What are you going to do with your Covid check?

[UncleMark]

In our counties business and the economy is booming. Restaurants need help. Very few people in our area need these stimulus checks.

On the other hand, parts of the economy suck. It is said in Indiana 20% of restaurants have closed, and half of hotels are on the verge of closing.

Bars, restaurants, theaters, hotels, conventions, sports, anything where people gather... those won't come back until Covid has been dealt with. Doesn't matter how much "loose money" is pumped out or what the Texas governor declares. There have been some fits and starts, but I can't really think of anything more that could have been done in a practical sense that would have improved the development of the vaccine and its distribution. Truth be told, pumping out the money now might actually be too soon -- do it June or July when Covid has been brought under control and get people traveling and eating out and going to concerts and ball games.

 

[bigmac76]

Me, I need to upgrade my vehicle. The good ol' 91 S10 starts and runs every day, but something new breaks every time I turn around. The tailgate is held up with a tie-down strap and I have to smack the radio to get it to work. Last fall, just as the weather turned cool, the A/C compressor started hammering. I've been saving up and have enough to buy a newer beater, and the additional $2800 will give me enough to buy something halfway decent.

Replace the 30 year old privacy fence around my back yard....if... if this gets passed.
Republican Senators are suddenly deficit hawks after the deficit increased from 2017-2020 by about 4 trillion

 

[anon_mlxxvlbug9dpa]

Money is fungible.... so a debit card isn't going to do anything. You'd just spend whatever you would normally spend on the card, and then keep your cash you'd normally have spent.

That said there is a proven wealth effect with spending..... that people's consumption, as a whole, marginally increases as their net worth goes up. Since the most immediate impact of discretionary spending is within the leisure industries.... more stimulus across the board is certain to lift those areas that have been hit hardest. Saving $12b to cut checks off to 12m people that got them last time is incredibly stupid, both economically and politically.

I can confirm that my free cash flow has stayed neutral as my income and wealth has increased. You just end up spending more.

 

[twenty02]

I can confirm that my free cash flow has stayed neutral as my income and wealth has increased. You just end up spending more.

Quite amazing how that works without ever really explicitly deciding to do so

 

[mcmurtry66]

Replace the 30 year old privacy fence around my back yard....if... if this gets passed.
Republican Senators are suddenly deficit hawks after the deficit increased from 2017-2020 by about 4 trillion

That's the 4 trillion dollar question. Does that matter? Is Goat right? And maybe he is; but I still hold that all it takes is for elected officials to claim otherwise and bam we're going to be taxed like mad to pay for all of this "stimulus."

 

[anon_mlxxvlbug9dpa]

Quite amazing how that works without ever really explicitly deciding to do so

Yes. And the word “wealth” still makes me bristle and feel icky as someone who grew up in modesty. I don’t consider what I have to be wealth. More like I’m building a sizable / respectable retirement account-driven nest egg but since I can’t get to it I don’t consider it wealth.

 

[cosmickid]

Democrats can truly fk up a wet dream. They win the Presidency, Senate and House majority based upon upper- middle class suburban areas..... and then rush to give those voters less money than Donald Trump did. Brilliant strategy. Suggest you start practicing saying Speaker McCarthy and President Desantis.

Why are you blaming the Dems for this? Not a single House Pub even voted for the bill, and one of the richest goobers in Congress (Ron Johnson) is intent on telling the rest of us that we don't need any help. I only hope there are enough sensible people in Wisconsin to send this clown packing in '22. He truly seems to be a despicable, self-centered prick...

Over 75% of the public approve of the package, but still, the GOP and some Mancin-like Dems insist that people they can't begin to relate to don't need help. I don't agree with the action Biden took (on principle), but with zero GOP support, the Dems have to compromise in order to get this thru even using reconciliation. Now Johnson is using any ridiculous tactic he can to try and delay passage and you want to blame the Dems?

"The weird way in which Sen. Ron Johnson (R-Wis.) argued Wednesday against Democrats’ $1.9 trillion COVID-19 relief bill has gone viral.

Part of Johnson’s argument centered on the literal thickness of the money.

The Wisconsin Republican, who had no such qualms about federal spending when ex-President Donald Trump was in office, used this visual on the Senate floor to make his point:"

Ron Johnson Argues Against COVID-19 Relief Bill In The Weirdest Way, Becomes A Meme

A "Photoshop Battle" broke out over the Wisconsin Republican's out-of-this-world explainer graphic.

www.yahoo.com

 

[UncleMark]

I can confirm that my free cash flow has stayed neutral as my income and wealth has increased. You just end up spending more.

