Federal Reserve & Interest Rates

The economic stimulus money is going to start going out to consumers today.  This is a bit earlier than planned, as it was supposed to begin in May.  Direct deposits will be issued starting today, and all of those receiving tax rebates by mail will receive them after May 9, 2008.  This is a week earlier than originally planned.

The original intent of the economic stimulus package was to boost consumer spending, which would ultimately give the economy a boost.  After all of the inflation in commodities like food and gasoline, this package could end up covering additional expenses, rather than offering extra savings.  The price of oil is continuing to rise steadily, and $4 per gallon looks to be a strong possibility this summer.

The economic stimulus package will vary from household to household.  Single individuals who earn at least $3,000 last year should receive $600.  Married couples will be given $1,200.  There will also be $300 alloted to dependent children. Only those who filed a 2007 tax return as required are eligible.  Individuals who don’t have to file are also eligible.  The IRS has set July 11th as the deadline for all rebates to be received by consumers.  Those who filed a late return may have to wait longer.  Individuals earning more than $75,000 and married couples earning over $150,000 will no be receiving any of the stimulus money.

Additional money will temporarily help most individuals who are having minor financial problems while budgeting against inflation.  It can also provide some relief for unemployed individuals.  Most consumers will probably be using the money to help pay debts or save the money for future bills.

Bush admits to economic slow down, but will not call our economic state a recession.  Economists disagree with that assessment.   We are in a recession.  Some might call it tough times, but, I am pretty sure this is a recession.

Use the money to your advantage.  If you have debt, put the money towards that.  If you are struggling with rent, grocery bills, or gas, use the money for that.  If your bills are caught up and you aren’t having a hard time with inflation, put the money in an interest bearing account and use it when inflation starts to hit you.  Sooner or later, the way things are going, you will have to use the money.  Spend it wisely.