Minding My Own Business

On May 9th, 2008 my stimulus check arrived, right on time, just as forecast.  There was no fan fare, there was no congratulations.  Just the quiet whir of my computer’s fan.  There it was, staring at me in my money market account, $1800 that wasn’t there the morning before.  Should I tell the money spender?  Communication is one of our strong suits and a key to our personal success as a couple, so I have no choice in the matter, I have to tell her.  She’s happy we’ve received it and has allowed me to save it for now. 

The Government is obviously looking for us to put the money back into circulation for the economy’s sake, and for theirs as well (almost every transaction will be taxed).  I love it…go out and do your patriotic duty to the United States and spend money.  I guess that explains why so many Americans have so little savings.  Not only has our society become one of instant gratification, but now our Government is encouraging the same thing wrapped in the cloth of Economic Patriotism.  Good or bad, you decide, but my parents didn’t raise me that way.  My money will be spent when the time is right for me.  But it will be carefully planned and on something that will help me create enduring wealth.

I’m sure there will be some folks who will use the check just to make ends meet.  For them, I hope it helps make their life a bit easier.  However, for most of the rest, I have to believe that this payment will merely be money burning a hole in their pocket.  It’ll be used for that flat screen TV they’ve wanted or maybe a down payment on a new car (and 5 years of debt payments).  I’m not criticizing those choices, but this is a blog about Financial Success, and I don’t see them as measured steps toward that goal.

So what would a person seeking financial success do with the money?  Here are the best ideas I can think of:

1. Pay down debt and make the decision to not incur more unless it’s necessary or it’s good debt.

2. Save it for a rainy day.  An emergency fund of cash is a great cushion to have, especially in volatile economic times such as we appear to be in right now.  Typical recommendations range from three to six months of cash reserves.

3. Invest it.  Put it towards your annual IRA contribution or add it to your taxable investment strategy.

4. Spend it…on something that will yield a return.  That sounds like investing, I know.  But I was thinking more along the lines of an improvement project that could add or restore value to your home.

Those are the best choices I can think of for someone who is interested in Minding Their Own Business.  For me, I’ll be investing it.  I’ve already added it to my real estate down payment savings.  Hopefully I’ll be spending it by the Summer.

- Jeff

Learn about personal finance and be successful minding your own business.

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