Quite amazing how that works without ever really explicitly deciding to do so

We were much less frugal back before the Great Recession. Then the wife lost her job (and income and health insurance), I got my wages cut by 20%, and was required to pick up our health insurance out of pocket. Take home income dropped by close to 50%. Belt got tightened by an unbelievable amount. The only thing that saved us was not having any debt, having some savings we could tap, and me being able to bring home some money fixing computers on the side.

Things got better eventually (thanks Obama!) but our income never fully recovered. In the meantime, we've essentially maintained our more frugal lifestyle.

 

[Cortez88]

Yes. And the word “wealth” still makes me bristle and feel icky as someone who grew up in modesty. I don’t consider what I have to be wealth. More like I’m building a sizable / respectable retirement account-driven nest egg but since I can’t get to it I don’t consider it wealth.

Setting the tax advantages aside, it really is amazing how illiquid upper middle class folks typically are. Like you,I’ve built a nice 401k and have paid down all debt outside of my mortgage, and I’m hamming that down too. But now I have a whole bunch of money that I really don’t have free access to. There just isn’t a lot of free cash out there for me to, for example, just go buy a car outright.

 

[Courtsensetwo]

I have no issue targeting the money where it is most needed altjough the cash helps juice the economy regardless of who gets it, as usual @Vid has no idea what he is whining about.

Here is where they lose me: If I don't get $1,400 becuse I don't need it. then the next guy in line who does need it should get more than $1,400.

If we are going to cut me out...either cut the $1.9T to $1.0T or give mine to the next guy.

Oh...and cut the ****ing pork out of this bill. Adding pork to a catastrophic relief bill is like looting a liquor store after a hurricaine.

 

[twenty02]

Setting the tax advantages aside, it really is amazing how illiquid upper middle class folks typically are. Like you,I’ve built a nice 401k and have paid down all debt outside of my mortgage, and I’m hamming that down too. But now I have a whole bunch of money that I really don’t have free access to. There just isn’t a lot of free cash out there for me to, for example, just go buy a car outright.

That's a pretty common situation. Ideally you want to use as much tax advantaged space as possible.... but the result of that is a two income couple can end up stashing upwards of $60k-70k/yr+ into all the avaliable vehicles (401k, Roth IRAs, HSAs, 529s, etc).

But then it's more or less locked off... you can get to all of it other than 401k easy enough, but still defeats the purpose of them at that point.

Has to be a balance between overstuffing these accounts and still saving/investing outside of them.

 

[anon_mlxxvlbug9dpa]

That's a pretty common situation. Ideally you want to use as much tax advantaged space as possible.... but the result of that is a two income couple can end up stashing upwards of $60k-70k/yr+ into all the avaliable vehicles (401k, Roth IRAs, HSAs, 529s, etc).

But then it's more or less locked off... you can get to all of it other than 401k easy enough, but still defeats the purpose of them at that point.

Has to be a balance between overstuffing these accounts and still saving/investing outside of them.

I don’t know your plan, but I’m heavily saving in after tax vehicles (Roth 401k and back door Roth IRA). I have no faith in the old guidance that my tax bracket/rate will be lower when I access that money. Fiscal Spending is outta control and they’re gonna have to pay for it somehow.

 

[larsIU]

looting a liquor store after a hurricaine.

So assuming a hurricane the looting order I would follow would be:

Grocery store
Hardway/Home Improvement
Liquor
Best Buy?

Depending on the state I might be able to get the liquor at the grocery store, to be fair.

 

[Courtsensetwo]

So assuming a hurricane the looting order I would follow would be:

Grocery store
Hardway/Home Improvement
Liquor
Best Buy?

Depending on the state I might be able to get the liquor at the grocery store, to be fair.

I specifically chose liquor store because it fulfills unessary pleasures.

 

[ce36ei]

This will be my third and I have absolutely no need for it at all. (I’ve also got 4 kids) In all I’ve put siding on the house, put up a new privacy fence, Paid off my primary vehicle, and saving the rest for a massive Disney blowout when they lift restrictions. 🤷🏼‍♂️

 

[twenty02]

I don’t know your plan, but I’m heavily saving in after tax vehicles (Roth 401k and back door Roth IRA). I have no faith in the old guidance that my tax bracket/rate will be lower when I access that money. Fiscal Spending is outta control and they’re gonna have to pay for it somehow.

