15 Things To Do With Your Economic Stimulus Check

The government Stimulus checks started going out on April 28th. If you are expecting one you should start looking for it in May (here’s a post listing the dates).

So what are you going to do with the extra money? Here are a list of ideas for using your stimulus check:

  • Pay off credit cards – If you have any credit card debt the stimulus check will be a great way knock some of that out! Paying off the debt gives you an instant return in savings of whatever you would have paid in interest fees. Psychologically, you will help in getting the debt monkey off your back.
  • Contribute to a Roth IRA – You can take your money and put it into your Roth IRA. For 2008 the contribution limit is $5000.
  • Start an emergency fund – If you don’t already have some sort of emergency fund (three to six months expenses seems to be the conventional wisdom) then your stimulus check is a good way to start one. Even if you have one you can use the money to increase your fund. A great place to start one is with ING Direct (you can even get a $25 bonus by opening your account with $250).
  • Contribute to a 529 college savings plan – You can use the money to help save for your kid’s education by putting the money in a 529 plan. Not only do you help save for college but you might get a tax break as well depending on your home state’s plan.
  • Pre-pay your mortgage – Take the money and make additional payments to your mortgage. By making additional payments you will own your home faster and pay less in interest. Just make sure the payments go towards the loan principle and not next month’s payment (also check that your lender will accept pre-payments without fees or penalties).
  • Go on vacation – You may have been planning to do this anyway so here is a good way to fund the vacation. Go and do something that will be a great experience for the family that you will all remember.
  • Improve the house – If there’s something you’ve needed to improve on your home, such as a furnace, you can use your stimulus check to pay for it (or at least help). Other options could be new paint job, carpet, furniture, appliances, etc…
  • Car maintenance – Have you been putting off a car repair? Need new brakes? New tires? Your stimulus money can fund it. If your car is about to go kaput your stimulus check could help pay for a new car (or a good new used car).
  • Learn to invest – Do some research and take the money and start investing. Companies such as Sharebuilder and Zecco offer low-fee investing. You have to do your homework with this option but it might be just enough money to start investing but not so much that you will be crazy worrying if you lose it. If you invest through Sharebuilder you can buy partial shares of Berkshire Hathaway B class shares. I hear that Warren Buffett is pretty good at investing.
  • Pay off student loans – If you have high interest student loans then your stimulus check can be a great way to help pay your student loans off. Just like with credit cards paying off your high interest student loans give you the instant return in savings of what you would have paid in interest.
  • Have a nice evening out – Take your spouse out to a really great meal. Get babysitting and go to that great restaurant you wanted to try. Go see that new show that everyone’s talking about. Make an experience you will always remember.
  • Get physically fit – The stimulus check should be enough to pay for a year’s gym membership (or more than a year). Use the stimulus check as a catalyst to get in shape and make your life healthier. Not sure about a gym? Find a class such as yoga or martial arts to join. Not into that? Buy a new bike and go riding. Or get yourself some good running sneakers and running attire. Join your local running club and enter a few small races. You never know, you may one day run a marathon.
  • Go to school – Use your stimulus check to enroll in a college course or two. This can be toward a degree or just continuing education. Hey, you can take a personal finance course. Maybe learn a second language?
  • Do nothing – This is the easiest of them all. Put the money in your savings account and forget about it. You don’t have to spend it or find any particular purpose for it. It doesn’t have to burn a hole in your pocket. One day you might find a good use for it but for now it adds to your savings.

Personally, we’re closer to the Do Nothing suggestion. Our stimulus check will come via direct deposit right into our ING account. We have no specific plans for the money so it will be added into our savings. Our check may pay parts of many of the suggestions or for none of them. Either way it will earn interest until it finds a home somewhere else.

