With economic stimulus check now arriving, you may be wondering what you're going to do with all that money. Dale Funderburk is an Economics Professor at Texas A&M University-Commerce. He says from a family's standpoint, you need to look at it in terms of your own family budget. In most cases, families need to look at paying off debt, noting high credit card interest rates and other increasingly expensive services. Funderburk says while saving the money is a good intention, this nation as a whole is statistically very poor at doing so.
Funderburk also points out that in some cases like receiving a large rebate check, the money could do people more harm than good. He says be sure to avoid certain traps, like using the money to take on long term obligations, such as using it on a down payment for a new car. Because that rebate money is issued only once, while car payments need to be made consistently.
In his opinion, this more than $150 billion stimulus package may not in fact help the economy. Funderburk says it may in fact generate higher prices. He says most people will be spending a lot of their rebate checks at the gas pumps or at the grocery store, places where these days' prices are being raised daily. That's a process he says doesn't tend to lead to more economic output.
Those who filed their 2007 tax return via direct deposit should have already received their stimulus checks. All other eligible recipients will receive a paper check by mail, to be sent based on the last two digits of your social security number. Further information can be found at irs.gov.
Click the MP3 icon to listen as Economics Professor at Texas A&M University-Commerce Dale Funderburk advises against falling into the rebate check trap.