Stimulus Tax Credit For Individuals
The stimulus is going to give approximately $400 per year to individuals and $800 for couples. It's going to be given in the form of a tax credit meaning your employer will reduce the amount of taxes held from each paycheck. This may not seem like a lot to most people but looking at the grand scheme of things, there are a number of opportunities this can provide.
The idea behind this is of course, to encourage folks to spend the extra money in order to stimulate the economy. However, I believe the wisest thing you can do is invest it rather than spend it. Since you're already living on a budget designed around your take home pay, you should be able to discipline yourself to put the extra money in a savings or money market account.
Another option which might be better suited for someone trying to eliminate debt is to simply apply the extra income to credit cards, car payment or other consumer debt. If it were me in this category, I would probably target my credit card with the highest rate of interest. Just doubling up on your monthly payment can save you hundreds and sometimes even thousands of dollars in interest depending on your beginning balance.
Whatever you do, don't squander the extra income on things you don't necessarily need. Take time to evaluate your financial situation to determine the wisest choice for circumstance. It's not too often we get “free” money so take advantage of this opportunity. You'll be glad you did.
