Whose economy are you stimulating?

Four ways to stimulate your own economy.

By Tami Dixon

[April 27, 2008]

What do you plan to do with your tax rebate check from the U.S. government? Whose economy do you plan to stimulate-corporate America's or your own?

Call me cynical, but I think some politicians were hoping we would use our windfall to buy, buy, buy. With $1,200, you could take a vacation to Las Vegas. With $600, you could purchase an iPhone, with change left over.

There's nothing wrong with a little indulging, but you might be better off to use your check to stimulate your own finances. Here are four options to consider:

  1. Pay down the principal on high-priced credit cards. If you have a high-interest credit card, pay it off or pay a chunk toward the principal to reduce the overall interest you will have to pay.

    Did you know that a $1,200 balance on a credit card charging 19 percent annual percentage rate would take you seven years-and $1,100 in interest!-to pay off when making minimum monthly payments. That's crazy!

    Paying off that card with your stimulus check will save you $1,100 in finance charges-and retire your $1,200 debt. For additional savings, transfer the remaining balance to an STCU Visa® credit card with low, fixed rates.

  2. Stop thinking that someday you'll start saving for retirement. Start today. Sometimes the biggest hurdle is just getting started. Jumpstart your retirement plan by using some or all of your refund to open a federally insured STCU IRA account, a safe and secure way to grow your nest egg. Keep the momentum going and set up automatic monthly transfers to make savings an ongoing habit.
  3. Set up children's savings plans. Getting extra money for the kiddos? Start them on the path to responsible money management by setting up their own savings account. STCU's First5 Savings Account is a great deal. It pays an astonishing 6.14% APY on the first $500 deposited.*

    The First5 is available to any member at any STCU branch location or calling (509) 326-1954 or (208) 619-4000.

  4. Invest in yourself. Why not use some of your newfound wealth to improve your professional skills? Take some classes to help move you to the next level at work or to transfer to a different position or industry. Better yet, stop talking about how much fun it would be to salsa dance or to play the saxophone. Give it a try! Indulging in a stress-reducing hobby can have an enormous long-term positive impact on your life.
*APY=annual percentage yield. Rate applies to first $500 saved. Money above that level earns regular savings rate. Rates subject to change. Accounts can be opened for adults, too. One First5 per member. Ask us for details.

Tami Dixon is STCU's senior research analyst.

STCU