Mo0se

I dont know why you guys are all excited about getting a tax return. Its not a good thing, financially. Its so much better to break even for the year, or even owe a very small amount. You just gave the Govt. an interest free loan whereas if you claimed less and took more of your money out of your paycheck for the year you could have deposited the difference into a money market and earned at least 3%. So for the year, lets say you overpayed your taxes by 1200$ (the amt of your return). Thats $100/mo that could have been earning interest. Compounded monthly @ 3% (as my MM is set up) thats 1318.32 for the year, thats a difference of free 120$ for money that you weren't using anyway. Granted it'd be even more if the interest rate was higher such as if you placed the money in a mutual fund (less liquid than MM but higher yield) or if you're return was higher (overpaying by more, increasing monthly principal).

You guys can check my math of course, but it should be right, remember you're adding $100 to the principal each month. Interest = Principal x Rate x time. M1 [100 x.03 x1 = 103]. M2 [(103+100) x.03 x 1 = 6.09] M3 [(203+100+6.09) x.03 x 1 = 9.27] M3..., M11,... etc.

My stimulus check I will probably put towards car insurance, figure I pay insurance every 6 months, lock it up earning some sort of interest for a year. Pay the first 6 months out of pocket, the next term will be paid for plus a little extra spending cash from the interest.

HMTguy

fysh is exactly right.

The thing is, there will ALWAYS be people (the majority I'd say) that want to get that check every year. You can explain to them what fysh just said, and their response will still be "Yea but I just got a check for $1500, it really helps!" Even some people that get it still prefer to get a nice big check.

BTW, when are we supposed to get this stimulus check?