I'm roughly 60% pre-tax...and the rest post tax/taxable (due to real estate holdings). I also have no plans to be poorer in retirement than during working years....so never bought fully into that idea, either. Years ago I was in a meeting with an adviser and he commented if you're making less money in retirement than you are when working, then I've failed. I've long done it all myself, but that thought always stuck with me.

However, there are great ways to massage taxable income coming out of 401k....combined with other money elsewhere (Roths, taxable,
etc) to keep you in lower tax brackets while still being able to spend at a much higher rate.

TL/DR..... I've found its best to split the difference between the two best you can.

 

[Hoopsdoc1978]

Me, I need to upgrade my vehicle. The good ol' 91 S10 starts and runs every day, but something new breaks every time I turn around. The tailgate is held up with a tie-down strap and I have to smack the radio to get it to work. Last fall, just as the weather turned cool, the A/C compressor started hammering. I've been saving up and have enough to buy a newer beater, and the additional $2800 will give me enough to buy something halfway decent.

My trusty old 88 1500 long bed is like that. Dented to heck, heater doesn’t work very well, passenger door only opens from the inside, etc.

I just changed the plugs and wires in it Monday and it had been so long the plugs were rusted in. Lol.

That truck can do anything but drive in snow. Completely worthless on any type of slick surface. My Fiat 500 is better in weather.

 

[UncleMark]

That truck can do anything but drive in snow. Completely worthless on any type of slick surface. My Fiat 500 is better in weather.

The S10 was like that until I put 200 pounds of sandbags in it. Totally different truck after that.

 

[anon_mlxxvlbug9dpa]

I'm roughly 60% pre-tax...and the rest post tax/taxable (due to real estate holdings). I also have no plans to be poorer in retirement than during working years....so never bought fully into that idea, either. Years ago I was in a meeting with an adviser and he commented if you're making less money in retirement than you are when working, then I've failed. I've long done it all myself, but that thought always stuck with me.

However, there are great ways to massage taxable income coming out of 401k....combined with other money elsewhere (Roths, taxable,
etc) to keep you in lower tax brackets while still being able to spend at a much higher rate.

TL/DR..... I've found its best to split the difference between the two best you can.

My employer helps me split the difference automatically. No matter what I put into the Roth, their 4% contribution has to go to normal 401k so I get diversification regardless.

 

[Aloha Hoosier]

Disagree. It means more to the local economy if we would get one and pay it forward. Only those that saved or invested it would be doing wrong.

I just spent that much on a set of irons without getting the check. I don't need the check and if I got one I wouldn't have bought clubs that cost twice as much. For the anti-golfers here, $1300 on a set of irons is not extravagant since I've not bought new clubs since probably 2006 and it's time for some technology to make up for getting older and in my chase for getting back into single digits this year. I might have spent the $1400 on something too just to put it back in the economy as well, but it's not what we'd spend. Most people that make as much as we do would probably just throw that check in with the rest of their savings/investments and move on. I think they should have targeted this to people that are hurting because it's supposed to be relief. Then they could have taken a big chunk of it and invested in infrastructure instead. That would be solid stimulus.

 

[UncleMark]

Here is where they lose me: If I don't get $1,400 becuse I don't need it. then the next guy in line who does need it should get more than $1,400.

If we are going to cut me out...either cut the $1.9T to $1.0T or give mine to the next guy.

I'll take yours.

What's interesting is the whole idea of who needs the money. If you knew how we live and saw our income and saw what I drive and knew the choices we've made, you'd probably think we need the money. Truth is, we don't, in that the $2800 won't make an appreciable difference in our lives.

Even my talk of upgrading my vehicle is just that at the moment, talk. The only reason I'm even considering it is the broke A/C in the old truck. I don't deal with temperature extremes well and not having A/C would be a deal breaker. I could get it fixed, but the idea of putting $500 or more into the old beater is hard to swallow. I could probably sell it for $1000 or more as is. Working A/C wouldn't make it worth that much more with all the other problems it has.

 

[Sobchak_Security]

That's a really good point, in theory, but I wonder how many people in your situation are not already doing that, but would suddenly start doing that if they got the check? I'm skeptical it's a meaningful number.

My family and I (2 kids still at home) live comfortably, but we are going to use this check for some home improvements we otherwise would not have done.

 

[Spartans9312]

I'll take yours.

What's interesting is the whole idea of who needs the money. If you knew how we live and saw our income and saw what I drive and knew the choices we've made, you'd probably think we need the money. Truth is, we don't, in that the $2800 won't make an appreciable difference in our lives.

