So, I should be receiving, like most American’s a $600 “Economic Stimulus” check in my bank account shortly.
This poses the question that many are asking:
What the heck should I do with my stimulus check?
Hey, that rhymed.
The main divisions for most people are going to be:
1. Spend it (on what?)
2. Save it (invest it or pay down debt)
3. Give it away (to whom?)
In my case I have an option for each of the above. I could easily spend the check. I could put it towards getting a new mattress, or some pots and pans I’ve been looking at, or do something totally non-practical like get the new ASUS that’s coming out mid-may (although work wise, it could be practical!)
I could also save the check. I could put it in my Emigrant Direct savings account, or invest it in stocks in my Sharebuilder account.
But, since I owe my mother a crapload of money, my check is likely going to pay her back. One (smart) reader once pointed out that I have my whole life to invest, but my mother does not. So, any “investing” I do should be paying down the $140K or so that I owe her. I like this option, and unless she refuses it or some super fantastic too good to pass up alternative pops up, it’s likely what I’ll be doing with the extra $600.
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Take her out for a fantastic breakfast on Mother’s Day and give her the rest!
“Serenity” on your Twitter jumped out at me and I thought “eight times? Really?” Then I realized I had just spent the night before watching a good chunk of the series for the 10th time. =)
Spend mothers day with her and give her the rest as Shel said. If she refuses, I strongly recommend you to BUY a mattress. It will do wonders for your health.
I agree. Spend the money on her for Mother’s Day and then give her the rest.
I’m the (smart) reader you referred to in your posting. My suggestion is give your mom the entire $600. She’ll appreciate that much more than an expensive meal – instead, why don’t you offer to make her something special (brunch or dinner) at home to celebrate the day.
Part of my reasoning for your paying your mother back is that my mom recently passed away. As we were going through her papers we found a letter from my brother to my parents dated 12 years ago. My parents had loaned him $$ for a down payment on a new house in the SF Bay Area.
My dad was happy to see the house appreciating in value — it went from $198,000 (purchase price) to a value of almost $750,000 at the height of the market. (With the market’s adjustment, it is now worth approximately $600,000.) Since my brother’s own money was not involved with the purchase, the “investment” of my parents money (the loan) has a huge return for which my brother will directly benefit.
Over the years my brother and his wife’s income has grown…. they could have repaid my parents, but they chose not to. In addition, they took out home equity loans and refinanced (taking cash out, of course) and bought new cars and a sail boat.
My Dad died knowing my brother had the ability to pay him back, but didn’t.
Mom wrote on the back of the loan letter that the amount of the loan is to be deducted from his share of the estate (inheritence).
My parents could have used the $$ during these last few years of their life… even if they hadn’t spent the $$, they could have earned interest (my parents had purchased CDs that were providing them with a 5.5% return, they were living off the interest from the CDs, never touching the principle).
So remember, the $$ your mom trusted you to invest during your day trading (gambling) days was her retirement $$ and the loss of the $$ now (because it is not earning interest for her) has a huge impact on her quality of life later. And even if she says everything will be okay and that she has enough, you don’t know what the future will hold, she could live many years and be diagnosed with an aging disease (my mom had Parkinson’s) that requires specialized nursing care — the money you pay back your mom could mean the difference between a nice facility and a GREAT facility.
It will be interesting to learn if you, since you say you are facing an IRS debt, qualify for a stimulus check or if it will go toward what you owe. I can’t rationalize all your chat about purchasing a mattress when you have a wrecking ball swinging around your head. Have you had your day of reckoning yet? The IRS is real serious about getting their due, and kind of pesky when you don’t pay up.
@ the Wolf – Totally understandable, my “day of reckoning” is tomorrow. I’m meeting in person with the IRS agent handling my case. He’s already told me what to expect, and while I’m a little nervous, the biggest part of the meeting will be setting up a payment plan that is appropriate that will allow my business to continue, yet still payoff the aprox 22K that is owed in a timely fashion. I’ll have a full report tomorrow or the next day.
Please tell us that you put any extra money toward the purchase of services from a tax attorney, CPA or other trusted advisor to accompany you to mitigate. I better cut this off before I reveal my occupation. DO NOT go alone. This type of tax debt will follow you like a bad stink.
Pay down debt or build up your emergency fund.
I’m actually writing about this tomorrow…
First, I don’t think you should qualify for the check, nor should anyone with a IRS tax debt. However, that is not likely the way the stimulus checks were set up. You know the right answer..pay your TAX debt or your mother! My first inclination was for you to immediatley pay the IRS, but I do like the mother’s day plan others have dveloped. I think it would be good for both of you!
I think you should pay your mom. You’d feel better about that than buying something with it.
From what I understand, if you owe money to the IRS you will not get a check…
DK I don’t think you’re going to receive a stimulus check. You have to pay taxes to get one, and you still owe the IRS more money. I really wouldn’t count on this happening but if it does come, give it to your mom.
I actually think I will, here’s why:
1. My business owes taxes. Not me personally (at least not yet)
2. All my back tax issues have still yet to be formally processed (was told this just today by IRS man)
So, I’m guessing (but not 100% sure) that I will. I guess we’ll just have to wait and see.
Goody! You get some spending money, while BS Corp gets $29 billion.
And if you are really good, Uncle John has two shiney new dimes for you! Ok, so it is really 18 cents.But you have to buy a gallon of gas to see any of it.
Hey DK.
I know you owe debt, but there’s a great book about how to start a company with $500.
In any case, I’d ignore the check except for putting about 10% of it in my savings or emergency fund and using the rest to pay off debt.
Good luck buddy.
Hey DK,
I know how you feel about paying back debt- it can be rough! Do you agree with the whole stimulus package deal? I think is another smoke and mirrors ploy, but we’ll see. I am probably going to invest my check into my Roth IRA.
Keep going. Reading your story is encouraging to all!
Which stores are offering extra money for our rebate check $$?
I really need a new computer