Stimulus Windfall: Where To Stash Your $13

With the $789.5 billion stimulus package passed by congress and headed to the Senate for a final vote, the President could sign everything into law on Monday morning. Included in the package is a $400-per-worker tax credit for 2009 and 2010. What should you do with your piece of the multi-billion-dollar pie? Here's a couple of suggestions.

The tax credit will reduce the amount withheld from your paycheck starting sometime in late spring or early summer. The result is an estimated $13 extra per week for 2009. (The impact in 2010 is estimated at $7.70 per week, since the $400 credit will be stretched over the full year.) While $13 a week doesn't sound like much, that's an extra $52 or so a month that can go towards paying down your debt or boosting your savings, whichever makes the most sense for your situation.

Say you're carrying a $2,000 balance on a credit card that charges 18% interest. If you're currently paying $120 a month, you'll be able to pay that off in 19 months. Add that extra $52 to your monthly payments and you can shave 6 months off the payoff time. Play with the numbers however you want: use BankingMyWay.com's credit card payment calculator to see how extra cash can help pay off your balances faster.

Alternately, you can automatically transfer that extra $26 per two-week pay period into a savings account or money market account before you have a chance to spend it. Once there, let compounding interest boost your overall savings....