Stimulating the Economy...

You've probably heard by now that a tax rebate is going to be issued this year. It's also referred to as the 'Economic Stimulus Package'. Single filers will receive $600, Joint filers will receive $1200, and an additional $300 is added to that for each child in the household. These numbers assume you make no more than $75,000 (individual) or $150,000 for joint filers. Low-income filers must make at least $3,000 to receive a rebate, which is $300. Those who make over those limits will receive a rebate, but it will be reduced by 5% for every $1,000 over $150,000 and it is capped at $174,000


So, what do you have to do to receive this money?
You must file a 2007 income tax. If you do not file, you will not receive the rebate.
Then you wait. The rebates are expected to show up as early as May, so it may be beneficial to file early this year instead of waiting until the last minute. Then again, it may not make a difference to file early. Just be sure to file your return and you'll be ok.

"I'm getting a rebate, what should I buy to stimulate the economy?"
Whoa there, cowboy. Not so fast. Let's remember that the politicians in Washington are calling this tax rebate an "Economic Stimulus Package" so that you'll feel inclined to spend it. But that's not your job. This money should be used to help you get out of debt.

Here's some tips on what to do with it:

• Get current on any outstanding debts that you've fallen behind on.
• If you haven't already, build up an emergency fund.
• Pay off those credit cards, or throw as much as you can at them.
• Refinance your house and use the rebate for closing costs.
  

It can also be used to invest in 401K, IRAs, or another investment vehicle. Do this only if you are out of debt, in which case I'm not sure why you're reading this blog!

So while Washington may want you to stimulate the economy, you should use it to stimulate your own household instead.

Reduce The Cost of Your Phone Line

Many have rid themselves of the monthly expense of a land-line phone - you know the ones you plug into the wall at home...... If you don't need one, it's a great cost savings to just use your cell phone. Many people still utilize this service, including me. It might be due to your cell not working in your house, or that you want it for emergency - just in case.

I'm provided with a cell phone by the company that employs me, and they pay the bill. Therefore, I like having a land-line - just in case I suddenly become unemployed, or the cell towers go down. Well, I checked my bill and this month all my bonus discounts have expired. What used to be around $15 a month is now $36.75 for the line, plus $4.66 for long distance. That totals up to $41.41 - most of which is Taxes and Fees - but I still have to pay them.

I've decided that's way too much for a phone line that I rarely use so I place a call to AT&T. I explain that I want a POTS line - no frills. (POTS is an acronym for Plain Old Telephone Service) So the line is going to cost between $6 and $9 instead of the original $17.50, plus I dropped the caller ID package that was $7.77. I also killed the long distance plan, saving me another $4.66. So my $40 charge is going to be reduced to around $17. That freed up an additional $20+ a month to pay towards debt!

I had the option to remove the long distance, which would prohibit any long distance call from being made. I decided against this, since I might send a FAX or need it for an emergency. The prices range from 19-35 cents a minute, so a 10 minute call would only be $1.90 or $3.50 - still cheaper than the $4.66 I was paying for a 7 cents a minute plan. You may choose to leave off the long distance if you don't have responsible people in your household, or small children that may dial away on the phone as if it was a toy.

So, call your phone company and downgrade your land-line. That will put an extra $200-$300 a year in your pocket, depending on your situation.