Pimp Your Finances

When I started writing this, it was meant to be a summary of how the $790 billion stimulus package could affect people.  But halfway through, I changed my mind.

I’m sure that other people will summarize it, but more importantly, I think that the best economic plan is to just take responsibility for your finances and stimulate yourself.  No one cares about your money as much as you, so why depend on the government to look out for your wallet?

The stimulus package really doesn’t affect me.  In June, I can expect to see another $13 in my weekly paycheck (a total of $400 for the rest of the year, and I plan on saving it all).  But other than that, its impact is minimal.

I don’t get a first-time home owner credit because I bought my house in January 2008.  To qualify, it had to be between April 2008 and December 2009.

I bought a house I can afford (only using two-thirds of the loan that I was approved for), so I won’t be getting any help with my mortgage.

I don’t get any tax credits for having an energy-efficient house, because I planned ahead and bought it that way.  If I was upgrading to an eco-friendly furnace or windows, I could get a credit for up to 30% of the cost.

At first, I was upset that I don’t get anything from the plan.  But then I realized that I don’t need the help, because I’ve been doing what I should be.

Another revelation I had is that depending on the government is just foolish.  Even if I did need help, the stimulus plan wouldn’t solve my problems.

To protect my finances, I need to stimulate myself.  Here’s how I’m going to do it.

1. Do the best that I can at my job every day.  I’m going to go above and beyond what is expected of me, and make sure that my contributions are noticed.

2. Start building a cash reserve.  I have a small emergency fund now, but it’s not enough.  This is a priority for me.  I’d like to save at least enough to cover a few months of expenses, just in case anything happens to my job.

3. Really start chipping away at my debt.  In good times, credit card bills don’t seem like a big deal.  But if something happens to my income, the debt would quickly turn from annoying to crippling.

4. Invest more.  It’s not enough to focus on the short term.  I need to think of the big picture too.  A down economy is an opportunity for long term investors, and I’d be a fool to not take advantage of it.  I need to save more money for my retirement (and put most of it into stocks).

5. Invest in myself.  I’m going to constantly increase my knowledge and skills, on both a personal and professional level.  There’s always room to learn more and better myself.

These steps may sound simple, and I know they won’t completely fireproof my finances, but it will do a heck of a lot more for me than anything the government could do.

What are you doing to stimulate yourself?