WCAX.COM Local Vermont News, Weather and Sports-Financial Experts: Don't Blow Economic Stimulus Checks

Financial Experts: Don't Blow Economic Stimulus Checks

Williston, Vermont - May 26, 2008

The showroom at the SuperStore is a shopper's dream; from flat-screen televisions to furniture, even household appliances. And these are the types of things the federal government is hoping Americans are out purchasing with their economic stimulus checks. Officials are hoping this kind of spending will help jump-start the economy. So far so good here in Williston.

"We've kind of wondered what the effect would be and we've kind of hoped everyone would come in and spend their money. But when they come in with their checks and say would you cash this and take this for the purchase, well, we know it's working," says Doug Whitaker of the SuperStore.

It may be working, but financial analysts say it may not be wise.

"That's good for politicians, it's good for the government, but it's not necessarily good for each individual," says Paul Mendelsohn of Windham Financial.

And that's because things are expected to get worse. With rising inflation and a still slowing economy, Mendelsohn says food prices will continue to rise and he expects a gallon of gasoline could cost $5.00 by the end of the summer. He also says the cost to fill an oil tank to heat your home could double by next winter. So he says prepare now.

"Since heating oil prices are probably still relatively low now, especially coming into early summer when there's no demand, I would say if your tanks aren't full I would take some of that money and I would top off my tank," advises Mendelsohn.

And how about paying down your credit card? The benefits are twofold.

"Number one, it saves you a lot of interest money that you would be spending between now and the end of the year and second, if you do need to draw on that money later you can still debit your credit card to pay for heating oil or other items," explains Mendelsohn.

You could make an extra mortgage payment and reduce the life of your loan, or even put your stimulus check into a retirement or college fund. Mendelsohn says these options may not be as much fun as big, flat-screen TVs, but they are the fiscally responsible choice. His message: be careful because things will get worse before they get better.

Bridget Barry Caswell - WCAX News