What Do I Do with My Economic Stimulus Check?

In May, the government is going to be sending you a check, as part of its $165 billion Economic Stimulus Package, to jumpstart a sagging economy. The hope is that you will cash your check and go right to the store to buy a television set, a cell phone, some gasoline, jellybeans or a mailbox. Anything as long as you spend the money quickly.

On the IRS' website you will find a schedule of how much money you will receive based on your family size and income. Most couples with one child will get $1500. People who earned above the income limits will receive less, while others who paid no taxes at all will still get a check anyway. (I don't understand this, but this is the plan.)

The question is "what do I do with this money?" The smarter answer is clear: Pay down existing debt. ($1500 credit card balance at 18% with monthly payment of $100 takes 18 months to pay off. Save yourself $300 in interest.) If you have no debt, invest it in your retirement savings program. ($1500 at 8% for 25 years will be $11,010.) Do not buy anything with it.

Think for a moment, what bill do you have that you could put this toward? A credit card? Student loan? Your car? Home equity line of credit? House note? Any balance that you have that has interest attached to it?

You know your own finances. Put YOUR own money where it will do you the most good.

If you decide what to do with the money before it arrives, you won't have the pressure of making a choice later on. One less thing to do.