Use Your Check Wisely

The economic stimulus plan has been passed into law, and for most Americans, that means a check will be in the mail sometime in May.

Just about every American will qualify for a rebate except for those with very high incomes and those who pay no taxes or have less than $3,000 in qualifying income.

For a complete breakdown of the program, go to www.irs.gov, where you will find examples and all the rules that apply.

The question I would like to address here is, “What is the best use of that check?” Many of the pundits have criticized the rebate program as a way to stimulate the sales of flat screen TVs and iPods. I would hope that when Americans get their checks they will use them more productively.

By productively, I mean to reduce their debt or increase their savings.
If you have debt (and who doesn’t?) why not consider using the rebate to reduce the balance on the most expensive account. Typically this would be credit card debt on which interest charges can range from the single digits to the upper 20s. Reducing this type of debt could save you a lot of money in the long run. If you don’t have any credit card or consumer debt, you might want to consider using the rebate to make an IRA or Roth IRA contribution or to increase the contributions you make to your employer-sponsored retirement plan.

For many, this is a great time to invest in the stock market, and the rebate is a perfect opportunity to bolster retirement savings. Reducing debt or increasing savings would be good ways to prove the pundits wrong and improve your financial condition.

Best wishes in making the right choice.
Bob Stockdale, Stifel, Nicolaus & Company, Incorporated, Member SIPC & NYSE

Bob Stockdale is a Vice President of Investments and Branch Manager of the Stifel, Nicolaus & Company, Incorporated office in St. Peters, Missouri. His services include helping clients, both individuals and business entities, determine financial goals and objectives and develop comprehensive investment plans to help achieve them. He specializes in working with pre-retirees and retirees to secure a comfortable retirement.

Bob is currently host of On The Money, a weekly radio financial talk show on 97.1 FM TALK and has made guest appearances on other local radio programs as a financial professional. He has taught financial classes for adults at St. Louis Community College and hosted numerous seminars in the St. Louis area focused on retirement planning and investing.

Bob’s training includes a B.A. degree from Webster University and an M.B.A. in business from SIUE. He is a Certified Financial Planner professional and a Registered Representative with the NASD.

Bob, his wife, Beth, and their three children live in St. Charles, Missouri.

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