Do you have any other ideas for using the economic stimulus check?

photo by Argenberg

Best And Worst College 529 Plans From Morningstar

Morningstar has released their picks for the top five and worst five 529 college-savings plans. To make their choices, Morningstar “focused on diversification, fees, flexibility, and the underlying funds.”Here are the top five:

– Illinois Bright Start College Savings Program
– Maryland College Investment Plan
– Virginia Education Savings Trust
-Virginia CollegeAmerica 529 Savings Plan (broker sold)
– Colorado Scholars Choice Savings Program (broker sold)

The worst five:

– Ohio Putnam CollegeAdvantage (broker sold)
– Mississippi Affordable College Savings Program
– Mississippi Affordable College Savings Advisor Program (broker sold)
– New York 529 College Savings Program
– Nebraska AIM College Savings Plan (broker sold)

I’m a little concerned that New York’s plan is considered one of the worst. Not only do I have two funds under the plan (one for each child) I also said recently that it’s a good plan. The main criticism from Morningstar is that the plan doesn’t have any exposure to international funds so it’s been missing out on international gains and it’s not hedged against US economy downturns. Other wise Morningstar says it’s moderately priced and they like that it’s made up of Vanguard index funds.

Many people, like myself, contribute to their own state’s plans since it’s likely they get a tax break. But depending on the plan and state you may be better off contributing to another state’s plan.

The Wall Street Journal suggests the following when considering a 529 plan:

“• When shopping for a 529 plan, you should consider costs, investment options and asset-allocation strategies.

Weigh any tax advantages of investing in an in-state plan against the plan’s total costs.

Look for annual asset-based fees of less than 1% for direct-sold plans and less than about 1.3% for broker-sold plans.

Compare state plans at www.savingforcollege.com, www.collegesavings.org or www.morningstar.com.”Hopefully Morningstar’s review will prompt the New York 529 plan to consider some international exposure otherwise I may have to look into some of the better plans.

Do you contribute to a 529 college-savings plan?

I Switched To Sprint SERO And Saved Some Money

A little over a week ago I signed my wife and I up each for the Sprint SERO cell phone plan.
We were already on Verizon Wireless. So why switch? First let me explain our Verizon experience:We had been looking into upgrading our phones since they were over two years old and we were due a credit for a new phone as part of Verizon’s plan. We even went so far as to visit a few Verizon stores but I felt like I was getting the run-around at each. See I was supposed to get $100 towards a new phone. At each location I went to they told me only $50 even though when I called Verizon they confirmed the $100. Two of three of the stores pretended to not know about a buy-one-get-one-free offer that was being advertised. This didn’t sit well with me. The next concern was cost. We had a family plan for 700 minutes that could be used between our two lines. This cost us $79.98 without any taxes or extra charges. Any texting was extra. Like 15 cents a text extra. We try to keep our texting below $5 which is what we would pay for their text plan (I don’t generally text much but my wife sometimes does). Our bill would end up between $90-$100 a month. Oh, did I mention that we got terrible reception in our home? We’ve traveled all over and Verizon has had great signals but our luck has it that our service stinks in our living room. So, we were willing to stay with Verizon but our minds were open to finding another service.

Fortunately we never found a Verizon phone deal to upgrade to.

I had remembered reading an article from Cash Money Life about how he transferred his cell plan to someone else and ordered the Sprint SERO service. Since we were already off our contract I figured I’d check the plan out. I went back to the post and saw that he got his info from fivecentnickel, checked out his site and checked out the Sprint SERO site. And isn’t fate funny? The day after I was looking at the SERO site Cash Money Life published 15 Ways to Save on Your Cell Bill. If that’s not synchronicity for you… Suffice it to say I signed us up for two plans.

So what is Sprint SERO? It’s the Sprint Employee Referral Offer. Here’s the $30 plan:

– 500 anytime minutes (they have bigger minute plans that cost more)
– Unlimited nights and weekends starting at 7PM
– Domestic long distance
– Unlimited mobile to mobile
Unlimited Web/Data access
– Unlimited picture mail (with compatible devices)

Currently there’s unlimited texting until 5/31/08. I was told that they tend to keep extending the free texts. Hopefully this is true.