Even my talk of upgrading my vehicle is just that at the moment, talk. The only reason I'm even considering it is the broke A/C in the old truck. I don't deal with temperature extremes well and not having A/C would be a deal breaker. I could get it fixed, but the idea of putting $500 or more into the old beater is hard to swallow. I could probably sell it for $1000 or more as is. Working A/C wouldn't make it worth that much more with all the other problems it has.

It sounds like we live similarly. Other than I'm not drinking folgers instant.

 

[Spartans9312]

I just spent that much on a set of irons without getting the check. I don't need the check and if I got one I wouldn't have bought clubs that cost twice as much. For the anti-golfers here, $1300 on a set of irons is not extravagant since I've not bought new clubs since probably 2006 and it's time for some technology to make up for getting older and in my chase for getting back into single digits this year. I might have spent the $1400 on something too just to put it back in the economy as well, but it's not what we'd spend. Most people that make as much as we do would probably just throw that check in with the rest of their savings/investments and move on. I think they should have targeted this to people that are hurting because it's supposed to be relief. Then they could have taken a big chunk of it and invested in infrastructure instead. That would be solid stimulus.

What kind of irons did you purchase

 

[Aloha Hoosier]

What kind of irons did you purchase

Titleist T300s.

Edited: I initially planned to get the T200s, but switched to the 300s. Got a couple of Cleveland wedges too. I'm ready to play.

 

[UncleMark]

It sounds like we live similarly. Other than I'm not drinking folgers instant.

Folgers instant is one of the few luxuries I allow myself. I used to buy the house brand.

 

[Spartans9312]

Folgers instant is one of the few luxuries I allow myself. I used to buy the house brand.

Use some of that stimulus money and step up to Maxwell House wake-up roast.

 

[DrHoops]

Brookstone for a foot massager!

 

[iuwclurker]

Good luck.... the economy is so "bad" that I had to talk with about ten different roofers to get a small repair job done last month (under $1k). Some didn't even show up..... others never provided estimates after promising them.... and a few blew me off with estimates for $4-6k for a job that took about 3 hours.

Roofers hate small jobs.

 

[iuwclurker]

I guess, but that doesn't mean anything either. That doesn't mean someone has spent more money. Maybe they just banked a paycheck instead.

It's a pointless discussion, really. There is no line that can be drawn that will accurately separate who needs a payment and who does not. Some checks will go to people who clearly do not need it and won't use it, while some who might benefit will certainly miss out. We can all find stories that will show either.

When I worked at beneficial finance it was pretty easy to get someone to come in to refinance their loan with the incentive of an extra 500 bucks cash.

 

[UncleMark]

When I worked at beneficial finance it was pretty easy to get someone to come in to refinance their loan with the incentive of an extra 500 bucks cash.

There's a reason they call those outfits "blood banks".

 

[iuwclurker]

There's a reason they call those outfits "blood banks".

It was sickening. I lasted about four months and couldn’t stand it anymore. It was an insidious trap. Something like 2/3 into the payoff they had paid most of their interest, that’s when we called them and offered them a new loan. They got deeper and deeper and deeper. Made me sick. I wanted to write a brochure for all highschoolers teaching them All about it.

 

[Hoopsdoc1978]

Titleist T300s.

Edited: I initially planned to get the T200s, but switched to the 300s. Got a couple of Cleveland wedges too. I'm ready to play.

Maybe I need to give those a look. I’ve had my Mizunos for awhile now. That’s a little steep for me though.

 

[TommyCracker]

Money is fungible.... so a debit card isn't going to do anything. You'd just spend whatever you would normally spend on the card, and then keep your cash you'd normally have spent.

That said there is a proven wealth effect with spending..... that people's consumption, as a whole, marginally increases as their net worth goes up. Since the most immediate impact of discretionary spending is within the leisure industries.... more stimulus across the board is certain to lift those areas that have been hit hardest. Saving $12b to cut checks off to 12m people that got them last time is incredibly stupid, both economically and politically.

I disagree because it changes your incentive to stockpile cash.

For those that have money, yeah you could save more of your own but it will still incentivize you to make sure you spend your debit cash first so you could get your full allotment when it looks at your balance, whatever interval that is, say monthly.

The government could also easy control where that money is spent on the back end. Maybe have local businesses sign up to be a part of the 'market'.

Maybe that doesn't include Amazon? Maybe not for gas?

The govt would have a lever to pull to really help small businesses with the card since they can exclude whatever they want.

