Dave Ramsey on Government Stimulus Package

I have been wanting to post about this for awhile, but Dave Ramsey beat me to it. I will let you read what he said since he is much more qualified in the area of finances than I am.

Link to full article

Dave’s Thoughts on the Stimulus Tax Rebate

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!!!”

Well, I’m not here to totally rain on your parade, but plain and simple, I’m not lovin’ this plan. This government plan to try to stimulate the economy and pull us away from a possible recession is actually straight-up socialism – just the opposite of capitalism! I don’t want my money to help you (if you haven’t paid federal income taxes) buy an iPhone or whatever else you have your eye set on.

“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!

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! Those are just formal invitations for Murphy to unpack his suitcases in your spare bedroom! Here are a handful of ways I recommend making your tax rebate work for you, depending on where you are in the Baby Steps:

  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 (or maybe quite a few) closer to being debt free, and THEN you will have the freedom to buy that toy or take that vacation you’ve had your heart set on for quite a while! Learn how
  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.
  3. 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! For the married folks, this free money can grow up to $13,000 over 20 years – WOW! Calculate your earnings

  4. Have some fun. I’m not a total meanie. 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.

Source: CNNMoney.com



3 thoughts on “Dave Ramsey on Government Stimulus Package

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Tim Ramsey

  2. I am a volunteer aarp tax counselor. I see mostly people on the lower end of the earnings scale, and a lot of retirees.
    The retirees seem to be the people of am seeing who are filing just to receive the stimuls package and truthfully most of them have little or no income and can use the money. The ones who can be irritating are those who are used to the federal handout at tax time. The earned income credit, child tax credit, ect. They sometimes go home with a $4,000 handout, in other words, their income is not only tax free it is subsidised! While those who are making too much to earn these perks are paying for others to receive them. Meanwhile, people who are working hard in the face of medical issues have to face the fact that when they reach their insurance limit they will have few options. We are Soooooo screwed up!!! I’ve got it, why don’t we send our manufacturing jobs out of the country and lthen we can legalize people who run to our country to get those jobs!!! What a solution…why didn’t I think of that!

    I enjoy your program immensley although I am having trouble finding it locally. You seem to have left the station you were on and I can’t seem to find where you are in the Akron area. Thanks for being a beacon of sanity in a nation where debt seems to be a way of life.

    God Bless.

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