Why I Am Glad The Economic Stimulus Check Is Coming Early
April 28, 2008 by Pinyo.
As some of you may know the economic stimulus check is coming one week early! You might say, “Hey, that’s old news.” Well, I am not here to tell you about the rebate check coming week early (this week instead of next). I am here to share with you why I am happy that it’s coming a week early.
One year ago she got pregnant…
The story starts about one year ago in mid-March. My wife missed her period, so we went out and bought a home pregnancy test
Then we became a single family income…
Fast-forward to Thanksgiving 2007 and our family officially became a one-income family. This was where our financial situation got a little more interesting. We used to being able to fully fund my 401k and add a little bit each month to our savings.
But now, our savings account has been going up and down like a roller coaster — but more down than up. I could reduce my 401k contributions, but that’s not what I want to do. So something has to be done.
We tried to steer our savings in the right direction…
I knew that my income alone wasn’t enough to support my family without either (A) sacrificing our retirement savings contribution, or (B) earn more money. So I decided to go with “B”.
I knew that blogging could earn money, so I decided to give it a shot and started Moolanomy in July. By October, it was starting to earn a meager amount and the income has been growing steadily ever since. This new source of income is enough to help offset our added expenses.
But then the bills came…
Things were looking good until bills and other financial obligations started to hit us:
- December 2007
- $4,000 to finish off our 2007 IRA contribution
- $780 for quarterly property tax
- January 2008
- Credit card bills for Christmas presents
- Electricity bill went up from $125 to $172
- February 2008
- Gas bill went up from $175 to $189
- March 2008
- Another $780 for property tax
- And a whole slew of hospital bills…
- April 2008
- Found out that my brokerage firm mislabeled $2,000 as 2008 IRA contributions instead of 2007. In order to fix this problem in time, I had to contribute another $2,000 before April 15th. Although I intended to fully contribute in 2008, I wasn’t quite ready at that moment.
But we also got some help…
- Steady income from the blog
- Tax refund from the IRS and NYS
- And finally, the economic stimulus package rebate check!!!
Why am I so happy…
Right now, I have about $1,700 outstanding on my Citi credit card. This doesn’t bode well because I have less than $1,000 cash left in my account. Although there’s one more paycheck before I have to pay the balance, it would be a big hit to the account. So this stimulus check is coming right on time!
What are you going to do with your economic stimulus check?
This article was featured in:
- The Carnival of Money Stories #58 hosted by Free From Broke. For more information please visit the Carnival of Money Stories.
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- May 1, 2008: Be Wise With Your Economic Stimulus Tax Rebate | My Super-Charged Life
- May 6, 2008: Carnival Of Money Stories #58 - Dollar Coins Edition | Free From Broke
- May 6, 2008: 2008 News Archive | Moolanomy
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Our stimulus check is going towards our “6-month emergency savings” fund that we’re starting. I believe our tax refund is also going into that savings fund. We’re not spending a dime.
50% to credit card debt; 50% to cushion the checking account (sort of a “pre-emergency fund”).
mine is going to go to my etrade savings account to earn some interest and toward the end of the year I will put it in my IRA. I really like your blog!!
I think I will put ours into our money market fund.
You know, I really enjoy it when bloggers share their personal stories - struggles and successes. It’s inspiring. Thank you.
Great post! We’re adding to our meager emergency fund. It’ll be exciting to see it grow, since it seems for so long we were behind on bills… Glad to hear you’ll be able to take care of things like you want.
Great post. I like that you share the good and the bad.
We won’t be stimulating the economy with ours. We plan on putting it directly into savings and using it to grow our net worth.
Geez…this is exactly why I’m wary of getting married any time soon….as a guy, I feel I have a duty to take care of my future wife and provide for a stable financial environment rather than dragging her into a financial struggle with me. That’s sort of a razor thin savings edge you have there…
Ours was perfectly timed to coincide with our need for a new computer, though we have leftover money since we bought used.
@Jaynee — I think that’s great! Did you already pay off all your debt? May be you can wipe out all your debt in one fell swoop.
@Gracie — Excellent!
@Jackie — That’s great and thank you! Are you comfortable having your money in ETrade? I heard they were in trouble not too long ago.
@Vered — Thank you. Is your Money Market Fund paying you a competitive rate? Have you considered online savings that pay about 3%
@Lee — I think that’s great. Every little bit helps.
@B Smith — Good idea. It’s better to stimulate our finances.
@Money Blue Book — I don’t know about razor thin savings. If you read carefully, I max out my 401k and 2 IRAs — that’s $25,500 per year in retirement savings. It’s our taxable account that’s taking a hit.
@Mrs. Micah — How do you like your new PC?
you mentioned that you contributed 4000.00 in dec 2007 to your ira acct, why do people just make yearly contributions to their IRA and ROTH IRA instead of monthly or quarterly contributions. i have read, recently, on different blogs where people are saying they all just made 4000.00 contributions, am i missing out because i make monthly contributions instead of yearly??? am i wrong???
