Stimulating Conversation
July 10th, 2008Unless you live under a rock (or outside the US) you’ve probably heard about the “Economic Stimulus Act of 2008″. If you made at least a little money (but not too much) last year and paid some taxes, you’re entitled to between 300 and 1,200 dollars, depending on how many children you have and such. Apparently the last checks go out tomorrow, unless the early start on stimulus checks has affected those dates. You can figure out how much you’re supposed to get here.
If you’re up on your taxes, student loans, and child support, that is. If not, the IRS will take those amounts out of your check first. That might cause you not to get a check at all. If you or someone you live with doesn’t have a social security number, you won’t be getting a check either, which apparently leaves out some resident aliens and military families.
I guess it’s OK if you’re dead, though. As long as you met the requirements in 2007, you’re getting a check. Well, your next of kin is, anyway. (But you’re probably not reading this post either, unless you’re a comic book character or something.) And if you’re a dead resident alien who made over $100,000 in ‘07, I don’t know what to tell you. I’m just confused. But then again, you probably have bigger problems at this point.
Whatever you do, if you don’t get your check right away, don’t fall for one of the stimulus check scams that have been floating around. And pray the last two digits in your Social Security Number are low (which are the basis for when you’ll get your check).
Me, I’m more concerned about what people are spending their checks on. I can tell you I did my part. I purchased the Xbox 360 game “Rock Band”, a surround sound headphone adapter (I actually got the Japanese version), and a bunch of wacky “Rock Band” accessories like a mic stand, wireless guitar, drum throne, drum pads, and a replacement bass drum pedal. (OK, I love “Rock Band”. So sue me.)
I guess I wasn’t the only one. Apparently quite a few people bought video games with their stimulus checks.
So there’s that. What else did people buy? Well, the same stuff they always buy, it seems, but more of it. I didn’t see any one big summary on the topic, but I found plenty of sites where people talk about what they did. Here’s a short list of what else I found: paying down debt (very common), donating to Obama (and presumably other politicians), buying retail products in general, and of course, pornography. (Different kind of stimulus happening there, I think.)
That’s not including the more unusual expenditures. You can find some of them on the obviously-named site “How I Spent My Stimulus.com”. My favorite was the guy that used his check to pay part of his $7,500 bail. Apparently it was one of the favorites of the guy who runs the site too, as you can read about here. If you read that link, you can also see what I think the real purpose of the site is: the author is writing a book about the user entries. More power to him, I say. Making money off how other people spent theirs has an excellent hint of irony to it. And hopefully his book will give us a better idea of all the different things people used their rebate for.
In the end, I don’t really know what people have spent or will spend their stimulus checks on. The gist of what I read is that people spent their checks on a great variety of things. But they most often seemed to spend checks on stuff they already wanted, and on common expenses like bills, debt, consumer goods (especially electronics), food, gas, medicine, health care, and the like. However, it did seem like the checks were spent most often on luxuries and one-offs like TVs and nice parties. That’s just a guess, though. Last time we had a stimulus package, people certainly used a big chunk of it to pay down debt, but that was in better times (2001) so people might think differently now.
I suppose some people also saved their checks. I read on various sites that people were socking away some or all of the rebate, but somehow I doubt it. And some people even think we’ll save 90% of our checks. It’s not what we did last time, however, and I’m not buying it. (Though to be fair, they may be including paying down debt as saving.) Americans are some of the worst savers in the world, and we’ve had a zero or even negative personal saving rate for quite some time. Though how the government frames the stimulus matters, in a case like this the stimulus seems more like an unexpected bonus, and thus will probably be spent (as mentioned in the previous link). It seems like the best Americans can do is just pay down debt we already have, and even that is questionable. The American consumer seems down, but maybe not out yet.
What if you don’t know what to do with your check? Presumably, some people have saved their check by default and don’t know what to spend it on yet. Well, everyone from Wal-Mart to Dell wants your money, and some of them will go to extreme lengths to get it, from cashing your check for free to crazy sales.
Of course, you might just think a stimulus check is a bad idea and decide to save it in the end. If people can hate free money delivered to their doorstep, I guess they can hate anything. There’s no doubt the money you get will make you better off, unless you decide to burn it for heat. Then there’s not much anyone can do for you, I’m afraid.
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July 11th, 2008 at 12:32 am
I got mine a month ago, and I’m surprised to see you discussing spending what I got just a short time ago - and even more surprised after reading that some folks haven’t even gotten theirs yet. Was I really expected to spend it already?
Lots of people are talking about the effects of the stimulus checks, including the Fed and The Economist. Some people even think the benefits have already passed, for the most part. That’s what I’ve read, anyway. There’s no rush to spend, of course.
- Dave
July 11th, 2008 at 7:46 am
I still have not gotten mine yet. Apparently if you screw up your 1040 form when you submit it they withold your stimulus check.
I plan on saving it though. I guess it is a combination of having most things that I want, and the extra money does not put me in a different financial situation. I think a lot of people view it is as “free money” where that they can spend because it is extra on top of what they make, but I just view it the same as working overtime. Not free, but more than what I am used to getting.
Didn’t know that. Kind of sucks, I guess. You’re one of the only savers out there, so I commend you. Bob, you’re a saving island in a sea of spending. (Though the consumer currents have been a little slack lately, I guess.)
- Dave
July 11th, 2008 at 10:52 am
Well, Kristina got the money for us in her account. I think we used both that and our tax rebate to pay the extra rent for the past several months while we did not have a roommate as well as paying off debt we were carrying for dining, entertainment, and larger household purchases that we had made during the previous year. It would be a safe guess to say that some of it went towards knitting, too.
I’m slightly surprised that more people wouldn’t have put the extra money towards paying down debt. People always cry for help when debt becomes too strong in normal times, and here’s a ready-made helping hand for a month or two worth of relief (or, a way to help get closer to the Economic Black). It’s like an investment in your personal well-being.
Nothing out of the ordinary here with your spending, so that’s cool. It is a bit weird about the debt, but then again if you got into debt in the first place, is it going to be a priority to pay it off? Probably not, unless you’re in a bad situation or the interest is really killing you/compounding.
- Dave
July 11th, 2008 at 11:30 am
An Xbox 360 and Grand Theft Auto 4. That’s what I’m talking about.
For sure man! (high five)
- Dave
July 11th, 2008 at 7:31 pm
I plan on saving my check. I guess it just doesn’t seem like there is any reason to spend it. If I wanted to buy something, I would have already bought it. A lot of people seem to think I should buy a couch, though.
Also, depending on how you look at it, I could have already spent it on my mortgage payments and bills and saved more of my normal income. So, it’s a bit of a psychological question, too.
And yes, there are those that spend beyond their means. Good to see you’re being sensible about things.
Bob seems to have followed the same approach. Like I said, though, I think you’re in the minority. And I hear you about the buying thing. I just buy stuff I want. Makes Christmas presents for me a bit tough.
- Dave