Transcripts

"Money File"-Don't Spend the Stimulus Check

SUSIE GHARIB: Back now to one of our top stories, the stimulus bill signed by President Bush today. Our money file commentator says now is not the time for a spending spree. She's Harriet Johnson Brackey, personal finance columnist at the "South Florida Sun Sentinel."

HARRIET JOHNSON BRACKEY, PERSONAL FINANCE REPORTER, SO. FLORIDA SUN SENTINEL: I don't believe that survey that says only 5 percent of consumers plan to splurge if they get tax rebate checks and the rest will be models of financial restraint? No. So, with apologies to Congress and the White House, I'm going to refuse to accept the job of jump-starting the economy. I say spending the tax rebate check on new stuff is not very wise. I know the distress consumers are going through, because salaries aren't going up enough, debts are growing and the costs of basic needs, such as food and gas, are through the roof.

So here's what I'd suggest you do with the approximately $3,000 a family of four may get from the tax rebate and an average tax refund. Number one, pay down credit card debt. Number two, put something extra toward your mortgage or stick the money in a college savings plan. Increase your retirement contributions. Give it to your teenager and show him or her how to pick out a stock. Begin a rainy day emergency fund. Give it to a food bank and take a tax deduction. Or take a flier on a mutual fund you've been interested in.

Eventually, I think the economy will get back on course, even as we all take care of the personal finance basics. So skip the flat screen TV and use the money to improve your own financial picture. I'm Harriet Johnson Brackey.