For those that really need the cash, it's an easy, not as stigmatizing program.

It kind of takes Yang's UBI (or in his words, trickle up economy) and gives it a tool that would presumably much more efficient than mailing out checks for the same amount for everyone to do what they want.

 

[Hank Reardon]

It was sickening. I lasted about four months and couldn’t stand it anymore. It was an insidious trap. Something like 2/3 into the payoff they had paid most of their interest, that’s when we called them and offered them a new loan. They got deeper and deeper and deeper. Made me sick. I wanted to write a brochure for all highschoolers teaching them All about it.

Oh man, 30 years ago long before I was in IT, I worked at a finance place called CIT Financial. Same sort of place. One thing I had to do was go down to the courthouse and pull up records on 2nd mortgages, find high interest loans, call ‘em up and convince them to refinance. The interest rates were outrageous (this was the early 80’s) and these loans were all front loaded interest. These people had barely paid any principal, if any. I worked there six months.

 

[stollcpa]

I can confirm that my free cash flow has stayed neutral as my income and wealth has increased. You just end up spending more.

Happens to everyone. Experienced it myself and watching many clients over the years.

 

[Aloha Hoosier]

Maybe I need to give those a look. I’ve had my Mizunos for awhile now. That’s a little steep for me though.

I got the 4 thru P for less than $900 before tax. Needed a couple of new wedges too. I love Cleveland wedges.

 

[76-1]

I have no issue targeting the money where it is most needed altjough the cash helps juice the economy regardless of who gets it, as usual @Vid has no idea what he is whining about.

Here is where they lose me: If I don't get $1,400 becuse I don't need it. then the next guy in line who does need it should get more than $1,400.

If we are going to cut me out...either cut the $1.9T to $1.0T or give mine to the next guy.

Oh...and cut the ****ing pork out of this bill. Adding pork to a catastrophic relief bill is like looting a liquor store after a hurricaine.

I'm with whichever Republican Congressman said last week to just cut out all the pork and give every American citizen $10,000...

If we're going to blow our grandchildrens money at least give the families a choice as to how to blow it that might Best effect their personal circumstances...

I'm old enough to remember when 1 Trillion Dollars was considered Real Money... When was that..., 2 years ago...? Seems like light years...😞

 

[Cortez88]

Folgers instant is one of the few luxuries I allow myself. I used to buy the house brand.

We are an Aldi family and I will say that their coffee is very good. It’s half the price and they have a number of varieties to choose from.

 

[NPT]

I'm roughly 60% pre-tax...and the rest post tax/taxable (due to real estate holdings). I also have no plans to be poorer in retirement than during working years....so never bought fully into that idea, either. Years ago I was in a meeting with an adviser and he commented if you're making less money in retirement than you are when working, then I've failed. I've long done it all myself, but that thought always stuck with me.

However, there are great ways to massage taxable income coming out of 401k....combined with other money elsewhere (Roths, taxable,
etc) to keep you in lower tax brackets while still being able to spend at a much higher rate.

TL/DR..... I've found its best to split the difference between the two best you can.

Speaking from experience I would advise anyone making good money to put their money into a Roth IF they are in the 22% tax bracket or below (and I have my doubts about a Roth because I don't trust that the government won't find some way to tax that). A Roth was not offered in my main working years so I didn't have that choice. One thing you have to remember is that the government is constantly doing things that screw with your plans. Case in point... When I put my money into an IRA (and my wife did the same) when we died and it went to our daughter she had to start taking out the money right away but it was over her lifetime so that wasn't a big deal since not much would have to be taken out but they come along last year and change it to it all has to be out within 10 years ..... there went our plan. I am in the process of converting some IRA into a Roth but between that and my RMD it takes me into a higher tax bracket and that means I have to pay more for my Medicare (around $400/month rather than the normal $150 ...that is a guess). There are so many rules that it's hard to keep up with all of them and I try. My biggest mistake was not to start converting my traditional IRAs into Roths a long time ago but it wasn't a concern because of the rules back then. INRanger is correct in stating that your tax bracket may not drop when you retire .... ours didn't.

On a side note .... We didn't get any of the stimulus checks and didn't deserve one because the pandemic has not affected our income and we already had plans on who we were gonna give the checks to IF we got one because we didn't need it. However, to me it points out a big flaw in the plan and that is that a family whose is less than the age where they have to take out the RMD could have several several million sitting out there in their IRAs and 401s and still get the stimulus checks. Why should someone with that kind of money get a check that future taxpayers are gonna have to pay with taxes.