Finally MP Dunleavy is preaching to save in her article. However, she wisely advocates that debt paydown just as important as savings.
She suggests that people use the tax rebate stimulus to stimulate their own savings. Rather than spending it as the Government hopes, people should use it to buffer their savings. Think about the future rising costs of utility bills or gas for the car.
She says the Government is hoping we’ll all dash out and spend it on foolishness. That we’ll help to stimulate the economy. She says that our savings rate in 2006 was below zero, meaning we spent more than we earned and saved nothing.
She says she has a manageable amount of debt @ $11k in home equity loan, but now she wonders if it was worth it? And I gotta agree. Now is the time to reconsider you financial situation carefully moreso than before and rushing out to borrow against your house. The time for treating your home like an ATM is past.
And MP suggests spending 2 or 5 or 10% of your stimulus on fun, this way you end up doing a service to the ecoonomy somewhat.
What did you do with your stimulus? I spent it. But I spent it on car repairs which we were going to do anyway and had to do. Guess I stimulated the economy.
11 responses so far ↓
1 tom // Jul 10, 2008 at 10:40 am
Ours was spent before we got it… I completely forget what it was spent on, so essentially it went to pay off the credit card.
2 vipness // Jul 10, 2008 at 10:52 am
The company I work for ran out of money 2 days before I got my stimulus. It went to pay rent for another month. I’ve now accepted another job. Can’t say I stimulated much.
3 Jim ~ mydebtblog.com // Jul 10, 2008 at 11:14 am
Ours paid debt, paid car repairs, and the other half was set aside for our vacation this month. So while it was saved, it is going to be spent doing something possibly counterproductive like a vacation. We haven’t been anywhere since 2005 so I hope the week will give us the energy to attack our credit cards and student loans when we get back. Most people probably spent their stimulus one way or another. Rising costs affect everyone even if you had the best intentions. Today there are reports out there that the stimulus checks increased retail. I think people are going to spend money regardless of the economy.
4 Fabulously Broke // Jul 10, 2008 at 11:21 am
They’re just hoping that once you spend it, you get into the groove or the habit and just keep going.
One new set of faucet taps turns into a new rug, a new chair, a whole new paint scheme, curtains.. and so on
5 Anonymous // Jul 10, 2008 at 11:57 am
Although we’re still waiting for our stimulus check, we’ve already spent that amount of money twice in the last few months — once on a new transmission for my car, and just last week on the purchase and installation of a new dishwasher. The $1,200 for my car came out of savings while we put the dishwasher on DH’s Golf Digest Master Card where he charges all his business expenses (he might was well get points good for free clubs). So when our stimulus check comes, we’ll just use it to pay off the dishwasher charge.
Before either of these replacement needs came up, however, we had planned to use our stimulus check toward the purchase of a new dining room table. Now that will wait until after our new roof is installed this summer. Having to fork out approximately $16,000 for a home repair makes us want to hang onto the balance of our savings and build it up a bit more. Thankfully, we have no debt except our mortgage (which will be paid off in six years) and about $60,000 in money market accounts to see us through these tough economic times.
Barb1954
6 Livingalmostlarge // Jul 10, 2008 at 3:12 pm
Sounds like a lot of people were “spending” their stimulus. I have to admit that we were going to do the car repairs anyway but we lazy and waiting until the weather got better for all the repairs.
The bonus was we didn’t know it would end up being so much in repairs!
7 Kristy // Jul 10, 2008 at 3:13 pm
We saved ours. At this time we don’t really need it and are not sure what to spend it on.
8 FHR // Jul 11, 2008 at 9:28 am
I went to Cozumel for a week. Does that stimulate their economy or ours? Both, I guess since I booked the flight with a tour company here, flew a Mexican airline that left out of a US airport that is probably financed with German money, stayed in a Mexican hotel that is most probably owned by a European/Chinese/Japanese/Aussie company, spent Mexican pesos in the downtown square eating/drinking and (shopping) at restaurants (shops) both locally/foreign owned, and paid for parking in a US parking lot.
Oh yeah, I guess it’s a global economy when we spend now.
9 Carolyn // Jul 11, 2008 at 10:21 pm
We just got ours this week. $1500. Nice.
We’re planning on buying a fire/gun safe - $500; the rest will go into our house/car maintenance fund (savings). We’re also considering buying some mattresses for our guestroom, but haven’t decided for sure — that’d be around $400. For now though, we’re looking at spending $500 and saving $1000.
10 LivingAlmostLarge // Jul 11, 2008 at 10:54 pm
Funny how many people are spending it on things they would have probably have bought anyway.
11 billy akerman // Jul 24, 2008 at 1:22 am
Ive been 100% debt-free for some time now. I used my stimulus check to do just that in my investment account.
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