The $789.5 billion stimulus package was approved by the house without Republican support. President Obama is expected to sign it into law Monday morning. What does it mean for individuals? The stimulus package includes a $400 per-worker tax credit for 2009 and 2010, which will reduce the amount of taxes withheld from your paycheck by about $13 per week in 2009 and about $7.70 per week in 2010. (The difference in 2010 is due to the $400 being spread out over the full 12 months).
What will you do with your $13 per week this year? Most people are scuffing because $13 a week seems like nothing, but if you look at it on a monthly basis you're looking at about $52 more in your pocket each month for the rest of the year. That's $52 you can use to reduce your high interest debt faster, or $52 a month you can use to boost your savings or money market account.
It would be very easy to absorb the $13 a week into your regular spending, so you'll need to set up an automatic transfer to move that money into your savings account of choice before you have the chance to use it. If you transferred $26 every other week into an account earning 2.8% interest, you'd have $686 at the end of the year. Use the savings calculator to see how different savings rates impact the savings.
Everyone has a different opinion on whether or not the stimulus package will do anything to improve or stimulate the economy, but if you plan to use your piece of the multi-billion dollar pie to your advantage, at least it can stimulate your own financial situation.
