Spend or Save: Where's Your Stimulus Check Going?

Whether it's now or later, MMI offers tips on how to get the most
out of your windfall
HOUSTON--(Business Wire)--
Approximately $150 billion dollars will be distributed to American
consumers in the coming weeks, as part of a plan to jump start the
economy. Many retailers are gleefully anticipating a bump in consumer
spending, but will consumers save or spend?

According to the National Retail Federation (NRF), consumers are
expected to spend an estimated $43 billion of the stimulus package
dollars on retail commodities, and only $20 billion will be saved.
However, a recent survey by H&R Block found that nearly half of
Americans - 45 percent - plan to pay bills and only about 16 percent
of Americans will splurge on such things as electronics, jewelry and
vacations.

If your stimulus plan includes a bit of splurging, consider a
little advice from the experts at Money Management International:

1. Determine the treat. Make sure your splurge is worth every
penny. Start by making a wish list and prioritize. For each
item, ask yourself if it is something you will use, enjoy, or
remember this time next year.

2. Don't leave any goodies on the table. Retailers are offering
great incentives to lure you into spending your rebate in
their store. Do a little research and make sure you're getting
the most bang for your buck.

3. Stick to the rebate. Don't allow this spurge to cost you later.
If your stimulus amount is not enough to cover the cost of
your splurge, consider having a garage sale, collecting spare
change, or working overtime to come up with the extra cash.

4. Spend now for big savings later. Consider using your stimulus
check to upgrade your appliances to energy-efficient models
that can lower your electric, gas, and water bills and save
you money in the long run.

On the other hand, if the looming recession has already taken a
bite out of your pocketbook, and you plan to put the money where it
will give you the most long-term benefits, consider the following
suggestions:

1. Pay down debt. Accelerating your payments is an easy financial
decision. A $2,000 credit card balance with an 18 percent
interest rate could take nearly 12 years to repay when making
only the minimum payment.

2. Save for emergencies. Americans are currently saving less than
one percent of their disposable income. That means that any
unplanned expense could turn into a financial emergency.
Placing the money in savings is an especially wise plan in
times when job security is uncertain.

3. Prepare for the holidays. Too many people get in over their
heads during the holidays and being in debt is no way to begin
a new year. By saving your boon for holiday purchases, you can
take advantage of lower prices and avoid post-holiday debt.

4. Grow your money. The eighth wonder of the world is compound
interest. Depositing $1,200 into a savings vehicle that earns
8 percent interest can really add up. After 10 years, your
$1,200 will have doubled to more than $2,500.

Whatever you decide, remember to take the time to revisit your
overall financial plan. Having a solid roadmap will take the guesswork
out of future financial decisions.

"However you decide to use your stimulus check, they key is to
make the smartest decision for your unique situation," said Cate
Williams, vice president of financial literacy for Money Management
International. "Whether it's spending now or saving for later, you
have to keep the big picture in mind in order to have the biggest
benefit."

About Money Management International

Money Management International (MMI) is a nonprofit, full-service
credit-counseling agency, providing confidential financial
guidance, financial education, counseling and debt management
assistance to consumers since 1958. MMI helps consumers trim their
expenses, develop a spending plan and repay debts. Counseling is
available by appointment in branch offices and 24/7 by telephone and
Internet. Services are available in English or Spanish. To learn more,
call 800-762-2271 or visit www.moneymanagement.org.

For MMI
Pierpont Communications
Jordan Gibennus, 713-627-2223 ext. 1153
jgibennus@piercom.com

Copyright Business Wire 2008