatically deposited. When it is, there is no doubt that I will spend the money. Don’t look for it immediately, though. I’m spending the stimulus slowly.
S - Whatever the amount of your rebate, only spend it a half at a time. If you get $600, spend $300 and put $300 in savings. Later, spend half of what is left ($150) and leave the rest in savings. Even later, spend half of that ($75) and keep going like that. Theoretically, you’ll never spend all of it.
L - Limit the types of items you will allow yourself to spend it on. By not spending it on restaurants or alcohol, you can insure that it goes for something that doesn’t get consumed quickly. If you designate it to only be spent on gifts, you can save it now and use it to pay cash for Christmas in a few months. You get the idea!
O -Opt out of advertising that tempts you. If you are anything like me, you don’t need someone sending you ideas (via direct mail or e-mail) about how to spend your money. If you find yourself being tempted by all the “opportunities”and “pre-approved” that arrive in your mailboxes, take a few minutes to take your name off the list.
W - Wait until tomorrow. When you find something that you think you must have, especially if it’s something you were not planning to buy before you saw it, just wait. At the very least, wait until tomorrow. If possible, wait 2-3 days. After a little “cooling off” period, if you still want it as much as you did to start with, go ahead and spend the money. If you can train yourself to delay gratification for just a little while, you may decide you don’t really want it and save yourself some money in the long run.
L - Look for ways to spend your money locally. You can maximize the effect of the stimulus rebate by spending it with local retailers in your area. Obviously, with everyone cutting back as much as they can, small, independent, local businesses stand to suffer quite a bit. Some will even have to close their doors. If you decide to use your stimulus check for stuff, look around and see if you can stimulate a local merchant in your area.
Y - Yield to necessities. If you have bills that are not current or health issues that need to be addressed, you have no choice but to spend the stimulus money to take care of those things. If that is the case, spend it and don’t think another thing about it. Your basic survival is most important. Likewise, if your stimulus check can help you completely eliminate debt(s) that you have hanging over you, spend it as fast as you can and get rid of those bills!
No matter what you do with your stimulus check, don’t do it carelessly. Make a specific, conscious choice about how to spend it in the way(s) that benefit you and your family the most. For me, I think I’ll let it sit in the bank for a few days before I send it slowly on its way.