@Jones — There’s absolutely nothing wrong with monthly contribution. In fact, I wish I can do it that way. However, I haven’t set up automatic monthly contribution at this point. As such, I usually ended up scrambling to come up with big lump sum toward the end of the year.
Hi, I just found your blog/site . . . you have some great info here!
My stimulus check is going STRAIGHT to my savings account. While I have done a very good job investing monthly in my Roth IRA, 401K, TIAACREFF and 403B for the past 8 years. . . I haven’t got an “Emergency Fund” set up. My goal is have $5000 in it, and I currently have just under $2000 saved, without jeopardizing my other investments. Its tough, but I’m gonna make it!
A great way of using that money. I am going to use mine to pay off my cc or invest in a mlp i have enough for both but i rather just do one.
Pinyo! Good to hear from you! It seems like you’ve been blogging a lot about finances and little about YOU lately, and it’s refreshing to read about your life again. I started reading this blog because you make such a great autobiographer, in a sense.
This was a great post to read.
*I* plan to put my stimulus check into my motorcycle fund because I am technically DEBT-FREEEEE!!!!! (I have made the money, the checks are coming soon, and all will FINALLY be paid off next week!). I am so excited to be saving for something I’ve wanted for years, and to someday soon (June?) buy it with cash
I will start saving for my early retirement this summer, after I’ve acquired a motorcycle
My stimulus check will go straight to debt repayment. I’ll have my highest rate credit card paid off in June this way. I’ll still have $8k in cc debt but all of that is sitting at zero interest until 2009. Basically, it will be one card down - two more to go.
Tracking my finances has really helped focus me one getting this all paid off ASAP.
We’re going to use all of our stimulus check to pay down debt. Over the past two years, we had our first daughter (second child) as we bought/built our first house. Then we had our second daughter (third child). We did all of this on one income, so we’re running pretty lean.
The stimulus check as well as any more windfalls, bonuses, and raises will be going directly to the mortgage. Debt puts too many restrictions on how you live your life.
Definitely keep it in my savings account!! I like to hoard my cash. And thankfully, I don’t have any credit card debt. But I do still have to pay off my student loan
Well it’s the last day that they said my rebate would arrive and it’s not in my account. It’s not even pending. If it wasn’t going to show up, fine, but don’t make a huge deal about them going out EARLY as well. Why do they lie like that? Oh yeah, it’s an election year. Guess who won’t be getting my vote? And for more reasons then a stupid “stimulus” that just comes out of our own pockets anyway… mine will be going right back into the account that I had to steal the money to pay my taxes from. And what is that account for? Paying property taxes.
Lots of great info and ideas mentioned here. I work with an online payment provider, eBillme, and they are seeking tax rebate confessions as part of their shopping confessions contest. The company will be giving out $1,000 and $500 to the best video or written confession revealing how you plan to use or maybe not use your tax rebate. Check out the contest website for all the details - www.shopandconfess.com.
Great post. Funny how life sneaks up on you and all of a sudden have an extra mouth to feed with one less paycheck. This is the biggest lesson all newlywed couples should take into account– live off of one paycheck! My husband and I lived off of mine for nearly a decade and used only my income to buy a house and cars. When our kids came along 4 years ago, it was easy for me to quit my job. I am going to poke around your site to see how you make money blogging! Please share. . .
Laura - Thank you. That’s good to hear. I think you have an excellent goal to set up your emergency fund.
@Roman - Sounds good about paying off CC. What is MLP?
@Shanti - Really, I didn’t realize I have a swing in writing style — I’ll try to write more from my perspective
Ah, I didn’t know you’re a biker — congratulation.
@Adfecto - Good plan. It’s always a big psychological impact when you can finish off an entire CC.
@Aaron - To pay off mortgage? This is where our philosophies differ. I think paying the minimum on mortgage gives you greater flexibility.
But it’s always good to hear that you can do something toward your goal.
@Bunny - Not investing?
@Jeff - I’ll come. Some of my dad’s coworker already got their checks. I haven’t seen mine either.
@Alicia - Thank you for sharing information about the giveaway.
@Ideal - I am glad I am actually holding up better than anticipated.
As for making money blogging, just some pay per click ads like Google AdSense, a couple of CPM ads (pay by impressions), and several referral/affiliate programs.
Pinyo, it’s interesting how our decisions can differ and yet still be right for each of us. For some people, paying the minimum can be a great deal. We’ve had abnormally low rates for years now…index fund stock investments will probably pay off over the long run.
However, the one thing that is guaranteed is that the mortgage payment will still be on your back limiting the number of choices you can make in the present. For example, a longer commute to a higher paying job or taking a higher paying job simply because the payments must be met.
Re: greater flexibility
It’s a trade off between greater flexibility now (no debts, but smaller nest egg) and even greater flexibility in the future (still no debts, but more interest paid so more could be invested).
@Aaron - Agreed. The reason why I think non prepaying offers you greater flexibility is the fact that you could lose your house if you can’t pay your mortgage even if you prepaid for the past 10 years. Banks do not give us extra credit for prepaying.