What I really love about this plan is the unlimited data/web access. I can now access my Gmail account on my phone as well as many other web functions (Gmail is really great for on phones BTW). From what I recall from Verizon their data plan is much more expensive!

But wait. How do I sign up? I don’t know any Sprint employees! If you use the email savings@sprintemi.com at the Sprint SERO site you should be fine. This worked for both Cash Money Life and fivecentnickel when they ordered their phones. Check out fivecentnickel’s article for details.

Me, I’m still a little paranoid about getting stuff online (there’s a bit of irony in there somewhere, no?) so I entered the email address then checked the site for what I wanted. I settled on the Motorola Q9c Smartphone for me and the LG Rumor for my wife. I was a little skeptical about the email address working based on info I read so I picked an employee email from the Sprint Media page (check out this forum on FatWallet.com for SERO info). Next I called their SERO ordering number. I gave the salesperson the email and it went through with no problems. He asked if it was ok for them to check my credit. This is a requirement to make sure you can afford the phones and the plan.

Here’s where it paid to speak to a human: online there is a spot to enter any promotions codes you have (you might be able to find some online). On Nickel’s site he mentions that he used the code URANG to get a $25 credit on the first two bills. This no longer worked on the site but I mentioned it to the Sprint rep anyway. He was able to still apply the credits to each line so I should be getting a total of $100 back in credits. It always pays to ask! Also, if you order by phone make sure you don’t pay for shipping. They wanted to charge me for this but I mentioned that shipping was free when ordered online and they agreed not to charge me (it also pays to check out the deal online first).

So far we love are phones and couldn’t be happier with the text and data plans!

Pros:

– $30/month for 500 minutes. That’s $60 for the both of us. I went in for the insurance plan on my phone which is $7 extra a month. The phone’s a little more expensive than my wife’s and we have two kids. Still, this is cheaper than our last plan and has more minutes ($67 versus $79).

– Unlimited data/web and texts. I’m loving having the web on my phone!

– We have a great signal at home now and have had no problems so far with dropped calls (make sure you check your area for service on the site).

Cons:

Sprint customer service is horrible! You probably don’t have even a 50/50 shot at getting someone who knows what they are talking about! Seriously. When I called to activate the phones I mentioned to the rep that we would be porting our old numbers over (you have to order the phone with a new number then port over your old number when you activate the phone if you want to keep your old number). The rep didn’t know what to do and at one point told me I had to call Verizon and tell them to release the number. Had I actually done that I might have lost the number! He finally put me on with the porting dept. and they were able to get it taken care of with no problem. Why their reps don’t know what the process is I don’t know (my guess is their customer service is outsourced to another part of the world). Next, my wife’s phone wasn’t working. I spent a lot of time over several days getting them to fix the problem. I finally found a woman who was kind enough to take a real interest in my problem and she put a ticket in to tech support. Finally my wife’s phone was fixed but it took a LOT of time and patience! Note: If you plan on using your old cell phone number make sure you don’t cancel your plan until after you’ve ported you’re number to the new plan. Canceling it before can cause you to lose the number.

– I got the first bill already and it’s wrong. They didn’t include the credits. More time with customer service not knowing what to do. Eventually I was told that the credits were there it just didn’t update. We’ll see soon.

– It’s not open to existing customers. We switched from Verizon so it was no problem but if you already have Sprint you may not qualify.

All said we are very happy with the phones and the phone service so far. And we’re saving money and getting more services from our phones. If you’re looking into a new phone plan then you should consider the Sprint SERO plan. Check out fivecentnickel’s experience as well as the FatWallet forums and decide for yourself if it’s worth it.

Let me know what you think if you sign up or if you already have the plan!

Four Ways I Upgraded Out Of My Raises

That one day a year you have been dreading/anticipating at work finally comes.

