Saturday, January 19, 2008

Stimulus Package: What it would mean for me!

According to news reports, President Bush is proposing an economic stimulus package in hopes of preventing us from slipping into recession. Without getting to wisdom of the plan, I decided to analyze what a $500-800 per person would mean to my family.

For future Mrs. FinanceGuy and I, $1,000 to 1,600 would not be life changing, however, it would be a nice chunk of change in a wedding year.

Possible Uses:

  1. Savings Accounts: At 5% per year, the $1,600 would grow to $5,400 by retirement.
  2. Student Loans:     For the highest interest rate loan, we would save about $750 over the next five years.
  3. Needed Spending Spree: When I bought the house, I was moving from an apartment with one living space to a house with two. Two years later, the living room is completely empty. Using the cash to get furniture would free up savings for other purposes.
  4. Frivolous Spending Spree: Not our style.

Key Understanding: A tax rebate in hand is worth a billion promises from politicians. Until we get the checks in hand, they don't exist and we will not change or plans in "anticipation" of getting something back.

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