Economic Stimulus?

Most of you are jumping with joy that you're probably going to be getting a big, fat check from the government.

You may be thinking, "FREE MONEY, BABY!!!"

"Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less," President Bush said. The idea in theory sounds like it will work smoothly, but I have a much better idea that will eventually increase consumer spending, and in turn, cause the economy to flourish: encourage freedom from debt! Reign in the credit card companies and strive for entrepreneurism.

But most of all "Know the rules before you play the game!"

Don't try to re-invent the wheel all the time. Take full advantage of existing laws that allow you to virtually eliminate your tax liabilities.

But I digress...

The last time a stimulus rebate like this was issued was in 2001. A recent study revealed consumers spent two-thirds of those rebates within 6 months of receiving them.

Do you have a game plan already for what you'll do with your rebate this time around?

Make the Money Work For You

Don't wait until it comes in the mail to formulate a plan, and whatever you do, do NOT spend this money before it gets to your hands! Here are a handful of ways I recommend making your tax rebate work for you;

1. Pay off debt.
This may sound like a no-brainer, but I already expect that few people will actually do it! There's really no reason NOT to throw this "free" money toward your debt snowball. It will get you one step closer to being debt free.

2. Invest it.
If you put this big chunk of change into a mutual fund for a few years, you'll actually receive TONS more money than just the initial $600 or $1,200 check this summer.

Say you get back $600 and put it automatically into a mutual fund averaging 12%. In 2018, that one-time investment will grow to approximately $2,000! If left in for 20 years, it will be worth about $6,500!

3. Have some fun.
I'm not a total buzz kill. I actually do like to have some fun with my money, and I encourage you to do the same! There's nothing wrong with taking your spouse out for a nice dinner or buying that new pair of jeans with some of this money you could be getting. Just stick within your boundaries, and remember that the quicker you get out of debt, the more fun things you can do and the more money you can give away to bless others.

Face Facts And Pay The Piper

Most of us wish we could save more money.

So why don't we?

You say you've heard it all, but here you are in the same spot as last year.

This boils down to two things. The first is that most of us don't have a good handle on what our expenses are in relation to our income. The second reason we don't save more is because we're not aware of our money-sucking habits. Here are a few steps you can take to gain control and save more money. They take less time than you think. So why not get started today?

Gaining Control

1. Write Down Why You Want to Save. Write down all the reasons you want to save more money. The obvious things are for retirement, to buy a house, for college education, for travel, and for that special toy you want (car, boat, etc). Other reasons might be to have financial security, peace of mind, the ability to help others, to feel in control, and other non-tangible reasons. By being clear about why you want to save more, you'll be more likely to stick with it. Write these reasons down at the top of your budget and carry this around with you in your wallet.

2. Know Your Income. Know what your exact monthly income is by looking at your net pay. Sometimes we just mentally think of our gross income because it makes us feel better, but we need to look at the actual net number after taxes are deducted.

3. Do an Expense Inventory. Write down all your expenses for the month or type them into an excel spreadsheet. If you have time take a look at a few months to get an accurate average.

4. Calculate Your Monthly Net Income or Loss. Take your net income and subtract your net monthly expenses. That's the amount you are either saving or losing monthly. Congratulations. Now that you know the number, now you can do something about it.

5. Set a Budget. The easiest way is to use this free online budget service, The Beehive. Alternatively, you could use software such as Quicken or Microsoft Money. Or if you like to keep it very simple, use an excel spreadsheet with a column for income sources and a column for expenses (including savings). The goal here is to allocate your monthly income to a monthly maximum for each expense type and a minimum for your savings goal.

6. Free Up Some Money (Cut Your Expenses). After you've tallied your expenses, review each one. Where can you make cuts? For instance do you use all the minutes on your cell phone plan? Could you downgrade? How about your home phone? Could you do without it? Do you watch enough TV to justify all the cable channels you have? Call the cable company to find out how you could downgrade. $20 here, $40 there, another $60, and suddenly you've freed up $100/month that could go towards savings or debt reduction.

7. Pay Off Credit Cards First. If you have credit card debt that charges more than your savings account pays, then the most sensible decision is to pay down your debt first. Switch to the lowest rate you can while you pay it off. After you have paid off your credit cards, only buy what you can pay off at the end of each month. If you have trouble controlling spending, then close your credit card accounts and use cash.

9 Tips To Survive A Recession

1. Eliminate the nonessentials.
One way to avoid putting spending on automatic pilot: Write down everything you buy and the price. Better yet, get receipts fo r everything you buy. Then go through the list and see where your money is going. A stark look at reality can be quite humbling.

In todays unstable economy, you need to make sure you're not spending any money that doesn't absolutely, positively need to be spent.

2. Start a go-to fund for emergencies.
The average family will face up to $2,000 a year in unexpected bills. For families already stretching to pay the bills, those surprises can trigger long-term financial problems. While you can't plan what or when, you can have money set aside just in case.

You need to really boost your cash reserves.

A good goal is six months to one year's living expenses in an assortment of liquid vehicles, like a bank account, money market account and short-term CDs.

• Pay yourself first. It is recommended to save 10 percent of your take-home pay every time you get a check.
• Keep it liquid and make saving automatic.
• Look for a money market account that pays the highest rate you can find.

3. Consider cutting back, rather than cutting out, some expenses.
It's much more effective if people cut back rather than cut out because it's the change in behavior that's so tough."

Examine services you're paying for and not fully using, like the cell phone plan with unlimited texting or the premium cable package. Are there less expensive options that would make you just as happy?

4. Safeguard your current job.
Remain engaged and enthusiastic, keep a high profile and network, network, network.

5. ALWAYS be on the lookout for your next job.
Just like a corporation, you have to ensure your own financial survival, says Yate. If you believe that your company or job is in jeopardy, update that resume, reach out to your network, hit the job boards (anonymously) and ignite your job search.

6. Keep your debt load light.
Use credit only if you are paying off balances in full every month. Otherwise, switch to cash, checks or debit cards. That way when the money's gone, the spending stops.

7. Adjust your withholding allowance.
The average refund is well over $2,000, And most people could use an extra $200 every month.

8. Reward yourself.
Hold out a little discretionary money that you can use for fun.

9. Money From Nothing
You have an unexpected windfall, like a raise, bonus or tax refund

At the end of the day put your pocket change in a big jar. At the end of the month, you'll have $20 or $30, and you'll never miss the money."