Your boss calls you into their office and shows you a piece of paper that tells you your new salary. Yay, it’s more! Maybe it’s just a raise or maybe it’s a promotion, either way the new salary figure looks better than what you had. “Now I can get ahead of my bills and save a bit” you tell yourself. A few months pass and you look at your bank account. “Huh? It didn’t grow? What happened? I thought I was making more” you ask yourself.I’ve been there. It would happen to me a lot. I would make more but have nothing to show for it.

Know why? Upgrades.

I discovered that I would upgrade little things in my life that would eat away at any raises I got. Of course I didn’t realize this until much later.

Here are some of the bigger culprits:

Coffee – There was a time I didn’t drink coffee. Didn’t like it. Slowly I came to love the brown nectar. Instead of making it at home I would simply go to Dunkin Donuts. As well as regular coffee I would get all sorts of specialty drinks there as well like iced coffee, iced lattes – you name it. Later as I had more money I upgraded to Starbucks. Love their frappaccinos! But Starbucks is more expensive than Dunkin Donuts. Nowadays I still go to Starbucks as a treat but I’ll usually make my coffee at home or at work.

Clothes – There was a time I would shop at Old Navy. I’d get a pair of khaki’s or a polo for work or maybe some personal gear. Maybe I would get stuff on sale at the Gap. As I made more I’d shop at the Gap and get stuff on sale at Banana Republic. My income grew and I would shop at Banana Republic or Macy’s or Bloomingdale’s, not always looking for the stuff on sale. Now I try to stay frugal and shop at discount places like Century 21 or maybe Target. I also don’t buy anything unless I need to (like if a pair of pants blew out a hole that couldn’t be fixed).

Food – I remember a time where if I went out and ate sushi I would be broke. I might have been able to budget for it once a month but that would be it for going out to a restaurant to eat. As I made more money I would find myself eating out more and more. Sushi night didn’t hurt as bad and became more frequent (as well as other foods). I’ve since cut back a lot. We go out to eat from time to time but the majority of our meals are home based (except my work lunches but even those I’ve been getting cheap).

Gadgets/Doodads/CD’s - I used to buy so much junk that would clutter my apartment! I don’t think I have much left to show for it though. I do have hundreds of CD’s (no, not the investment type). Those aren’t a total waste but many I bought just to get something new or try a new artist. A lot of them don’t get listened to any more (and not just because of my iPod either). And you know how I’d pay for a lot of the stuff? Credit cards. So in the end I probably paid more than what the price stated. I’ve cut back on my impulses a lot and when I don’t I have my wife to answer to (luv u hon). As for music, I’ll still buy CD’s but very rarely and only from artists I’m really looking forward to (if only more artists would release their music like Radiohead for free).

So you see, I think a lot of the time when we get a raise instead of upgrading our finances we tend to upgrade our stuff or our lifestyle. As a result we upgrade ourselves out of our raise.

Have you upgraded yourself out of a raise?

7 Ways to Get Rich Quick

Large Denomination Bill

These are trying times for our economy.  The money in my 401(k) is going nowhere, my high-yield savings isn’t yielding very high, Bill Gates isn’t the richest in the world, the economy basically evaporated…

What’s a person to do?!?

I propose seven ways for you to get rich quick!

Stock speculation

We all know money can be made on the stock market.  You just have to invest in the right companies.   Find lots of small companies that look good.  Big companies weren’t always big – they started small.  Find an emerging industry and invest there.   Surely professional companies will grow and as they do so will your stock price.  Check this out – as recent as 2003 stocks returned over 28%!!

Buy property and flip it

Rates have dropped.   Housing prices have dropped.  Now is the time to start reaping the rewards of of the housing bubble burst!  Do you own a home now?   Leverage that home with a home equity loan and buy up what properties you can.  Housing prices will go up again and you will see the green!

