Free money? What shall we do?

I’ve gotten a few emails and chatted this up somewhat ad nauseum with friends about the money coming our way from Bush’s economic stimulus plan. *sigh* Let’s be real here folks. We are in a recession. However, remain optimistic and protect yourselves. If you get an extra check from Uncle Sam this year, here are 3 tips on what to do with it.

1. Save the money

Put it aside and SAVE IT. Please don’t spend it thinking that this somehow helps the overall situation going on with the economy. If you are in one of the industries projected to see lay offs then you might want to pad that emergency fund. I can’t stress this enough. Be smart. Don’t make plans to buy a new TV or get yourself into more debt, see this as an opportunity to save your money and secure yourself in the event that things get worse.

2. Pay down debt.

If your emergency fund is at its goal, then pay down debt. Don’t get into more debt, but pay it off.

3. Necessities
If you must purchase something, then make sure it is something that has long term value such as a needed kitchen appliance, auto repair etc etc.

My thoughts? This is just money that we give them during the year anyway, they are just giving us more of it back this time around. :) I fully believe that we will pull through, we just need to be patient and wise during this time.

Short and sweet. :-) Hey, its a no brainer. Protect yourselves first.

What are your plans if you get an extra $800 or $1600?

  • Alcott Vizes

    Really good information you have shared here which will be helpful to so many real investors. If you have more information then please post them here.

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  • Victoria

    I see this as an opportunity to invest, not squander on commodities that devalue. Do not buy a car, do not buy an iPhone, but also do not do nothing with the money. Recession or not, everybody benefits when we put extra money into income-generating ventures that create opportunity and increase productivity. So instead of leisurely holing up during recession, with $800 we might probably take the risk to: (1) take college courses to increase our skills for the next job, whether it’s language or engineering applications or software or vocational (2) put money into an investment property and take care of upgrades/maintenance of paint, walls, flooring, or manicuring the lawn to keep up property value (3) buy some undervalued shares of mid-sized companies (4) invest the maximum into 401K or similar retirement plans (5) partner with an old friend to seed a small enterprise and aggressively build your network by spending quality time with future clients (6) pitch business ideas to larger companies. That’s how we’re going to get ourselves out of recession, and personally prepared and prime for the well-compensated jobs of tomorrow.

  • Ginger

    Im brainstorming about the student loans, easy does it!

  • Yakini

    LOL! Yep, nice and easy does it. that’s the only way to go about getting yourself out of the debt hole!

  • Ginger

    Yaki you sound like you had an epiphany there!! LOL! I hear you though, I just took a look at my debt reduction plan and it is one day at a time!

  • Yakini

    It would go straight on my credit card!

    Seriously. My cc use was outta control in 2007, but 2008 is the year Im taking it all back!!! I was telling my girlfriend the other day that I now view my spending/cc use like any other addiction. And when you go to AA or NA for support/treatment they encourage you to take it “one day at a time.” So even though it seems silly to use this analogy with a cc, that’s how i view my past habits. Its really hard, because I had gotten totally dependent on the cc at one point…. but now i feel good about the clean time that i do have, although its not much. At this point I havent used it in 2008, so Im 24 days clean!!! Feels so good!!! At the 30 day mark I will be hella proud…… 2008 is all about paying down the debt, baby!!!!!