Insider trading

We all know someone on Wall Street in the stock market today, don’t we?  Think they keep everything secret?  Why do you think they are rich?   Next time you run into one of your Wall Street buds hit him up for some tips.  These guys work with stocks all day so they know where they are moving.   Maybe they can tell you the best trades in penny stocks (those always seem to go up, right?).  Use those tips and buy what you can!

GamblingUsing cash instead of credit cards

Ever played blackjack? Craps?   These games have some of the best odds in the casino!   You can learn all sorts of different playing strategies online to help you win.   Heck, there’s even a movie about some MIT students who beat the casinos with blackjack.  Go get to the casinos before everyone sees the movie and has the same idea!

Blog

Anyone can blog.   Really.   Look at me, I’m no Dostoevsky and you’re reading this.   There are so many ways you can make money with a blog.   Just throw some ads on your site, write some posts, and voila!  Instant cash!  Make sure to link back to me when you start up!

Tax return

List anything you can as a deduction.  We can all find some way to justify an expense.  The more you put the better.   The money you donated to the orphanage?  That’s like having a whole bunch of dependents to declare!   Get your tax return to the point where the government is giving you back a huge return.   When the money comes in you can try the other six tips here.  Oh, don’t have your accountant do it.  Do it yourself.  You know what your deductions are.

Win the lottery

Someone has to win.  Yes the odds are bad.  But every ticket you get improves those odds.  What if you took your tax refund or stimulus check and bought lottery tickets?  There’s bound to be a winner in there.

What’s that?………Hold on one sec……uh-huh…ok.

My lawyer and accountant just barged in on me.  They’re telling me I might have gotten a few facts wrong.

Umm, lets see…stock speculation’s not a great idea.  Speculation without real research is actually closer to gambling than investing.

But I like gambling!

Cross off gambling too.  Something about if it were so easy to do well with it then everyone would do it.  And that casinos have the best odds in the long run.  And those MIT kids were an exception that didn’t last.

Remember those 2003 returns?   Here are the returns for the three years before 2003: 2000 -9.03%, 2001 -11.85%, 2002 -21.98%.

Ohh.

Past returns do not guarantee future returns.   And lots of small companies fail or never make the successful leap to become a large corporation.

Related: Online Brokers with Inexpensive Trades.

On the same note, there’s no telling where the bottom is in the housing market.  Many thought it would never drop and here we are.  Buying now could be ok if you’re looking to buy your own house but otherwise you’re back to speculating.  Leveraging what you own could be a sure-fire way to end up foreclosed.

My lawyer mentioned that insider trading is illegal.

Ouch.   Ok, don’t do that!  My accountant chimed in saying that just because someone trades a stock it doesn’t mean they research the fundamentals of any of the companies they trade.   That’s good to know.   So watch out for any stock tips too.   Do your own research!

I just checked my advertiser accounts for this blog.   There’s a few cents in there but nothing to live off of.  I might have jumped the gun saying that a blog was instant cash.  You can make money with a blog but I it takes persistence and hard work and even then it could fail.

Nope, not a way to get rich quick.

That looks funny!

My accountant and lawyer are jumping up and down pointing to Tax Return.  Wha?   oh.

They are highly against putting anything fraudulent on your tax return.  There’s this thing called an audit which is not something you want to go through.   Make sure your return is correct and if you have questions seek out a professional accountant.  Otherwise, you can find yourself with a whole bunch of income tax problems that need a team of tax attorneys.

Can I keep my lottery tickets at least?  I can?  Oh, but odds are I’m just giving money to the state?  Even though someone wins the odds are very much against winning.  Better off saving the money.

Do people sometimes get rich quick?

Yeah, it happens.  But it’s far more rare than you might think.  Rather than spend your time on some get rich quick scheme, put your energy into a legitimate way to earn money.  Work hard at what you do.  Find ways to make money on the side.  Save.  Invest.  Create something of value to people.  Save more than you spend.  Be honest in your work and to yourself.

You may not find instant riches, but wealth is something we can all attain.

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